Mar 03, 2021 by Mark Dingley
It’s been almost 7 years since Australian fruit and vegetable processor, SPC Ardmona, was thrown a lifeline – a $100 million co-investment from parent company, Coca-Cola Amatil, and the Victorian Government. At the time, we were really curious how they were going to spend this investment and use it to grow the business. If it was up to you, how would you have used the money?
At the end of the day, you need to plan for growth; no amount of wishing is going to make it happen. Case in point – Australia's manufacturing industry is far too volatile and unpredictable for any business, regardless of their industry, to expect it to happen naturally.
When visiting customers around Australia, we’ve seen (as well as been a part of) a range of different growth strategies. One thing we have noticed over the years is that the most effective strategies don’t necessarily require a big investment – but they do need dedication and vision.
SPC was fairly quick to announce that it would use the $100m to fund innovation. But it’s important to note that innovation is not about a ‘eureka’ moment, nor is it about simply launching new products – true innovation is actually sustainable innovation. Innovation across every facet of your business, from its processes and training to its products and marketing.
Manufacturers must create and nurture a culture that supports ongoing innovation - keep in mind that if you fail to innovate, you’re leaving yourself open to being overtaken by those who do. Dairy is a fantastic example of an industry that is doing just that – consumers want products that can be consumed on-the-go, so dairy brands have been satisfying this with a range of single-serve and lunch-box ready products (like cheese sticks and yoghurt packs).
Now more than ever is the time for you to pay attention to your customers. SPC’s Marketing and Innovation Director, Bronwyn Powell, said in an interview that one of her biggest daily challenges is “getting to the heart of the consumer insight...digging deeper and deeper for the killer insight and not stopping” - this is exactly the focus that manufacturers should have.
The main challenge for manufacturers (or any business really) is that consumers are always changing. It’s not enough to simply try and keep up – you need to be ahead of the game when it comes to how consumers think, feel and behave.
Consider that your existing processes could actually hold the key to your businesses’ future growth. The act of process improvement requires a wide range of tools, techniques and strategies (including lean manufacturing to reduce waste and Sig Sigma to increase quality).
One example of improving processes is implementing integrated vision technology to help identify any issues and actually stop products that don’t conform from leaving your facility in the first place. Another example is upgrading your product ID and inspection equipment – leaving this too long is a false economy, which can cost you money (in fact, why not take advantage of the boosted $20,000 instant-asset claim tax break that was announced in the 2015 Federal Budget).
Did you know that Australia’s food manufacturing industry is actually the second largest non-domestic contributor to food waste? We send 312,000 tonnes of waste to landfill annually. It’s beaten by the food services sector, which generates an incredible 661,000 tonnes of food waste every year.
Whilst landfills are getting bigger, your profits are getting smaller – food waste is, unfortunately, a huge contributor to Australian manufacturers’ lost profits. The answer lies in your manufacturing processes – by designing processes that are cost-effective and sustainable, manufacturers can minimise waste as well as enhance efficiency and reduce energy consumption. Ultimately, this will work to improve their bottom line.
Fortunately, chemical engineers at the University of Sydney want to help – back in 2014, they opened a training centre with the goal of educating the next generation of food technology.
The reality is that most Australian manufacturers are small companies each working within specific niches. This is something that manufacturers can use to drive them forward, rather than viewing it as something that holds them back.
Consider the beer industry – in 2012, Australia’s beer consumption slumped to a 50-year low and big brands suffered a real drop in sales. Micro-breweries actually stepped up to fill the gap in the market. In 2014, consumption dropped to a 70-year low but the craft beers still stood strong.
This craft beer boom has also led to increased interest and demand for Australian-grown hops; growers use the flowers to bring a unique and vibrant flavour to their beers. Melbourne based micro-brewery, Feral Brewing, took this even further by developing a German-style wheat beer using an unusual star ingredient – watermelon! Think about your own niche and how it can be exploited for new gains.
So, what’s your growth strategy? If you want to improve your processes, the team at Matthews is here to help – be sure to get in touch on +61 3 9763 0533.