food agility prospectus march11 2016

Download Food Agility Prospectus March11 2016

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  2. 2. 2 FOOD AGILITY CRC There is a national consensus that Australia has an enormous opportunity as a food producer. Much has been written on this. The issue is not if Australia should pursue this but how. How we should: Make sure we get the best value from our food production for our community? Harness our reputation for safe and sustainable food while still reducing red tape? Increase production when we have unprecedented input constraints and we are losing arable land to climate change and urbanisation? The starting point must be a market-led strategy. And the market is on Australias side. Half of the worlds population lives just to our north. World population will grow to 9.6 billion by 2050 driving food demand. Income growth in key markets will be much more important than pure numbers. As incomes rise in emerging economies, so too does kilojoule intake and, more importantly, a switch to protein takes place. Simply put the world is on the cusp of a huge leap in demand for higher-value food products. But it is not just any kind of food. Consumers in our markets are showing increasing interest in where food is produced, and in the freshness, safety and quality of food. They want to know where their food comes from, and they want to get the best value. Consumers are more digitally connected than ever. China alone represents $1 trillion, or 43 per cent of total global food growth by 2050. Concerns about food safety, pollution and product provenance are widespread in China - a market where social media influence on consumer choices is growing. The rise of social media is empowering consumers. We are also seeing rapid growth of home vegetable gardening and farmers markets; but also in the emerging interest in the property development industry in urban farming such as vertical and rooftop gardens in residential and commercial spaces. The food growth story is attracting new money and disruptive innovators into the industry.
  3. 3. In a world where everything is digitally connected, data is a critical asset. Food is no different. Faster and quicker insights from real-time data help us to more nimbly respond to what the market wants, be more efficient in how we produce it and get it to market, and show our customers how safe and sustainable our food is. Data - as a shared asset - is even more powerful. Freed from silos it becomes the basis of a knowledge infrastructure on which we can build an even stronger food sector. This will leverage the Australian governments $30.4 billion investment in the NBN. The future of food is digitally driven with... Producers capturing value by responding to rapidly changing consumer preferences; Exceptional quality and food safety records driving our brand; Environmentally and socially sustainable practices driven by data; A knowledge workforce driving productivity and higher margins; Transdisciplinary research solving business problems through co-creation, and A dynamic social network that shapes our brand. A DIGITALLY CONNECTED FOOD WORLD 3
  4. 4. THE VISION Our vision is to empower Australias food industry to grow its comparative advantage through digital technologies. 4
  5. 5. 5 Deploy real time big data market intelligence and predictive analytics that enable food producers to capture maximum value by making the right products, for the right domestic and export markets at the right time. Link food producers with consumers in new ways. Change from a world driven by companies to a world shaped by the consumer. Create innovative financial products (e.g. loans, insurance, valuation to support sale) based on producers better managing environmental risk and uncertainty using digital technology. Stimulate renewed investment in the food industry by building confidence in data enabled productivity gains. Demonstrate provenance of Australian safe and sustainable food (animal welfare, food safety, environmental performance, labour) while cutting the cost of red tape for business. Communicate with customers using nimble apps. Shape a clean & green Aussie food conversation in key export markets to command higher premiums, using advanced social networking strategies. Use decision support systems to scale knowledge across the value chain. Train future workforce in agri-economics and digital technology through work integrated learning in order to boost productivity, sustainability and market led thinking. Leverage advances in robotics to offset basic labour shortages. 1. PRODUCE THE RIGHT THING 2. LEVERAGE BRAND AUSTRALIA 3. ACCESS TO FINANCE 4. BUILD FUTURE WORKFORCE SUPPLY DRIVERS DEMAND DRIVERS POWERED BY DIGITAL TECHNOLOGY OUR THEMES
  6. 6. WHAT THIS MEANS FOR BUSINESS The Food Agility CRC will work with partners to identify business challenges which we can use digital technology to solve. Some examples are below. Barilla Bay Oysters is a major producer of oysters with over 100 hectares in oyster leases. They are fully integrated with a processing plant for frozen half-shells, a restaurant, a shop and a tourist centre. Oysters are a live product that command a premium price. Live oysters from Australia return ten times a tonne more than cooked oysters from China. There is a big market potential in Asia with growers reporting up to 600 per cent margins for exported oysters. Oyster sales rely on Australias reputation for excellent food safety standards. Oysters are filter animals. When it rains, oysters accumulate toxins from land run-off. Based on data from the nearest weather station, the regulator then closes oyster farms temporarily to protect human health. Each closure can cost growers like Barilla Bay Oysters between $20,000 to $100,000 a day; with costs nationally around $34 million annually. Analysis indicates closures can be reduced by at least 30 per cent using real- time salinity sensors. We are currently in a commercial trial with CRC partner The Yield. Using their technology, we can reduce the number of harvesting closure days giving an instant return on investment. Justin Goc, Manager, Barilla Bay Oysters Skewered Brazilian BBQ is a mobile barbecue company launched in Melbourne in 2015. The company uses to leverage digital technology and big data to optimise where and what they sell, and to minimise waste. Data from the Square Dashboard accessible onsite is powering their business to sell what consumers want, where they want it, at competitive prices. They can control their inventory to cut down waste, which also reduces costs. Data analysis through Square has been invaluable for preventing food wastage from our beginnings. It is socially and economically beneficial for us as a small company, and as individuals to be constantly considering whether or not our food production is accurate and the data we use allows us to solidify this. Emily Gorman, co-creator of Skewered Brazilian BBQ 2 LEVERAGE BRAND AUSTRALIA Use Case: Reducing the cost of compliance with food standards and demonstrating food safety and provenance Business challenge: Understanding where and what customers want and reducing waste 1 PRODUCE THE RIGHT THING 6
  7. 7. Business challenge: Making more finance and insurance products available for food production through better management of risk 3 ACCESS TO FINANCE The finance and insurance industry price risk into their products and services. Much of the risk in food production, particularly on farm, is driven by unforeseen weather and environmental conditions. Digital technology can be used to help food producers reduce risks through better decision support tools. They are able to optimise farm inputs, waste, water and energy outcomes that in turn enhance natural capital and ecosystem services. This same data can then help banks assess risk and how well these are managed. For example, farms are less risky when they manage their natural capital - soil, water and biodiversity - well. The National Australia Bank is pioneering valuation of natural capital to build a portfolio of credit products. This will deliver access to more funding options to producers. Farmers are innovative on their own land with respect to their farming practices, and they are calling for a similar level of innovation from their financial service providers. NAB Chairman Ken Henry 4 BUILD FUTURE WORKFORCE AgLink has 30 years of experience in agronomy and is one of Australias leading agricultural business networks. AgLink has 19 shareholding members, with 210 distribution outlets Australia-wide, over 350 agronomic staff and sales in excess of $1 billion products annually. Each agronomist provides advice and support to their clients on all aspects of integrated crop production. During peak production periods, agronomists can visit fields weekly. This is time consuming and expensive. If agronomists can access accurate data remotely, they could increase the number of fields they support by 40 per cent. This also benefits the growers they serve. The agronomists will be able to intervene more quickly and before damage happens to crops. There is an Australia-wide shortage of agronomists making recruitment difficult. Access to farm specific, real time data will revolutionize the way agronomists think about their day to day planning and how they go about providing advice to clients. Phil Hoult, AgLink Seed and Commercial Manager Business challenge: Overcoming the chronic shortage of agronomists in Australia 7
  8. 8. IMPACT ACROSS THE FOOD VALUE CHAIN The Food Agility CRC aims to break down data silos with partners that collaborate across the value chain for fresh and processed food. Real time market signals from target growth markets will bolster the knowledge infrastructure that strengthens the entire food industry. Seafood Milk Other Grains/oil seeds Meat 34% 28% 22% 10% 6% Seafood Dairy products Wine Grains Meat Other 29% 28%