Emerging trends to take note

But producers and agribusinesses need to recognise these trends to succeed or they will struggle to cope going forward, he said.

Mr Hunt was the keynote speaker at the Nuffield Australia national conference in Adelaide last week, where he outlined of some emerging trends in ag.

One of the biggest was the rise of digital agriculture.

“There is such a rapid evolution of technology,” he said. “And the tech industry is recognising agriculture and food as an emerging area to be tapped into.

“Businesses will need to be set up to adopt these new technologies, possibly even employing ‘knowledge workers’ to better harness and manage these new technologies. And as a developing country, we need to see these advantages ahead of emerging countries.

“We need to be at the forefront of it because there are barriers, such as size when compared to the United States or Brazil, where it would be more profitable to deploy new technologies.”

Another emerging and alarming trend was the increase in protectionism in world markets, Mr Hunt said.

“World economic growth has been slower in the past five years than it had been in the five years prior,” he said. 

“And any economic recovery benefits have largely accrued to wealthy people, which has lead to strong dissatisfaction with the way economies are running.

“That has lead to fairly big decisions, such as Britain exiting the European Union, and moves away from liberal trading.”

Mr Hunt said the move away from free trade would result in further economic slowdown and reduce market access.

“Australia exports a lot of food and fibre so we need to maintain market access,” he said. “But sporadic access is hard for business planning, so we need to advocate and lobby governments for more open transparent trade rules and consistency of their application.

“We also need to secure these supply chains, so if there is an opportunity for market growth, we need to know it’s a secure pathway.

“A lot of Australian food products are being posted to China, which has created growth within our marketplace, but if taxation regimes are changed, then there could be a disruption in that. 

“Businesses need to carefully consider this increase in protectionism and how it is going to be a risk going forward.”

Mr Hunt said small brands, and their use of social media and the internet to expand, was another emerging trend.

“We think industry is dominated by big food companies, which has been true in the past,” he said.

“But these alternative marketing channels are helping smaller companies access the consumer easier.

“There has been a big swing in Australia towards smaller brands, mainly from the millennial generation, who are more willing to experience, spend money on food, and more concerned about the environment and animal welfare.

“This is forcing larger companies to slash costs or merge to remain profitable.

“Or they are also buying these small brands to target these niche markets.”

The rise of internet shopping was also helping smaller businesses to expand.

Mr Hunt said this trend would change today’s supply chain models considerably, “gone are the days of sending food to the distribution centre, then out to retail outlets”.

“Marketing strategies will also change, products will be labelled differently on the internet and how we emphasise their attributes,” he said.

“This also gives producers the opportunity to circumvent retailers, who may not offer good margins, and deal direct with customers.”

Mr Hunt concluded by saying “the pace of change may be just as defining as the change that comes itself”.

“So it’s important for producers and agribusinesses to keep an open mind and recognise change early,” he said. 

“We, as a bank, do a lot to tap into what’s happening across the world, learn from it and adopt best practice.

“But it’s producers who go forward and implement visions, and share knowledge with colleagues, that will solve the world’s food problems.”