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Food Agility CRCSHARING DATA TO BUILD BRAND, MARKETS, JOBS AND EXPORTS

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FOOD AGILITY CRCThere 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 Australia’s side.

Half of the world’s 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.

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 government’s $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

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THE VISION

Our vision is to empower Australia’s food industry to grow its comparative advantage

through digital technologies.

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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

WHAT THIS MEANS FOR BUSINESSThe 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 Australia’s 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 www.square.com.au 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

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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

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AgLink has 30 years of experience in agronomy and is one of Australia’s 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

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IMPACT ACROSS THE FOOD VALUE CHAINThe 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%

18%

12%

11%2%

Horticulture

Seafood

Beverages Other19%

15%3%

63%

Flour/cereals

Bakery products

Horticulture

Wine/beer

Dairy Meat

Other

29%

25%14%

14%

7%6%

5%

Liquor retailing

Other food retailing

Takeaway outlets

Cafes/restaurants

Supermarketsand grocery

62%12%

10%

10%6%

IMPORTS

FARM FISH AND FOOD PRODUCTION$42.8 Billion

EXPORTS$31.8 Billion $11.6 Billion

RETAIL FOOD SALESFOOD PROCESSING

Sales and service revenue $84.9 Billion (2011 - 12 data)

$141.4 Billion

Source: Australian Bereau of Statistics (2013abc; 2014abc)

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ENABLING SCIENCE AND TECHNOLOGY

The Food Agility CRC will bring together food domain expertise with technology.

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HUMAN INTERFACE TECHNOLOGY

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DATA SCIENCE & SPATIAL INFORMATICS

DATA MANAGEMENT & COMPUTING

SENSING & NETWORKS

ROBOTICS AND AUTONOMOUS SYSTEMS

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RIT

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SA

FET

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FOOD, PLANT AND ANIMAL SCIENCES

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AGRICULTURAL SCIENCE

ENVIRONMENTAL (SOIL, WATER,

WEATHER) SCIENCES

FOOD, AGRICULTURAL, AND RESOURCE

FINANCE & ECONOMICS

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FOOD SCIENCE TECHNOLOGY

The Food Agility CRC will leverage relevant products and services from commercial technology partners to provide a stable and reliable operational basis for service and product development.

Mature data analytics platforms already exist in the market. Other areas of technology are relatively immature and the digital technology industry is rapidly evolving. Technology advancement needs to be agile and adaptive to end user needs.

The Food Agility CRC’s R&D program will be driven by solving specific business challenges and will therefore adapt its R&D program to meet the specific challenges in each of the four strategic themes.

It will establish transdisciplinary teams that span both food domain and technology related sciences to maximise impact for each distinct project that it undertakes. Project teams will draw on both commercial and private sector R&D capability.

Digital technology related areas include:

• Sensing & networks – to ensure the right things are measured, and communicated when it is needed;

• Data management & computing – to ensure that data is transformed, linked, stored and reliably made available for advanced analytics;

• Data science, robotics & spatial informatics – to create actionable insights and decision support for situational awareness, prediction, optimization and autonomous decision making;

• Human interface technology – to ensure that digitally enabled decision support tools are easy to use and effective;

• Cyber-security – to ensure that sensitive data and algorithms are protected; and

• Data privacy – to ensure that data is able to be shared in a trusted environment.

HOW WE WILL DELIVER FOR INDUSTRY

Food Agility CRC will integrate the agile culture and processes of the digital economy through a whole-of-value-chain lens.

By agile we mean:

• Fast-moving, flexible and iterative challenge response

• Co-created projects where problems are work-shopped between trans-disciplinary researchers and market-facing partners

• Commercial partners can come and go

• Staged releases that embed scalability

• Design-led thinking and lean methodologies

• Collaboration between partners

We will solve business problems using participatory project design and management.

Each project involves: • A customer

• A business which wants to deliver the commercial services

• Researchers from multiple disciplines.

• Delivery of an applied outcome (e.g. an app, a trial of hardware, an algorithm)

• An agreed IP and commercialisation strategy.

• An impact assessment methodology including customer ROI

• The use of technology and data of commercial partners where relevant, and leverage the technology stack.

OUR PARTNERS

The Value Proposition for business includes:• Insight into trials that can be commercially

scaled;• Access to IP for commercialisation;• Leveraged R&D at scale with tax

incentives;• Opportunity to focus some of Australia’s

leading researchers on specific and individual challenges;

• Early access to talent for recruitment;

• Access to an extensive network of leading food and technology companies;

• Having your technology demonstrated by the CRC and its participants;

• Access to expert advice and training on: • emerging digital technology; • food system knowledge and

challenges; and• Reputational and leadership advantages.

FOOD VALUE CHAIN COMPANIES (CORPORATIONS, SMEs AND START-UPS)

RESEARCHERS

TECHNOLOGY, INFRASTRUCTURE AND SERVICE PROVIDERS

GOVERNMENT AND REGULATORS

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THE INVESTMENT

The Food Agility CRC has a proposed budget of $100 million over 10 years. The total CRC program funding sought is $50 million. The remainder will come from corporates, industry bodies, research partners and others.

The CRC will have flexible partner models. It is possible to substitute and add new partners. This allows the CRC to adapt and pivot according to partner and market needs. It will also drive management discipline to continuously deliver value to partners.

This means commitments for ten years from single businesses is not needed – a period of time over which much will change.

In-kind contributions are vital: some partners can provide non-cash resources that are just as important in helping the CRC meet its objectives. For example, we anticipate start-up partners will primarily make in-kind contributions which we highly value. In-kind could comprise access to staff, IP, technology, products, services or access to data.

Each major industry partner will be asked to commit at least one staff member (full-time or fractional) to work within the CRC to ensure:

• Communication, alignment and rapid response to changing needs;

• Partners get early knowledge of formative proof projects and investment opportunities; and

• The CRC gets rapid access to relevant industry know-how and networks.

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Contact us:Mike Briers, mike.briers@foodagility.com, +61 402 838 214Mara Bún, mara.bun@foodagility.com, +61 448 848 860

ChairDr Anne Astin

Food industry leaderExperienced director

CEODr Mike Briers

CEO with track recordBig data strategist

Food Agility CRCSHARING DATA TO BUILD BRAND, MARKETS, JOBS AND EXPORTS