Sustainable Growth for Food and Wine Project

Introduction

Our Region is populated with many small boutique and specialist food and wine businesses. There is a need for greater collaboration and coordination to be able to compete on national and international markets.

We all support the state’s objective of premium food and wine from our clean environment. We think our region is highly suited to achieving these aims. Our task is to align all agencies to work together in the region to make the objective a reality.

Regional Development Australia Adelaide Hills Fleurieu and Kangaroo island as part of the Sustainable Growth for Food and Wine Project has identified some key strengths, opportunities  and issues for growth for the region that will inform development of strategic goals for the food and wine sector and assist businesses within the region to target future product development and growth. The key sectors covered are:

  • Wine and Beverages;
  • Dairy;
  • Meat and Livestock;
  • Seafood and Aquaculture; and
  • Horticulture.

This document summarises these strengths, opportunities and potential issues identified in each sector. The full story can be found in each of the Discussion Papers for each sector at www.rdahc.com.au. Each Paper then poses a series of questions, further summarised in this document, that are designed to get the region thinking and planning from a business, Local  Government, and State Government perspective to ensure longer term economic growth for the food and wine industries.

Seafood and Aquaculture

  • Main wild catch species caught in the region are: Rock Lobster, Western King Prawns, Abalone, Yellowed eyed Mullet and Pipis (cockles),
  • Main species farmed by aquaculture in the region are: abalone, oysters, marron and yabbies
  • In 2011-12 Kangaroo Island earned about 75% ($4.8M) of the value of Abalone aquaculture production for the state ($6.4M)
  • In 2011-12 the region produced approximately 90% ($310K) of the value of Marron and Yabby production for the State ($343K) with the majority of those produced on Kangaroo Island
  • About 57% of the total allowable commercial catch (TACC) for Pipis or cockles is allocated to license holders located in the AH, F KI region.

 

Wine and Beverages

  • The regions has about 14.4% of the States wine growing areas
  • There are five main wine growing regions within the AH, F & KI region – Adelaide Hills, Langhorne Creek, Currency Creek, Southern Fleurieu and Kangaroo Island;
  • About 57% of wine producers have exported to about 50 different countries with China, England and Singapore the top three destinations. Despite this exports are well below that of the Barossa and MacLaren Vale Wine Regions
  • About 3.3% of our population is employed in either grape growing, wine or other beverage manufacturing compared to the state average of 2.8%;
  • There is an emerging boutique beer production industry that further adds to the tourist ‘experience’ of visiting the region;
  • There are differences in the amount of grapes crushed and the value per tonne received between regions despite the quality of the grapes produced

Dairy

  • The greatest concentration of Dairy Farming for the region is in the Fleurieu area
  • More people in the region are employed in Dairy Product Manufacturing in the Adelaide Hills
  • The AH, F & KI regions has a slightly higher proportion of people (0.8%)
    employed in either Dairy Cattle Farming or Dairy product manufacturing compared to the State average of 0.2%.
  • There has been a decline in dairy farms and dairy cattle. The decline rate
    particularly for the Fleurieu area is well above the decline rate of the South Australian average.
  • The average milk produced by each dairy cow for the Central Dairy region of South Australia for 2013 (inc. Adelaide Hills and Fleurieu) is 5,694 litres per cow. Anecdotal evidence from local Fleurieu Dairy farmers puts this figure much higher

Horticulture

The AH, F & KI region’s key horticulture food produce are:


  • Apple & pears
  • Cherries
  • Seed Potatoes
  • Olives
  • Berries
  • Lettuce
  • Broccoli
  • Avocados
  • Mushrooms
  • Kiwi Fruit

Meat

  • A higher proportion of the AH, F & KI population, 2.3% were employed in livestock farming (inc. Sheep, Beef, Deer, Pig and other) and 0.11% in
    Poultry (meat and eggs) compared to the State average of 1.5% and
    0.06% respectively.
  • The region had slightly lower proportion of people employed in the Meat and Meat product manufacturing (0.4%) compared to the State average of 0.6%
  • A higher proportion of people in the region were employed in bee keeping (2.2%) compared to the State average of 0.9%
  • Kangaroo Island is a Ligurian Bee sanctuary and one of the few remaining in the world with export of quality honey products and Ligurian Queen Bees interstate and overseas
  • The region carriers about 22% of the State’s “Other Livestock” showing a diverse range of other livestock production for various products. Alpacas is one such animal with opportunities for growing in the alpaca meat market
  • The region houses about 19% of Goats in SA for Goat meat and
    dairy production.
  • The region is only a small producer of chickens and Pork meat

Grain

  • The AH, F & KI region has just over 1% of South Australia’s land for crop production with the Fleurieu being our main crop growing area followed by KI;
  • Crops grown across the region include wheat, barley, oats, lupins, beans (inc. broad beans), Durum, Peas, Canola and Triticale. Wheat and Barley are our largest crops.
  • Production amount for the last couple of years can be summarised as follows:

    • The region grows about 1% of the State’s total grain including about 1% each of the State’s wheat, barley and triticale and about 5- 10% of the State’s oats.
    • The region grows about 8% of the State’s hay; and
    • About 7% of the State’s Canola
    • Of the AH, F & KI workforce about 1.4% were employed in either Grain Growing (including livestock farming) or Grain Product Manufacturing which was slightly lower than the State average of 1.9%

Businesses

  • As a region of mainly small businesses many businesses owners lack the skills to capitalise on opportunities for growth
  • The main constraint for growth is capacity or scale of businesses
  • The region is predominantly a region of small and micro businesses with almost 65% of businesses as one-person / family owner operated with nil employees. The remaining 32% employ less than 20 people and with just 3% employing 20 persons or more
  • The region has a highly casualised workforce and as a vital resource for our businesses casual workers should not be overlooked when businesses are considering staff training 

General Findings

  • The region is known for its ‘Clean’ and ‘Green’ environment and its
    quality produce
  • Employment in Food Production, Manufacturing and Retailing was slightly higher at 4.6% or 2,499 persons for the AH, F & KI region than the State average of 4.4%
  • Where quality food and wine is concerned regional recognition plays a vital role in product marketing and brand awareness. Businesses need to use this and regions need to work together to strengthen their regions local, national and international recognition
  • High quality of the regions grain products coupled with our reputation for clean and green area is an effective marketing strategy; 

Questions for the Region

1. Are we geared up for the opportunities associated with the opening of the Chinese and other markets for commodity products?

2. With the decline in Dairy farms and cow numbers particularly across the Fleurieu area has this been compensated for with sufficient increase in milk production in the remaining farms?

3. Does the region need to consider a strategy to support our dairy farmers to remain viable?

4. Benefits are being seen where collaborations between associations,
individuals and businesses are working towards longer term sustainability of an industry. Is this a model that can be used in other locations and
sectors to provide additional support to our local food and wine industries and ensure longer term sustainability?

5. Some farmers remain independent to retain greater control while other have seen benefits in working together for longer term goals, what can we learn for each of these strategies?

6. Access to capital is one of the biggest barriers to growth, what strategies can be used to assist producers and processors access capital?

7. Is there sufficient recognition and provision of training in the region in business and other skills for each sector?

8. Do we have the skilled workforce to meet the needs of the technological changes each sector is experiencing?

9. Regional recognition and branding is becoming continually popular to utilize regional strengths in product marketing. Wine is one industry where this is used extensively. Are there improvements that can be made in regional branding for some of our Wine regions and other food produce?

 10. Niche and speciality produce are strength of the region and include
products like venison and alpaca, free range, grass fed, organic, artisan cheeses and meat products, condiments, marron, scallops, etc. How can we better support these and other sectors to grow and expand alongside mainstream sectors?

11. South Australia is the biggest processor of pork compared to the other states. The AH, F & KI region sites next to one of the biggest pig processing facilities in Australia but produce a minimal of pork. Is this an agriculture industry worth cultivating for our region and how can we better support our current pork producers?

12. Market differentiation elements such as sustainably caught, freshness, local and clean will undoubtable play a vital role in future product value and sales of seafood from Australia. Is the local seafood and aquaculture industries in a position to take advantage of these elements of branding to tap into new markets to grow their business or maintain their existing
markets with increasing competition from overseas?

13. With constraints around wild caught fisheries opportunities exist in
aquaculture and value added products. The region is in a good position to grow in these areas but is there the support from local and state
government for this to occur?

14. Have the tourist opportunities around the seafood and aquaculture industry been sufficiently identified and do they form part of regional tourism plans?

15. Is there sufficient recognition by the smaller aquaculture farmers of the need to understand product markets to capitalise on opportunities and grow?

16. The region has a number of regional strengths in horticultural produce how can we use this to the region’s advantage?

Smart Specialization

The other major finding of the Discussion papers as a collective is that the region has a wonderfully diverse food and wine sector with a variety of great products but mostly small in capacity and scale. The region lacks specialisation of a larger scale both in business and industry sizes.  The exception to this is the Langhorne Creek Wine region but it has a potential for greater regional recognition of its quality wines.

Smart Specialisation is a policy process of identifying  and prioritising of niche areas of competitive strength at regional level and asking if the region would benefit  from and should specialise in certain research and development and innovation projects in some of these areas. This requires the development of innovation partnerships and greater coordination between stakeholders like State government departments and local government to align strategic approaches and resources to support businesses to grow in these key areas.

This following summary provides an insight into some of those niche areas of competitive strength for the region. The region should consider those options that would provide the most economic and social benefit , prioritising  them for action within our food and wine sector and working towards development of the necessary strategic alignment between stake-holders and required resources for growth.

Areas of Potential Smart Specialisation

  • Aquaculture

    • marron
    • abalone
    • Seafood
    • pipi

  • Horticulture

    • apples & pears
    • cherries
    • olives
    • condiments

  • Dairy

    • cheese

  •  Meat & Livestock

    • free range, grass fed, organic
    • venison
    • alpaca
    • goat
    • honey

  • Wine and Beverages

    • beer and cider

Note: Wine is already an area of specialisation for the region

Areas of Potential Industry Clusters

  • Langhorne Creek Wine Region
  • Adelaide Hills Apples
  • Goolwa Pipi
  • Fleurieu Meat

Please fell free to question or contribute to the debate regarding food and wine in our region by contacting Johanna Milbank, Project Manager on 0423 134 725 or email: johannam@rdahc.com.au

This research was undertaken with funding provided by the South Australian Governments, Department of Primary Industries and Regions SA (PIRSA)
Regional Development Fund (RDF) Stream 1 as part of the Sustainable Growth in Food and Wine project 2013-2014, that facilitates sustainable growth initiatives for the Food and Wine sector across the AH, F & KI region

Disclaimer: The material in this report is intended as a guide only. No liability for errors or otherwise is accepted for the material contained herein either by the RDA, its principle, servants or agents. The RDA does not endorse any business, individual or product mentioned in this publication.

 

For further information contact:

Johanna Milbank

Project Manager

Sustainable Growth for Food and Wine Project

Regional Development Australia,
Adelaide Hills, Fleurieu and Kangaroo Island

Mobile: 0423 134 725

Email: johannam@rdahc.com.au