AUSTRALIAN MADE

Pandemic disruptions highlight the importance of local manufacturing

SPC’s role as a supplier of canned tomatoes on Australian shelves is more important than ever as the locally produced canned fruit and vegetable market shrinks. Food & Beverage Industry News reports.

SPC CEO Robert Giles has been in the food and beverage industry for decades and in that time he has seen the changing landscape around locally owned and sourced ingredients for canned fruit and vegetables, particularly tomatoes.

SPC CEO Robert Giles has been in the food and beverage industry for decades and in that time he has seen the changing landscape around locally owned and sourced ingredients for canned fruit and vegetables, particularly tomatoes.

“There are really only two major processors of tomatoes left in Australia. We are one of them and the other one is more a food service ingredient supplier, making us the only branded tomato supplier who put tomatoes on the shelves left in the country,” said Giles.

SPC currently works with eight tomato growers on a contractual basis. These contracts are decided upon at the beginning of the year before the season starts.

All the tomatoes are mechanically harvested in north and north-western Victoria before being transported to SPC’s plant in March.

The lack of tomato processors in Australia became more obvious when the COVID-19 pandemic struck in March of 2020, disrupting imports and the global supply chain.

In past years, a lot of cheaper options were imported from Europe, specifically Italy where the government offer subsidies for the farmers.

“We have called for changes to help make it an even playing field over the years,” said Giles.

“We are seeing the results of COVID disruptions to global shipping and supply chains now. SPC has stepped in to fill that gap, which is a shining example of why we need an Australian manufacturer that could ramp up its volume.

“Last year, COVID hit in March, which is the start of the tomato season, so we quickly changed our approach because we couldn’t keep up with demand. But we could produce more standard diced to help push as much out into the marketplace to fill the gap that people were calling for.”

Giles said SPC demonstrated its ability to react quickly and effectively to shifting forces in the local and global marketplace.

“Shipping is expensive after going up fourfold and coming in late, all due again to COVID disruptions. There are gaps in supply, yet Coles and Woolworths can call us and have product two days later. We make a lot of sense to them for that reason and

"We are seeing the results of COVID disruptions to global shipping and supply chains now. SPC has stepped in to fill that gap, which is a shining example of why we need an Australian manufacturer that could ramp up its volume."

When another wave of COVID-19 hit again in March, the lack of tomato processors became quite obvious.

that has given us a strong tailwind at the moment,” he added.

Canned fruit has also been a critical performer for SPC over its 104-year history, particularly the economic benefits growing regions, like the Goulburn Valley, enjoy as a result.

“That is an important point. It isn’t just about the people we employ, although we are the second largest employer in Shepparton. It is the larger environment it serves,” said Giles.

For the SPC network to succeed, several factors, from different areas of the industry, must come together, which in turn helps create jobs for regional farming areas.

“It’s a good thing for farming communities and we continue to build on that,” said Giles.

“We are currently working with TAFE to create apprenticeship programs that provide a future and more skilled pathway for people. All of those pieces come together to make up the whole circular economy up there.”

“We have more of a symbiotic relationship with our fruit growers,” said Giles.

“We give them an indication of how much fruit we need at the start of the season. For the last two seasons we take all of the peaches and apricots. The variety that they grow is specifically for us and our canned goods.”

Those fruits are generally perfect for the canning process because they are firmer and can withstand external forces without being destroyed.

“Then we have apples and pears. We take some from the start of the season, based on what we call straight pick, which is what is needed for canning. Then throughout the year, we take the grade-offs from the packing sheds because apples and pears can be stored all year, whereas with peaches and apricots you have to use in a couple of weeks,” said Giles.

Another critical factor in the contraction of canned fruit and vegetable manufacturers in Australia is the cost of labour, Giles said.

“My history shows me that over the past 10 to 20 years, we have seen a lot of food manufacturing going offshore because of the high cost of labour, energy costs and a range of other factors,” he said.

“We know Australia is a very expensive country to manufacture in but there are a lot of companies that have stuck to their guns and realise having a stable food manufacturing source in Australia is really important. Consumers and our key customers also call out a need for it to be available.”

Giles said one of the key factors, if not the most critical factor, in keeping more producers and food processors on Australian shores is the retention of food manufacturing skills.

“Reports say Australia can feed itself four times over, so we don’t have a food security issue. That’s all right if we only want to feed ourselves on grain and beef,” said Giles.

When they are offshored, as big multi-nationals have in the past, those skills to process food won’t be coming back to Australia. We think food security, in being able to produce our own food products, is really important.”

A positive benefit that Giles saw come out of the pandemic, and one that gives him renewed optimism, is the Federal Government’s response to manufacturing issues during the global pandemic shut down.

“The Federal Government now see manufacturing as one of the growth platforms for the future, where they were very much focused on education and tourism before,” said Giles.

“Suddenly, manufacturing is seen as one of those economy building areas that is getting some renewed focus.” F

Having a stable food manufacturing source in Australia is important.

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