Australian food makers have been urged to tailor foods and packaging for “Asian tastes” rather than rely on exporting unprocessed foods or products designed for Australians.
While Australia's China-fuelled mining boom has long prompted claims it is Asia's quarry, there are new warnings the country needs to become a Singapore-style food hub or risk being seen as “Asia's farm”.
Australia's food manufacturing sector is bigger than education and tourism, but has struggled in recent years. Critics say food companies need to focus on innovation and development of new products tailored for Asian consumers. Australia's exports of processed food were worth A$17 billion (US$17.12 billion) last year, down from almost A$20 billion in 2005, according to the Australian Food and Grocery Council.
The problem is being examined by a Senate inquiry, which is looking at ways to promote exports as part of a larger look at a crisis in local food processing. Separately, a task force set up by Prime Minister Julia Gillard is expected to recommend the creation of a food innovation centre modeled after Singapore Polytechnic's Food Innovation and Resource Centre.
An expert on Australia's food industry, David McKinna, said firms needed to restore funding for food labs and look at ways to target Asian tastes.
“You have to change your flavor profiles, your package sizes and the food proposition,” he told The Straits Times. “Asians often live in smaller apartments and come from a background of not using refrigeration and of shopping more often. In some places, you need foods with smaller packet sizes and ready for wok cooking.”
McKinna, a consultant for food companies, cited a failed attempt to market the popular Australian milk brand “Rev” in Asia. “Here, it means accelerate, as in 'rev up your body', but in Asia, it was seen as anti-government and about revolution... We are very guilty in Australia of not understanding the Asian market.”
Australian food manufacturers face falling revenues due to higher costs, the growing clout of supermarket chains and their budget house brands, as well as a strong currency.
Several big food makers have been forced to close while others had to downsize. Heinz, McCain Foods and National Foods, owned by Kirin, have all closed factories, while one of the biggest biscuit makers, Unibic, had to be rescued by private investors.
Kraft Foods, which makes the iconic Vegemite spread, is seeking partnerships with scientific agencies to produce new foods, pointing to Singapore and China as examples of successful “food hubs”.
Its Australia and New Zealand, president Rebecca Dee-Bradbury said food makers need to boost investment in brand innovation and to look at ways to supply the growing Asian middle class.
“If we're going to be viable competitors across Asia with its 1.6 billion emerging middle class, then we need to get real about what sort of game we're playing,” she told an industry group luncheon.
Dee-Bradbury, who recently toured food hubs in Shanghai and Singapore, said Australia was largely seen as a supplier of unprocessed foods in Asia, rather than an innovator. “The impact on Australia's largest manufacturing sector, if we become a farmgate supplier, is unthinkable.”
Some firms have begun tailoring products specifically for Asia, especially China.
The country's biggest dairy exporter, Murray Goulburn, is looking to double its A$2.4 billion in exports, about 60 percent of which will go to Asia. China, in particular, has been a big buyer of formula and powdered milk since its 2008 milk formula scandal.
Its managing director Gary Helou said businesses could not simply hope to export products designed for Australians. “That doesn't work any more. Asians welcome Australia-made food products. They are seen as high quality, clean and safe.”
McKinna said wineries have begun targeting China, where many consumers are only just starting to drink regularly and are more likely to pick sweeter wines.
“The things that work well here don't work in Asia,” he said. “You have to be on top of it.” (mtq)