Australian food and grocery industry exhibits growth despite pandemic’s economic pressures, says watchdog

Image credit: AFGC

Australia’s food and grocery manufacturing sector has seen a growth in value in 2020 and 2021— to approximately $133.6 billion— despite disruptions caused by the global pandemic, according to a report from the Australian Food and Grocery Council (AFGC). 

However, the report noted that ongoing pressures on workforces, supply chains, and production costs still pose a challenge to securing the sector’s future as a key growth industry. 

The State of Industry (SOI) 2022 report detailed a 0.9 per cent increase in turnover for food and grocery manufacturing despite a 17.1 per cent fall in the value of exports as global supply chain disruptions affected sales to major export markets in Asia and the United States. 

According to the SOI 2022 report, stocking up and panic buying contributed to the spike in domestic spending, with an uptick of 9 per cent to $99.4 billion, which offset a 17.1 per cent decrease in exports. 

Additionally, human pharmaceutical products’ domestic turnover rose by 50 per cent to $2.21 billion as shoppers stocked up. 

Tanya Barden, CEO of AFGC, explained that the figures pre-date the unprecedented impacts of 2022’s heavy flooding in eastern and central Australia, as well as the war in Ukraine. 

“The pressures manufacturers were facing a year ago have intensified to the point where the viability of some businesses could be at risk,” Barden said. 

Now is the time to invest in skills, technologies, and infrastructure to build industry resilience, the AFGC chief executive said in a statement. 

“The federal government has shown it understands the importance of supporting Australia’s competitive strengths, identifying food processing among the priority areas for its National Reconstruction Fund,” she added. “Investment in Australia’s food and grocery manufacturing industry is an investment in the future and our sovereign manufacturing capacity.”