History is a powerful teacher. Wiley identified 7 2019 food manufacturing trends that dominated the sector and will continue to impact industry. From waste to energy and meat alternatives we have seen significant shifts that are reshaping operations, industries, products and customers’ expectations. What can we learn from these to ensure a successful 2020?
Waste or resource?
The last 20 years environmental considerations have been focused on how industry could reduce waste. 2019 saw an increased movement from the reduction mindset to exploring the burgeoning waste to energy sector. While this is not 2019 technology, in recent years large leading-edge companies had implemented waste to energy policies. In 2019, this shift opened the way for leading second-tier companies introducing waste to energy solutions into their environmental strategy and operating models. This was, in part, due to the central technologies becoming more mainstream and lower risk with a higher return. They offer a necessary competitive advantage, or in some cases, provide the ability to catch up with their competition.
Insurance and construction standards
Insurance of insulated panel buildings has been a topic of much interest across the last year with significant changes in the business insurance landscape. Following some large losses over the last few years, there has been a drive-by insurers to stipulate EPS replacement in buildings. This is the removal of EPS insulated panel and replace with PIR or XFlam core panel. This replacement has major practical issues, primarily the time and disruption to factory or cold storage operations. Removing walls and ceilings within hygienic and technology crammed workspaces, or operating cold stores is time-consuming and costly with significant operational impact. Fortunately, in most cases, the EPS can remain where fire sprinklers are able to mitigate fire risk through ensuring a higher flow rate. Greenfield medium to large facilities typically have fire sprinklers installed however there is a continuing trend for retrofit of sprinklers into older food plants constructed with EPS panels.
Meat export growth
The meat industry has been growing, driven by strong demand from China. China importance can be seen in statistics from the AFGC State of the Industry Report 2019. While the statistics are not exclusively meat-centric, they do highlight China’s status as Australia’s key export market with exports rising in 2017-2018 by 45.3% year on year and 36.2% 3year CAGR to $7.1 billion in value. The meat industry contributes 38.8% of the total share of food and grocery exports. Investment in the Australian meat processing plants was strong in 2019. The capital investment we have witnessed is across the whole supply chain of feed supply, processing technology, logistics automation and biogas projects.
Regional food industry
While the federal government provided stimulus in 2019 for some regional food producers to expand and create jobs, some companies successful in achieving grants, have been severely affected by drought. The impact of drought has meant that capital expenditure is delayed until ‘the drought breaks’.
Data and information
Buzz around Data, Industry 4.0 and Blockchain are all continuing to trend up but what is industry doing with that data? Some clients share their production data with Wiley when looking to improve efficiencies and understand what can be done better. Food manufacturing companies can gather a lot of info but don’t always have the time or experience to figure out what it means. Master-planning growth was popular, as was implementing ASRS and other automatic sorting systems that provide big gains in productivity and managing stock across the sector.
Medicinal Cannabis production in Australia
There has been an explosion of interest in this field. It is believed that over 300 licences have been applied for this year alone for companies to research and produce cannabis for medicinal purposes. Australia is well suited for growing cannabis because it receives substantial sunlight (that the plants love) and it is well known for its high-quality, safe production of agri-food and medicines. It’s also worth noting that Australia is one of only 4 countries globally that allow the export of medical cannabis.
This sector has gained a lot of media attention and it is rapidly growing. Wiley has been working with a number of alternative meat companies from plant-based to lab-grown, also known as cellular meat, to determine the design requirements of these facilities as they come online and begin to service the market.
2020 is shaping up to be another huge year in the food manufacturing sector and we are looking forward to seeing what it brings, with these past-learnings and foresight we can be more prepared for the year ahead.