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Media Release

Premium food could underpin South Australia’s economic future

Tuesday, 8 December 2015

South Australia’s food and agriculture industry could become the largest employer in the State, with the demand for premium food both internationally and domestically set to increase enormously over the coming decade.

According to BankSA’s economic bulletin, Trends, compiled in conjunction with Deloitte Access Economics, South Australia’s premium food sector is poised to capitalise on an increasing appetite for premium food both in Asia and domestically.

BankSA Chief Executive, Nick Reade, said the opportunities are vast with employment in the food sector already comprising 6.5 per cent of the State's total workforce.

"Around 47,000 people are employed in South Australia’s food industry, which is four times the combined workforce of our car and defence manufacturing sectors," said Mr Reade.

"BankSA’s research shows that South Australia’s premium food sector has the potential to underpin the State’s economic future."

Agriculture is the sixth largest industry in South Australia, accounting for just over 5 per cent of the State’s output. In 2013-14, the total value of agricultural commodities produced in SA was $5.9 billion, incorporating crops, livestock, horticulture, dairy and seafood.

"Agribusiness is a future growth industry and South Australia’s enviable reputation for producing clean, green food for the premium food sector is a strength that can’t be readily replicated in many other parts of the world," said Mr Reade.

"The opportunities in selling to Asia’s rising middle class are enormous, and they have been further enhanced by new Free Trade Agreements with Japan, Korea and China."

The global middle class is estimated to increase from 1.8 billion people today to 3.2 billion people by 2020, with Asia expected to account for 85 per cent of this growth.

The Trends report highlights that the Asian middle class is aspiring to lift its standard of living, with history showing that people tend to eat more and better quality food as their incomes rise.

"South Australia is well placed to capitalise on the growing Asian market and help meet its increasing food and beverage needs through our premium offerings," said Mr Reade.

"And with Australia’s population expected to increase by 3.7 million people over the next decade, there will be growing demand for food in Australia also, including for more health and premium foods as incomes rise and consumer preferences shift."

South Australia’s meat producers and aquaculture industry are particularly well placed to tap into the rising demand for protein as incomes rise in Asia, and capitalise on our well-earned reputation for quality, clean produce.

The State’s meat exports have more than doubled over the past five years, especially to China, while the State’s cereal, fruit and vegetable exports have also enjoyed strong growth over the past decade.

South Australia’s international exports of food and beverage now amount to $5 billion annually.

Domestically, interstate sales of food products from South Australia amounted to around $2.3 billion in 2013-14, while the sale of food through local SA retailers and restaurants was around $10 billion.

Despite the positive outlook, the Trends report cautions that a dining boom for South Australia is by no means guaranteed.

Access to these new emerging markets also brings stiffer competition. There will need to be an expansion of the industry for the opportunities to be fully seized, costs will need to be kept down, efficiencies realised and productivity increased, says the report.

"South Australia’s premium food industry is already a success story which has enormous potential to expand even further," said Mr Reade.


See the Trends economic bulletin for December 2015