Whilst the business world, particularly that of food manufacturing, is constantly advancing and evolving, many businesses are failing to effectively address their fundamental strategy and manufacturing processes in order to gain competitive advantages. With the Australian government in the process of introducing new country of origin labelling requirements, what will this mean for your food manufacturing business?
The Australian government is making the country of origin labelling changes largely due to market and consumer demands for clearer, more meaningful and accurate origin claims on food labels. Immediately, this should trigger strategic thoughts for all food manufacturing companies - if consumers are demanding labelling changes, there is an obvious care and concern for where food products are made, which in turn will affect the buying decision process and behaviours of consumers. The changes will involve the introduction of the following labels:
Grown in Australia: For foods where all of the ingredients are Australian grown.
Product of Australia: For all foods where all of the ingredients are Australian and all major processing has been done here.
Made in Australia: For foods where the ingredients come from Australia or overseas and major processing has been done here.
Packed in Australia: Features only a bar chart which shows the percentage of Australian ingredients.
All labels will also include the bar chart, showing the percentage of Australian ingredients in the product.
However, apart from merely adhering to labelling and packaging laws, engaging in an Australian grown food manufacturing practice makes strategic sense for business, on both a domestic and international scale. We have identified three key strategic advantages of using Australian grown products:
Australian products and produce, when manufactured or grown locally, have to meet stringent Australian legal standards and regulations. The result is food products that are often grown and produced to a superior standard when compared with the lower regulatory measures found in a number of overseas food production markets. This has obvious benefits for brands seeking greater product differentiation, whilst high product quality integrates with emerging consumer trends for boutique and organically produced foods.
A recent study by Roy Morgan Research, indicates that 88.5% of Australians aged 14+ are more likely to buy Australian-made products. Furthermore, 87.4% of respondents in China indicated that they are more likely to buy food produced in Australia. It is largely believed that these trends are influenced by the superior food standards as mentioned above. Yet regardless of the causations, the statistics show that there is strong consumer demand for Australian grown food products. Satisfying consumer demands, whilst adding value, is a cornerstone of successful business strategy.
Again with linkages to consumer demands, modern business and social trends have been placing upwards pressure on companies to exhibit stronger values of corporate and social responsibility. The reality is, growing and producing Australian made products provides benefits to the wider community. There is a direct correlation between buying or sourcing Australian products, and employment, local economic development and prosperity. Therefore, not only can you produce food products of a higher standard that meet consumer demand, but you can simultaneously give back to the Australian community - in particular, farmers - in doing so.
Whilst the business environment is becoming more globalised, maybe it is time to refine and localise your strategy. Particularly given the new country of origin labelling requirements set to be introduced, there has never been a better time to source Australian grown produce.