One On One: Mirjana Prica

AMT: Firstly, what is FIAL, why was it established, and what are its objectives?

MP: Food Innovation Australia Limited (FIAL) is a not-for-profit industry-related organisation that was established under the Department of Industry as part of their innovation agenda through the Industry Growth Centres initiative. We are an industry-led organisation built to consult and deliver to the food and agribusiness sector in Australia.. In terms of our purpose, we were set up to catalyse the growth of the sector globally. It’s really to increase the share of Australian food in the global marketplace.

We work across three pillars that we believe are the – excuse the pun – ingredients for success. The first is knowledge. We believe firms need knowledge – not just information, they need knowledge. As part of that knowledge pillar, we do research, we do analysis, we identify opportunities.

So in our Project 2030 report – Capturing the Prize – we showed that our sector is currently sitting at $59bn gross value add, roughly 4% of GDP in Australia, but it has scope to be a $200bn sector by 2030. Under that report, there are 19 growth opportunities. What’s really exciting about that report is not only have we identified where the growth is, we’ve also identified what needs to happen. We’ve developed roadmaps for each of those 19 opportunities. We engaged about 100 leaders across the industry, as well as some researchers, and we outlined what needs to happen to unlock that value across each of those 19 opportunities. What’s exciting for us is there’s a pathway forward, it’s about growth, it’s about value-adding. And what’s exciting is, if we champion the initiatives, there are an additional 300,000 jobs to be created across those categories, on top of the 550,000 that we currently have in the sector. So there’s growth, there are jobs, it’s really exciting.

What’s also exciting about that piece of work is that when the Prime Minister launched the Modern Manufacturing Strategy last year, the Government identified six priority areas that were of essential importance to the country, and food & beverages was one of those. And the work we’ve done on Project 2030 has been heavily referenced in the roadmap that was developed. So what we’re saying to the industry is: if you’re applying for funding, here’s a valuable source of information you can use to make sure your market data is correct, make sure you’ve identified where the growth opportunities are, and some of the challenges to unlock that. So that’s one of the pillars: knowledge.

The second is capabilities. We do a lot around market- and innovation-readiness. We work on transforming businesses, helping them to understand how to innovate. We did a partnership with Mars, called the Seeds of Change Accelerator. We had an expression of interest around the country where we had hundreds of applications. The idea of the program was to get small companies and big companies working together, but also to help small companies, through the resources of Mars, to really access the capability that large corporations have to address inhibiting growth obstacles. Six companies went through the program. One of them, Grounded, makes cheeses from hemp and cauliflower. As a consequence of going through the accelerator, they’re now trading in New York. That’s just one example, and there are others. So we do a lot around market- and innovation-readiness. That’s the second pillar.

The third pillar is connections. We connect companies to funding and to researchers, because obviously to lock in some of the key potentials, science and technology underpins it, and most businesses don’t have that capability in-house. We do a lot of brokering in terms of connecting businesses to researchers. We also help companies connect to customers in the market. And the last 18 months have been critical with COVID and the inability to travel. We’ve been one of the first in the sector to lead what we call virtual meet-the-buyer events. We’ve connected about 400 Australian export-ready companies to over 500 buyers from about 40 markets. There’s been over 1,000 one-to-one virtual meetings online, and millions of dollars in transactions. It’s a great win-win.

What we use to facilitate this connectivity is what we call the Australian Food & Beverage Catalogue. It’s a virtual catalogue online that profiles Australian export-ready companies. And we have hundreds of buyers from about 40 odd markets who can look through that catalogue. That’s the starting point of the engagement. So the three pillars are we work across knowledge, capabilities and connections, and we believe that’s the key to success in getting companies to catalyse their business growth.

 

AMT: How has COVID-19 impacted the sector? What have been the big lessons from the pandemic as well?

MP: I think the big lessons from the pandemic have been that you need to always have a backup plan, particularly in terms of raw material supply. A lot of the micro-ingredients that go into making foods come from overseas and therefore if there’s a disruption in terms of shipping, as there has been, you need alternative sources of supply. That’s caused a real problem for the industry – access to the right ingredients to be able to manufacture. Most of what we grow and produce is actually exported, but we still need some ingredients to come in, because we don’t have the economies of scale to produce them in Australia. We don’t have the volumes, labour’s expensive, electricity is expensive. You need to be able to compete on a global scale if you’re going to manufacture. So I think the first lesson is about procurement, and ingredients.

Secondly, think about your customer base and market diversification. Don’t put all your eggs in one basket. It’s sort of all business sense, business smarts – there are some things you just don’t do. A smart business person would have a diversified market and be spreading their profile and exposure.

And I think the third lesson is to just be open and not so rigid. Be agile. The shocks that the food and agribusiness sector experiences… we had the bushfires, we’ve had drought, we had mouse plagues, we’ve had geopolitical tensions that have caused ripples of anxiety across the industry. And then we’ve had COVID. So there really is no normal. They say we’re going to get back to business as usual, but the norm is that there is constant change. So businesses that build systems and processes that mean they can respond to these shocks and pivot quickly, they’re the ones that have succeeded.

 

AMT: It seems like a sector where resilience is incredibly important.

MP: Yes, and these businesses are quite resilient. You know, prior to COVID the sector was $61bn, and last year we hit $59bn. And that could be also cyclical because it relates to seasonal things that are beyond your control. So the sector is quite resilient, companies do pivot. But we did observe that some companies did struggle during the pandemic. I think the key message is: never be complacent. You’ve gotta be ready and you’ve gotta be agile and open and flexible.

What we’ve found is that when you’ve got a crisis, it’s really forced companies to innovate and do things differently. And we have seen that: companies who had been growing a variety of sorghum, because they were targeting a market in China, all of a sudden that market was a bit precarious, so they quickly pivoted to now looking at gluten-free type beverages. But that wouldn’t have happened if the tension had not appeared. And I congratulate them. They’re open they’ve pivoted, and that’s just the nature of doing business.

What was really good to see across the sector, as well as the resilience, was that everyone came together for the common cause to make sure that we had enough food to feed Australia. And also making sure we didn’t lose some of the food that we did grow and produce, to make sure it still went to a market, to a home. It wasn’t ploughed back into the ground. It’s a nice feeling working for the food industry because you know, we’re making sure everyone’s alive.

AMT: What are some of the big trends shaping the sector over the next few years?

MP: I think, food security, both from the perspective of making sure the food is safe to eat, and the ability to supply, the consistency in supply.

We’re also seeing that consumers are becoming increasingly discerning. Consumers are smart, and why are they smart? Because they’ve got information to their hand. Whether it’s credible or not is another matter, but in the old days we didn’t have information at our fingertips – these days we do. Consumers are becoming increasingly sophisticated, they’re becoming smarter in their choices, they’re being selective about their choices. On top of that, we’ve got population growth. We won’t have enough food on the planet to feed every mouth in 2050, so we have to be creative. But the rising consuming classes have introduced some interesting challenges because greater disposable income means people want to eat more energy-dense food. They’re being more selective about the protein type they’re eating.

There’s also a real issue around social license to operate. People want to know the provenance – where their food’s come from. How many miles has it done? Has it travelled around the world five times before it’s gotten to me? What’s the carbon footprint? Is the animal being treated humanely? So businesses who operate in this space have to be conscious of being connected to their end customer, but they also have to be mindful of the global dynamics that are shifting the mindsets and the purchasing power of consumers. It’s a very interesting time.

 

AMT: What are the big opportunities for Australian manufacturers in food and agribusiness supply chains?

MP: So out of the 19 opportunities that underpinned the $200bn by 2030, 11 of those are pre-farm gate and seven of those are post-farm gate. Things like direct-to-consumer models. Energy smart food – how we introduce efficient systems that create electricity around food, refrigeration, manufacturing processes. Or things like targeted eating. Targeted eating is all about formulating products to meet your requirements. What level of fat do you want? How salty do you want the product? Do you want high levels of sugars? Targeted eating as a category is $20bn in 2030 – that’s a big chunk of that $200bn. And there are lots of opportunities like that.

In terms of manufacturing, one thing we are noticing is that a lot of food manufacturers can’t get engineering to do the types of tooling required to create specialty products. For example, Natural Evolution is a company in Queensland, they’re banana growers historically. Rob Watkins, the owner, was driving home on the plantation one day and he ran over some green bananas that had fallen on the ground. He saw a big plume of dust, and the idea for converting green bananas into flour was born. He has now gone on from taking the flour from green bananas, to pulling out various ingredients within the bananas that have valuable properties, such as resistant starches. But the problem he faced was he didn’t have an engineering firm that could do all the engineering required. Fortunately, he’s a bit of an engineer himself, so he was able to create a world-first automated technology that takes green bananas and converts them into value-added flour and value-added banana ingredients.

So I think engineering capability is a big opportunity. If you think about food processing, each business has a unique manufacturing line. It’s quite bespoke. You need to have that capability that allows you to put all the pieces together to create your product.

Another opportunity is around protein. The world’s hungry for proteins at the moment, we can’t get enough. Obviously, plant-based products are getting a lot of air time at the moment. The challenge with plant-based products is that it either comes from pulses, or wheat, or canola, or soybean. So how do you isolate the protein and make it as pure as possible, with the right functionality to suit the end application? That’s a real opportunity for the manufacturing sector or for people who are skilled in that way: to develop processes that allow you to take a raw material, a commodity, do something to it, fractionate and segregate it into its valuable ingredients that then can be used. That’s a real engineering challenge.

Also, a lot of the dairy technology that we have, some of it just sitting derelict in plants around Australia, could actually be repurposed to meet some of those requirements. A lot of the technologies used in dairy – for example processing to create cheeses, or caseinates, or whey powders – are quite applicable to creating these plant-based proteins. So that’s a real opportunity.

Then of course, you’ve got new products coming onto the market. You’ve got insects. Circle Harvest, for example, grow insects on food waste, and then they convert that into valuable nutrients such as protein. What they need is automation in their processes.

The other area that’s exciting is around food waste and loss. That’s a massive opportunity for Australia. Billions of dollars are just lost every year, either through processes, or consumers are not being mindful, or products just losing their shelf life. There are losses across the value chain, which creates an opportunity. For example, we’ve worked with a company called Gekko Systems. They’re creating anaerobic digesters. They’re taking waste streams from multiple sources – dairy farms, piggeries – and taking that effluent and converting it into electricity, but also fertiliser. What’s great about that technology is it’s modular. They’ve created those modules in a container, you can put the container on the back of a truck and take the solution to the problem, whereas in the past you had to ferry all the waste to one central point. So it’s clever. There’s lots of engineering, lots of capability required around that in terms of how you manufacture such a confined, concise modular unit.

I think the food industry has got lots of exciting opportunities, we just need to have the resources to chase them.

 

AMT: What about challenges? What are the obstacles for manufacturers looking to diversify by getting into this sector?

MP: The biggest challenge in our industry is that of the 180,000 firms operating in the sector, two-thirds are what we call farmers and growers; of the remaining 60,000, 98% of them are SMEs. What that means is they don’t have the economies of scale to be able to build, and then to actually compete. Issues of scale are a big problem in Australia.

Another issue is that we don’t have many large Australian-owned firms. A lot of the larger firms that operate in our sector are foreign-owned. Therefore, their investments are directed from a global perspective: they’ll invest because it makes sense, but it’s usually for the homegrown market, it’s not because they’re trying to grow exports.

Thirdly, in terms of the sector, what would be exciting is if we had the food part more closely connected to the agriculture part, because they provide the raw materials that go into food and beverages. It’s that whole-of-value-chain perspective. And that’s what our Project 2030 report does. It says it’s not pre-farm gate or post-farm gate that’s most important. In terms of their contribution to the economy, they’re both the same; in terms of jobs, they’re about the same. What we’re saying is, if you’re going to really value-add, you have to be connected to your end customer, you have to understand what they want, but then you have to make sure you can source the right raw materials to have the right manufacturing conditions to then deliver for your customer. It’s not pre or post-farm gate, it’s ((itals)) and. ((end itals)) We need both.

 

AMT: Tell us about your professional background and how you ended up in this role.

MP: I’m a scientist by training. I did my PhD in physical chemistry, on artificial diamonds. I taught in Australia and in the UK, then I worked in CSIRO, in the food division. And then I got a job at George Weston Foods. My specialty has always been in commercialisation, entrepreneurship, creation, taking something to market. I then went overseas and worked for Associated British Foods, a large British company that owned George Weston Foods, where we set up one of the largest ingredient supplies in the animal feed sector. And then I came back to Australia and managed an operation for George Weston Foods.

And then I got this gig, setting up this business. It covered all my background: I’m a scientist, I can talk heavy science; I’ve also taught people; but I’ve also done business development and strategy; I’ve managed a business; but then I’ve created a business. So it’s quite a nice spectrum of experiences. And that allows me to, I suppose, do my job quite effectively.

 

AMT: And what is the most satisfying aspect of the job?

MP: The fact that I’m working to ensure that Australia has a food industry into the future. And food is essential for life, so I say I work in the most important and most exciting sector in the world. I’m able to give back through my experience to ensure we have a food industry for the future. And making sure we work together – it’s not one person, we’ve got to come together, contribute collectively, put aside our differences for the good of the industry, the good of our communities, the good of Australia, and others will benefit as well around the world. It makes me feel good knowing I’m working for a good cause.

www.fial.com.au