ABM Advisor: The ABM Blog

  • Nov 11 2015

    How are customer tastes evolving in the food market?

    When it comes to the consumption of food, individual tastes and preferences are a significant driver of innovation, market shifts and new products.With so many factors to consider, it can be hard to identify and make full use of emerging trends. With this in mind, how can companies utilise business management software to capitalise on these growing areas? Global growth propelled by changing tastesFrost & Sullivan recently predicted that the market for food & beverages will reach US$20 to US$25 trillion by 2030, in terms of consumer expenditure. This growth is compounded by rising interest in particular areas such as freedom products and organically produced foods. These two markets are expected to reach $500 billion and $40 billion respectively in global sales by the end of 2015. In order to see further growth, firms must revisit their production methods.Despite the rise in expenditure, the organisation believes that retail prices will decrease to similar levels seen in 2010. In order to see further growth, firms must revisit their production methods, aided by business intelligence software. "The food and beverage market needs new tools, knowledge and processes to produce the food that people want," said Food and Agriculture Senior Industry Analyst Tosin Jack.Consumer trends aren't the only influencing forces in the sector. In terms of raw materials, Acidulants are becoming a more commonplace additive in production. The compound helps to stabilise pH levels, balance flavour and improve the shelf life of food products. According to Report Buyer, this particular market will grow by 7.6 per cent over the next five year to a value of US$6134 million globally. Capitalising on shifting trendsIn order to keep up with these social changes, it is important for businesses to keep collecting and analysing data from their target market. As a whitepaper from MarketResearch.com explained, customers are attracted to authenticity and food purchases are intrinsically linked to a variety of social factors, often unique to the region. This requires an organisation to constantly revise its strategy. It is also important to assess whether adopting a new product or method is feasible and will produce a good return on investment. Using technology such as business accounting software can be good way to accurately calculate this and how to best price new products.Wine industry set to see major recoveryTrend shifts in the industry are not limited to food products in Australia. A number of recent reports have highlighted growing value within quality alcohol production. According to Wine Australia, September marked a key turning point in exports for local growers. Values grew by 8 per cent over the year to a total of AU$1.96 billion, the highest rate of growth seen since 2007. This was mainly propelled by growing interest in Asian markets. For example, growth in China was pegged at 47 per cent, with the country contributing $116 million. South Korea is another growing market as both value and volume exported grew by 16 per cent in the year to September.  Growers are starting to sell their wines for better prices. The average value of wine now sits at a record high of $15.45/litre. Although it is early days for recovery in the industry, Chief Executive Officer Andreas Clark was pleased with the results, stating that a small group of growers had sold their 2015 vintage wines at higher prices this year. Smaller breweries in need of new strategies Pushing value as a selling point is also becoming a more commonplace strategy in the beer industry. Tim Collin, co-director of craft beer company Vale Brewing, stated that the variety of available beers is changing purchasing habits. "In the wine industry the customer expectations in terms of flavour profiles and quality is very high, and that's the same in...

    Read Full Story
  • Oct 30 2015

    can-businesses-rise-to-the-challenge-in-food-manufacturing-14105059.jpg

    Can businesses rise to the challenge in food manufacturing?

    Following on from another month of expansion, the manufacturing industry is standing strong in Australia, particularly in food production. Despite positive growth figures in September, food companies will need to address future challenges to see further growth in the coming months. Can businesses harness creative solutions through business intelligence software to remain efficient and productive?Food manufacturing sector expands for 16th consecutive monthAs measured by Ai Group's Performance Index, a rating above the neutral benchmark of 50 indicates expansion, and the overall index saw a rise of 0.4 points to 52.1 in September. Ai Group Chief Executive Innes Willox pointed to wider economic conditions as major factors in propelling the industry.The rate of growth in food manufacturing has eased somewhat in September."In encouraging news for an economy searching for sources of growth outside mining, September saw the manufacturing sector consolidate on gains generated in recent months," he said.  "The lower Australian dollar is a clear driver with local producers winning against imports in the domestic market and making further progress in export markets."Despite seeing a period of growth for 16 months, the food, beverage and tobacco index fell 0.7 points to a rating of 53.5 during the previous month. When you consider the July rating of 58.9, the rate of growth has eased somewhat for this sector. Firms may need to seek measures such as business management software to help see continued success. Factory shutdown poses challenges for WA potato growersAlthough the numbers have been strong for the industry overall, some sub-sectors have faced considerable obstacles to growth. After a long-standing debate between the government and industry representatives from Western Australia, a local manufacturer will cease operations next year. As reported in an October 1 ABC article, the Canning Valley factory plant, owned by Smith's Snackfood Company, will close during mid to late 2016. For the local potato farmers, this announcement has struck a major blow as many supplied directly to the factory. This includes Bendotti Exporters, which provided 1,000 tonnes per year to the Canning Valley factory, around 20 per cent of its yearly output. CEO Gary Bendotti said that the shutdown had changed the nature of the industry in Western Australia , especially given the current deregulation measures in the state.Structured stock software can help businesses mitigate supply chain adjustments.In times of unexpected change, structured stock software can help businesses deal with surplus stock and mitigate supply chain adjustments. Identifying potential suppliers along the chain is also a good step to build an alternative strategy in the event of external disruption. ACIL Allen Consulting explained that the Potato Marketing Corporation of Western Australia (PMC) removing regulatory barriers only benefits smaller firms within the industry. Although the consulting firm found evidence that PMC's actions could reduce shortfalls and over-supply, deregulation is not an effective strategy for the industry overall. There is potential for producers in the market to address challenges through their own means. Innovation key to future growthWhen it comes to implementing innovative practices, firms must consider the entire value chain. A joint report from consulting firm Wiley and the University of Southern Queensland stated that consumers have a more vested interest in the processes involved in making the final product, reaching as far as the primary production stage. In the short term, collaboration between different points of the value chain can be an effective way to share ideas to improve processes. This can be done through innovation hubs and growth centres, allowing industry professionals to access a wider range of perspectives.  Farmers can collaborate with other industry bodies to spur innovation. Heading further into the future, exciting developments in technology and science will become more commonplace, such as traceability through DNA, the use of autonomous equipment and the creation of...

    Read Full Story
  • Oct 29 2015

    financial-system-subject-to-government-changes-14103062.jpg

    Financial system subject to government changes

    After considering the results of a 2013 financial systems inquiry, the Australian government has released its response, highlighting a number of key agendas.

    Read Full Story
  • Oct 28 2015

    how-can-your-business-better-manage-risk-14101787.jpg

    How can your business better manage risk?

    Doing business in Australia is becoming increasingly complex. The number of factors decision makers must consider is growing, and external forces continue to present threats and opportunities at every stage. For enterprises of any size, risk management is a critical process that firms must be give due weight. Understanding the potential threats, with the help of business accounting software, can help firms draw up more effective strategies that account for future obstacles. Global firms ready to face new risksIn the next few years, innovation will be the most common challenges that businesses around the globe will need to address, as well as compliance and reputation. Among the 80 per cent of firms that utilise risk sensing methods, 71 per cent use them to identify financial risk, according to a report from Deloitte. In order to effectively identify risks, workplaces must have the staff capable of using analytics and deriving insights. 

    Read Full Story
  • Oct 20 2015

    3-ways-to-raise-innovation-within-your-small-business-14104272.jpg

    3 ways to raise innovation within your small business

    Organisations and businesses in Australia have been hotly discussing the need to harness and adapt innovation, especially following a recent report from Word Economic Forum (WEF).Despite rising one place to 21st in terms of global competitiveness, Australia is still lagging behind when it comes to innovation. For small businesses, this is an important issue to address, as inventive processes and products are a key way to build a competitive advantage within their markets. With this in mind, how can you fully utilise your resources to increase innovation?Optimise your workplace cultureSMEs must actively structure its environment to allow for openness and dynamic changes.In it's Culturing Success report, Microsoft highlighted three different types of business profiles when it comes to innovation: leaders, cruisers and laggards. Typically, leaders in innovation were more likely to encounter revenue growth, business efficiency, employee satisfaction and other such benefits.In order for an SME to become a leader in its industry, Microsoft stated that it must actively structure its environment to allow for openness and dynamic changes. This includes a re-think of the communication flows as well as the physical space.According to NAB's business innovation survey, the three most important cultural aspects that firms identified were:a strong knowledge of the consumer market the ability to reflect and learn from oversightsa high level of energy and drive. For the former factor, optimising feedback through customer relationship management software is an effective way to develop an in-depth knowledge of your chosen market. Combined with better internal processes, this can help improve a firm's offering and lead to developments which directly address customer problems. Harness the power of your workers Australia is not short on capable employees when it comes to creativity. The country topped the 2015 Global Creativity Index from the Martin Prosperity Institute, with a strong lead in the area of talent. This implies that we have a strong level of education and a large number of people trained in creative professions. This level of invention and vision can be a huge asset to your company.Using measures such as business management software can help small firms make the most of their human capital. Allowing employees to work where they can best use their skills will give way to better quality processes and methods. Utilise technologyInnovations in technology are some of the most rapid in the world, and adopting measures into your company is taking increasingly less effort to effectively implement. Technology helps personnel understand and improve the value chain. Technology can give businesses clear insights into its operations, allowing firms to identify where the weak points are in the value chain. Once a business discovers these, it can make better decisions surrounding R&D investment and areas to focus other efforts.  Through constant monitoring and adaptation, firms can shake up traditional business methods and reap the many benefits that come with an innovative mindset. 

    Read Full Story
  • Oct 8 2015

    how-does-australia-rank-in-global-competitiveness-14105136.jpg

    How does Australia rank in global competitiveness?

    Determining a nation's standings in the world is becoming of increasing importance to firms. As more Australian businesses gain the means to trade and deal with firms overseas, having a strong economic base is key for success.

    Read Full Story
  • Sep 23 2015

    australian-manufacturing-industry-remains-stable-in-september-14090971.jpg

    Australian manufacturing industry remains stable in September

    A recent joint analysis from Westpac and the Australian Chamber of Commerce and Industry has revealed a period of relative stability for the manufacturing sector.

    Read Full Story
  • Sep 10 2015

    harsh-economy-affects-business-confidence-14104888.jpg

    Harsh economy affects business confidence

    Australian and New Zealand businesses alike have faced a number of setbacks in August, leading to a major drop in business confidence.

    Read Full Story
  • Sep 9 2015

    nz-government-reconsiders-tax-systems-14101776.jpg

    NZ government reconsiders tax systems

    Over the past few months, the tax system in New Zealand has been in the spotlight, as the government re-considers the effect of the current schemes on businesses.

    Read Full Story
  • Sep 2 2015

    leveraging-opportunities-in-food-manufacturing-14102577.jpg

    Leveraging opportunities in food manufacturing

    As the manufacturing industry has seen a second straight quarter of growth, the food and beverage sector may be in a better position to advance new initiatives, possibly aided by business intelligence software. The Ai group performance ranking uses an index rating to determine growth in an industry, with any reading above 50 indicating expansion. The overall index rating for manufacturing rose by 1.3 points to 51.7 points.The food and beverage industry has been expanding for 15 consecutive months.Despite a 4.7-point drop, the food and beverage subsector had a positive index rating of 54.2, indicating an expansive period over August. This is the 15th consecutive month that this particular area has seen growth, which indicates that external factors have not dampened the overall prospects for firms. At the Crawford Fund's annual conference, VISY Industries Executive Chairman Anthony Pratt stated that the food industry is a significant contributor to the Australian economy and that it is "here to stay"."We must better communicate the fact that food is critical to Australia's future, just as wool and minerals have been in the past," he said, as quoted in an August 14 Farm Weekly article. How can this sector react to external forces?The cheese making sector offers a good example of how to implement your strategy when faced with challenges.Overall, IBISWorld has predicted that this specialisation will see a 0.7 per cent decline between 2015 and 2016. This was due to a number of external forces such as a drop in consumption trends, a rise in world dairy price and competition from overseas exports.However, two companies have defied the industry expectations. Murray Goulburn Co-operative and Bega Cheese Limited are expected to see growth rates of 2.5 per cent and 2.8 per cent respectively.Both of these firms have secured a positive outlook by improving their supply chain and securing deals. Murray Goulburn offered initiatives to their suppliers to ensure a steady flow of resources, while Bega Cheese gained a number of exclusive supply contracts. Australian consumers are buying more fresh cheeses, which presents an opportunity to explore niche strategies. For firms that do not have the resources to action these plans, there are still strategic measures you can action to take advantage of consumer trends.For example, IBISWorld stated that many customers were moving away from staple cheeses like cheddar in favour of fresh cheeses. This presents a perfect opportunity to move into a valuable niche and tap into a market that is not being met by your competitors.Trends apply to all food manufacturers and there are many opportunities to serve small, but increasingly valuable markets that haven't had their needs met. As the food industry continues to develop, a creative and adaptable strategy, amended with small business management software, will ensure the longevity of your firm in this growing area. 

    Read Full Story

Signup for Updates and our Newsletter

Get the latest news and updates on how your business can grow with the power and flexibility of ABM.

buyers guide