Sydney's Agribusiness Sector* is a dynamic movable feast and one that has caught the attention of policy makers and investors. Adding tremendous value, it has often been described as the 'multiplier' of agricultural production. With demand for high valued food increasing and consumer behaviours fuelling the growth of 'personalised and free-from foods' expectations are that the sector will grow significantly over the next 5-10 years.
The term "Agribusiness" refers to the businesses involved in the production and supply of agricultural commodities. This includes food manufacturers, wholesalers and retailers.
This article provides a snapshot of the components that collectively comprise the sector in the Greater Sydney Region. Why? Because, the National Farmers' Federation has set an ambitious but achievable goal, set out in its "2030 Roadmap to guide industry growth", stating that by 2030 the value of the Australian Agriculture Sector could be in excess of $100 Billion and Sydney and NSW are sure to see investments and revenues flow into their economies with this level of growth. i
Furthermore, Australia's proximity to emerging markets and the cashed up middle classes in Asia will result in an increase in international visitors seeking premium customer experiences to quench their insatiable appetites for Australia's "green and clean" provenance guaranteed produce.
Primary production in the Greater Sydney Region - a very brief overview
Agriculture in the Greater Sydney Region has a long history going back to the colonial period and before this time the local indigenous populations utilised their highly developed skills and knowledge to harvest nutritional sources of food from the rich and fertile lands of the Hawkesbury river system and surrounding areas.
In recent times urbanisation has resulted in the reduction of the number of farms in the Greater Sydney Region. ABS data indicates that in 2005 there were around 2,610 farms. Today there are around 1,300 farms that generate incomes above $40,000 pa.
In 2016-17, the gross value of Agricultural Production in the region was $828 million which was 6% of the total gross value of agricultural production in New South Wales' $14.5 billion. Occupying 18% of the Regions land (2,269 square Kilometres) the sector comprised approximately 1,309 farms, 1,000 Agribusiness and employed 10,400 people.
Based on the gross value of agricultural production, poultry ($271 million), followed by nurseries ($140 million), and mushrooms ($92 million) contributed the most value in economic terms and together contributed 61% of the total value of agricultural production in the region.ii
But primary production is only one side of the story. To better understand the total value and future potential of the sector we need to consider the contributions of the Food and Beverage Manufacturing Sector and the supply chains that support these industries.
Food and Beverage Manufacturing Sector - the growing powerhouse
According to a report released in 2018, by the Australian Food and Grocery Council, the Greater Sydney Region's food and grocery manufacturing sector generates, on average, $17 billion in output per year and generates in excess of 25,000 jobs in the Western Sydney. iii If we take a closer look at the number of employed persons place of work (POW) data, from the ABS 2016 Census, it becomes evident that the sector contributes significantly more jobs across all of Sydney as illustrated in Tables 1 and 2 below.
Blacktown (2974), followed by Parramatta (2427), Cumberland (1795), Liverpool (1034), and Campbelltown (1025) employ the largest number of persons across Sydney's LGAs which is not surprising given that many of the country's largest food and beverage manufacturers are located in GWS and collectively form Australia's largest food and beverage manufacturing region.
What may come as a surprise is the large number of employees in the Food and Beverage Manufacturing sector in Canterbury Bankstown and is largely due to the presence of two large meat and meat product manufacturers in this LGA that employs just over 2600 workers.
It is also no surprise that Western Sydney exports around $2.5 billion of food and grocery manufacturing products a year internationally (between 2016 and 2017 international exports grew by 10.1%) and sells a further $5.7 billion to interstate and domestic regional markets. iv
Agribusiness distribution channels - morphing supply chains
Agribusiness distribution channels comprise wholesalers and retailers. Food and Beverage Wholesalers can be grouped into two major segments: Fresh Food and Other Groceries and both contribute significantly to the economy.
Sydney Markets is the largest wholesale fruit and vegetable market in Australia comprising 43-hectares at Flemington and each year sells around 2.5 million tonnes of fresh fruit and vegetables valued at over $3 billion and exports approximate $100 million of fresh produce.
According to the ABS 2016 Census the Fresh Food and Beverage Wholesaling Sector (Meat, Poultry, Smallgoods, Dairy, Fish, Seafood and Fruit & Vegetables) employed around 3,400 people whilst Grocery Wholesaling employed around 7,250.
The Food Retail Sector is multi-faceted and complex. The Department of Agriculture, Fisheries and Forestry FoodMap Report categorised the sector into two segments: Retail (Grocery - the dominate sub-segment, Specialist and Convenient) and Foodservice (Takeaway food, cafés and restaurant, events and leisure)v
On the night of the ABS 2016 Census the number of persons employed in Food Retailing in the Greater Sydney Region was 60,000. In terms of the top 5 LGAs, The Hills Shire employed the most people working in food retailing totalling 5,574 largely due to the presence of the leading supermarkets HQ, followed by Sydney LGA (5,098), Blacktown (4,917) Northern Beaches (3,232) and Canterbury-Bankstown (2,961).
The outlook is positive with demand for labour to continue to grow by up to 9% by 2023. The Department of Jobs and Small Business predict jobs will grow in the Accommodation and Food Service Sector^ as the leisure industry expands and demand for premium food, from both domestic and international consumers expands. vi
The Food Industry sector is morphing and subject to major global influences and consumer behaviours. As the sector matures it will continue to diversify, adapt to new technological advances and adopt better integrated supply chains.
As Sydney's population continues to grow and globalise, industry leaders, investors and policy makers are meeting around the clock to discuss how best to leverage the potential of existing industries.
The proposed high-tech agribusiness precinct alongside the Aerotropolis in the heart of the Western Parkland City is also driving interest in food production and manufacturing enterprises. It's not surprising given that projections indicate that a 500 hectare hub could generate $2.8 Billion in additional revenue over a 10-year-period.vii
For more information please contact Julie McAlpin RDA Sydney - Julie.firstname.lastname@example.org.
The emerging Agri-tourism industry is an example of an industry that has morphed and grown up and out of primary production. Contributing to the visitor economy the sector has gained the attention of Destination NSW and local governments in Sydney's peri-urban areas.
Farm gate tours, food and beverage tasting, fruit picking, technical tours, cooking schools, special events, long table lunches, master classes are in demand. Consumers seeking paddock to plate experiences are keen to understand food provenance and invest in immersion tours and maximise their experiences.
Whilst it is difficult to measure the value of Agri-tourism, NSW Destination recognises the importance of this emerging sector and is tracking the purchasing behaviours of both international and domestic visitors. With the release of NSW Food and Wine Tourism Strategy and 2018-2022 Action Plan the government is serious about investment in this largely untapped segment.
The sector's potential has also generated interest within The Office of the NSW Small Business Commissioner and Service NSW. Both agencies are working together to streamline red tape and licensing approvals. This will ensure farm operators are able to value-add and leverage opportunities to diversify their revenue streams.
* The term "Agribusiness" refers to the businesses involved in the production and supply of agricultural commodities. This includes food manufacturers, wholesalers and retailers.
^ ABS groups Accommodation and Foodservices together
iv KPMG https://assets.kpmg/content/dam/kpmg/au/pdf/2017/western-sydney-fresh-food-precinct.pdf
v Dept. of Agriculture, Fisheries and Forestry FoodMap Report 2012 vi Source: Department of Jobs and Small Business Industry Employment Projection 2018 Report.
vii WACC https://www.wcaa.sydney/agribusiness-precinct