THIS Asian Century is a great time to revive food processing, writes GEOFF BALL
The Federal Government's white paper Australia in the Asian Century highlights the opportunity for Australian food producers to provide high-quality food to the growing numbers of increasingly wealthy Asian consumers.
By increasing productivity and production, Australia can become the food bowl for the whole region.
However with opportunity there is also risk.
Asian diets are moving rapidly towards consumption of processed foods, looking for the consumer benefits of convenience, health and safety.
The causes are the region's increased urbanisation, globalisation of the food distribution system, and increased numbers of supermarkets.
Large global food companies have already invested heavily in Asia to take advantage of changing consumption patterns and world trade is increasingly of processed produce.
By contrast, Australia's food export processing is mainly to the minimum level needed for preservation and transport.
The need to add value has been heralded in the past - by the Prime Minister's Supermarket Council to Asia as long ago as 1996, for example - but efforts to increase the proportion of packaged consumer food exports have had very little impact.
The Australian food processing industry has not risen to the challenge for a number of reasons. The main ones have been high costs due to the relatively small size of the Australian consumer market and the distance to the larger, mainly northern hemisphere, consumer markets.
Asia's growth, and especially that of our neighbour Indonesia (projected to be the world's 10th largest grocery market by 2015), provides a new opportunity for processors.
We now have a large market in a proximity close enough to scale up manufacturing. This can provide opportunities, especially for consumer product exports based on Australia's largest and most competitive industries - meat, dairy and grain-based foods.
The opportunity is to understand the market and deliver custom-designed products and ingredients specially tailored for Asian conditions.
With its natural and renewable advantages, the food industry and its agricultural base is one of Australia's best-founded industries.
Australia does not have better options to develop an existing industry into a more important and integrated contributor to its wealth.
If the Australian industry does not grasp this opportunity, there is every chance the future will be increased competition and imports from Asia rather than exports to Asia.
- Geoff Ball is a food industry consultant.