061218 Processed Potato Industry Plan - Potatoes … Potato Industry Strategic Plan - 2006 3 Table...

Australian Processing Potato Industry Strategic Plan2006 - 2011

Prepared on behalf of:

Horticulture Australia Limited & the Australian Processing Potato Industry

HAL Project No. MT06026 - December 2006

Russell Cummings

STRATEGIC BUSINESS DEVELOPMENTPO Box 8153 BARGARA QLD 4670

Phone: (07) 4155 6443 Fax: (07) 4155 6430

Web: www.sbdonline.com

Processing Potato Industry Strategic Plan - 2006 2

About Strategic Business DevelopmentStrategic Business Development Pty Ltd works with commercial, industry and government clients to

add tangible value through rigorous process and quality people. We typically work on assignments involving strategic input that is commercially focused and results in sustainable change. We add value through rigorous processes and thinking that empower stakeholders to move from “Strategy to Action”

HAL Project No.: MT06026

Project Team & Roles:Russell Cummings - Workshop Facilitation, Surveys & Reports

Strategic Business Development Pty Ltd, PO Box 8153, Bargara QLD 4670

Ph: 0414 929 585 Fax: 07 4155 6430 Email: [email protected]

Simon Drum

Horticulture Australia Ltd, Industry Services Manager: Vegetables - Consultation

DisclaimerThe information contained in this report has been compiled from information supplied by Horticulture Australia

Limited, Ausveg Limited and other publicly available information. It does not contain legal advice.

Every effort has been made to ensure the information presented and the conclusions reached are realistic and not misleading. However, Strategic Business Development makes no warranty as to the accuracy of the information contained in this report and will not accept responsibility or liability for any loss incurred by any person or entity relying on the information in this report.


Table of ContentsSection 1. - Overview

� Background Information and the Summary Plan

Section 2. - Situational Analysis� Situational Analysis, Industry SWOT and Key Issues

Section 3. - The Processing Potato Industry Future� Vision, Mission and Strategic Imperatives

Section 4. - Strategic Imperative #1: Improve consumer demand for Australianprocessed potatoes

Section 5. - Strategic Imperative #2: Improve industry competitiveness

Section 6. - Strategic Imperative #3: Improve industry communication and information systems

Section 7. - Strategic Imperative #4: Improve leadership and management capability

Section 8. - Strategic linkages to the VegVision 2020 Industry Strategic Plan

Appendix A: References, interviews and workshop attendees

Section 1

The Overview

Background Information and Summary Plan

The Australian Processing Potato Industry Strategic Plan


Overview

The development of a industry strategic plan is essential for the Australian processing potato industry as it moves into a period of intense global competition, rising costs and declining world prices.

The industry strategic plan will be used to guide the investmentof industry levy funds and to focus leadership on the critical needs of industry in the future.

This plan has been developed utilising the following 4 step process and is illustrated overpage:1. Analysis: situation and environmental analysis2. Synthesis: a workshop to develop a shared industry view and a

draft industry plan3. Consultation: discussions and feedback from industry on the

draft industry plans4. Review: a workshop to review the draft plan, establish key

action plans for inclusion in the final industry plan

The Plan has been constructed utilising three timeframes:1. Far Horizon – the industry vision has been set at a 10 year

time frame, nominally 2015.2. Mid-ground – the industry strategies have been set at a

nominal five year timeframe. In effect, industry has posed the question if we are to achieve our 10 year vision, what strategies must we undertake in the next five years?

3. Short Term – industry action plans and project plans are usually set at one to three year timeframes to facilitate ease of management and clarity of action.

Linkages to the Australian Vegetable Industry Strategic Plan –VegVision 2020 are outlined in Section 8.

Introduction

The plan has been developed by industry with consultation

throughout the supply chain.

The Plan was developed in 4 phases to ensure it meets the needs of

Industry.

This strategic plan has a 5-year planning

timeframe that outlines the strategic actions that are required for industry to achieve its

10-year vision.


Developing our Processing Potato Industry Strategic Plan

Industry Workshop 1

Broad Industry

Consultation

Growers

Industry Strategic Plan

Supply Chain

Government

•Direct Contact

•Phone Interviews

DRAFT Strategic Plan

Review of existing Plans, Studies, Reviews and Documentation

Situational Analysis and

Key Issues Paper

Industry Workshop 2

Industry Consultation

•Direct Contact

•Phone Interviews

•Online Feedback

11 Oct 06

30 Aug 06

Dec 06

14 Aug 06

Industry Consultation

Overview


The Processing Potato Industry One Page Plan

The Current Reality

Potatoes – Australia’s number one vegetable crop

– 20% of total vegetable production.

Processing potatoes are 50% of production

Domestic consumption is declining.

Consumer understanding and knowledge is poor.

Rising costs of production are impacting on our

competitiveness and profitability.

Leadership and succession are critical issues

The Vision 2015

“Our vision is that the Australian processing potato industry will be

sustainable and globally competitive, driven by consumer

needs.”

Our Strategic Imperatives

Improve consumer demand for Australian

processed potatoes

1.1 Communicate the beneficial attributes of Australian processed potatoes to consumers.

1.2 Develop innovative processed potato products

Improve industry competitiveness

2.1 Use R&D to build better businesses

2.2 Encourage a focus on whole of chain productivity improvement

2.3 Enhance environmental sustainability

2.4 Improve our ability to respond to disease & pest threats

Improve industry communication and information systems

3.1 Build collaboration within the supply chain

3.2 Deliver industry information requirements

3.3 Encourage the use of improved communication technologies

Improve leadership and management

capability

4.1 Improve industry management capabilities

4.2 Improve industry leadership and representation

Section 2

The Situational Analysis

Situational Analysis, Key Issues and Industry SWOT



Processed Potatoes – Australia’s No 1 Vegetable Crop

Potatoes are by far the largest vegetable crop in Australia accounting for approximately 20% of total production. In 2005, the gross value of the crop in 2004 was $480m -approximately 1.31 million tonnes with 56% of this is sold as “processed potatoes” (42% frozen and 14% crisping) with the remainder as fresh (36%) and seed (8%)Frozen processing in Australia is dominated by two large Companies: McCain Foods and Simplot Australia. Processing plants are located in Tasmania, South Australia and Victoria. Most potatoes used in frozen processing are grown under contract. In Crisping, the two major processing companies are Snack Foods Australia (Arnott’s Biscuits) and Smiths Snackfood Company. Most potatoes are grown under contract and processing plants are located nationally.Domestic potato consumption is declining with estimates of around 63 kilograms per person per annum, although it appears that the proportion of processed potatoes consumed is rising at the expense of fresh products. The marketing function of the processing potato industry is predominantly driven by the processing companies. For the last 10 years, production costs have been rising and threats of low cost competition from other countries have been increasing.


National Production

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1998 1999 2000 2001 2002 2003 2004 2005

Tonnes

(millions)

National Production

1.10

1.15

1.20

1.25

1.30

1.35

1.40

1998 1999 2000 2001 2002 2003 2004 2005

Tonnes

(millions)

Area Planted v Yield

32

34

36

38

40

42

44

1998 1999 2000 2001 2002 2003 2004 2005

Hectares

(thousands)

30

31

32

33

34

35

36

37

Area Planted Yield

tonnes/hectare

Area Planted v Yield

32

34

36

38

40

42

44

1998 1999 2000 2001 2002 2003 2004 2005

Hectares

(thousands)

30

31

32

33

34

35

36

37

Area Planted Yield

tonnes/hectare


Stakeholders - strategic priorities & values

�Security of funds for research projects, peer recognition, consistent direction for strategic research, opportunities to publish, outcomes for industry

Research

Providers

�Confidence in safe, quality food, convenience, taste, variety, low prices, consistent supply, product information.

Consumers

�Products that meet consumer demands, high stock turns, low waste, minimal cost, good margins, consistent availability, stable relationships, guaranteed supply

Retailers

�Stable or growing industry, high input levels, high productivity, constant change, rapid adoption of new technology, good margins

Input Suppliers

�Consistent quality product, low reject percentage, competitive prices, spread of production, stable relationships, low labour costs, efficient processes, good margins, strong consumer demand

Processors

�Industry ownership of strategic plans, quality planning processes, appropriate expertise in planned development, strategic project investment, measurable outcomes for industry

Processing Potato IAC

�Measurable returns from investments, operational efficiency in service delivery, company reputation, growing revenue base

Horticulture

Australia Ltd

�High public profile, status and visibility with growers, less bureaucracy, increased industry representation, increased income, lower costs, relevance to industry

Industry

Associations

�Lower costs, access to markets, access to timely and commercially valuable information, higher prices, less complexity and risk

Levy Payers




It is a noted trend that as markets become increasingly global, inefficient and high cost industries will need to become efficient and differentiate or they will decline.

Australian companies, with inherently higher cost structures, are competing in global markets and our Australian market is now open to low cost competitor countries.

The Australian potato processing industry is at the crossroads of global competition. The industry is a high cost producer (by global standards) selling to a low cost/high value demanding consumer.

The food consumer predominately buys pre-prepared potato products from major supermarket chains and the food service sector, who both buy from multinational processors. Both processors and retailers are in a market of “cost down” and “value pricing” to the ultimate consumer. A high cost industry cannot be sustained in this environment.

Private label products are often processed in other countries, for example: Woolworths’ “Home Brand” tinned potatoes (as at the date of this report) were processed and packed in Belgium, while all “Woolworths Select” brand frozen chips, fries, wedges are from the Netherlands and in the case of frozen mash – Belgium.

With the two big Australian supermarket chains pushing for upwards of 30% private label sales, and the local versus imported issue in consumer’s minds becoming less important to quality and value, the future of the processing potato industry in Australia, including both growers and processors, isbecoming increasingly fragile.

Global supply chains compete with growers and processors

The Australian industry is a relatively high cost producer selling to a low-cost, high value demanding consumer.

Australian supermarkets are

moving to 30% private label products with

many products sourced from overseas suppliers.

The industry is at the crossroads of global competition and must make significant changes in order to remain viable in the

long term.



The industry must focus on reducing costs and increasing productivity to combat changing market dynamics.

In a global market, Australian value chains are competing with global value chains for market share. The emphasis must be on improving efficiencies and productivity through the entire valuechain.

Initiatives such as: benchmarking, “Lean Production”, industry consolidation, clustering and “Product Centres of Excellence”are all options that can be explored to improve value chain productivity.

Access to quality low-cost labour is a horticulture-wide issue that has significant implications for the processing potato industry.

Water is becoming an increasingly important issue in terms of access and cost. The potato industry, as a relatively efficient user of water, may be able to use this to its advantage.

Compliance and regulation have significantly increased the operating costs for horticultural producers in Australia. Many of these costs are not borne by our global competitors.

There may be niche opportunities to develop premium quality products to address the needs of specific niche markets in Australia and overseas.

The industry can look at collaboration throughout the value chain in order to improve productivity across all sectors to ensure our processing potato value chain is globally competitive.

Rising costs of production are impacting our competitiveness

Industry costs are rising while returns to growers

are declining.The industry must focus on increasing value chain

productivity.

The industry must improve collaboration through the value chain in order to significantly improve productivity.

Labour, water and compliance costs are all

reducing the competitiveness of

Australian horticulture.



Industry perceptions are that the processing potato Industry lacks cohesion, profile and a “single voice”. The industry is perceived to have an ill-defined image with consumers.

The industry is fragmented with a number of organisations representing industry at national and state levels.

Given the relatively small size of the Australian industry thereappears to be duplication of effort and inefficient use of scarce, industry resources.

Industry leaders need to ensure that appropriate and relevant skills and expertise is engaged to assist Industry Bodies, Boards and Committees in future decision making.

Farm succession is a key issue facing the industry. The average age of the traditional grower is increasing. Over the next 5 to 10 years, as this group ages, it will want to “hand over” the farm, however, the next generation are less willing to take over the reigns.

There are also generational implications for the industry with Australian born generation X and Y workers shying away from the repetitive and labour intensive work to more “softer”industries of IT, finance, management, marketing and human resources.

As the twin forces of labour shortage and lack of grower succession combine with declining returns, it is apparent that the industry will face some major re-structuring over the next few years with a decline in the number of farms.

Leadership and Succession

Industry perceptions are that it is

fragmented and lacks cohesion, profile and a “single voice”.

With multiple industry organisations, there is duplication of effort and inefficient use of scarce, industry resources.

The industry faces major restructuring as poor grower returns, farm succession and access to labour issues

combine.


The Processing Potato Industry SWOT Analysis


•Bio-security breach – disease incursion

•Imported products from low cost competitors

•Gen Y farmers & succession

•Rising business costs, regulation and compliance

•Consumer attitudes to potatoes, processed products and GM foods

•Consolidation of global supply chains

•Closure of Australian plants – change in investment focus for multinationals

•New technologies in production, processing, packaging, transport and IT

•Consumer focus on convenience, health & well being and the emergence of functional foods

•Positive image of Australia in overseas markets

•Improved communication technology and access

•Alignment with global supply chains

ThreatsOpportunities

•Reliance on old cultivars

•Poor health image of potatoes and processed foods

•Fragmented industry: lack of a leadership group

•poor Agri-political process: no targeted approach

•High costs and regulation relative to competitors

•Poor collaboration and communication through the value chain

•Limited industry consumer knowledge

•Good people – experience, knowledge, skills

•Great product – well known, good demand, high quality, established consumption habits.

•Good R&D&E program and skills

•Relatively good infrastructure and facilities

•Australia has a good growing environment for potatoes

WeaknessesStrengths

Section 3

The Processing Potato Industry Future

The Vision, Mission and Strategic Imperatives



Linking the Vision to Outcomes

The Structure of the Plan

The 2006-2011 Strategic Plan recognises the need to move from Vision to Action by utilising the following planning structure to highlight the linkages between elements of the Strategic Plan:

Vision and Mission

The Industry’s primary focus

Strategic Imperatives

The key actions that industry must take to achieve the vision

Strategies

Broad strategic directions for achieving the imperatives

Strategic Goals

High level goals and actions for delivering the strategies

Project Action Plans

The project plans required to deliver elements of the strategic plan. The project plans will be the specific

responsibility of industry organisations and stakeholders – Processing Potato IAC, Ausveg, Processing Potato Association of Australia (PPAA), HAL, commercial entities, etc. The details of these project plans

will not form part of the industry strategic plan.


The Industry Strategic Imperatives


The Vision and Mission of the 2015 processing potato Industry future will be achieved by industry delivering on the following four strategic imperatives in the period 2006 to 2011:

The Vision 2015

“Our vision is that the Australia processing potato industry will be

sustainable and globally competitive, driven by consumer needs.”

1. Improve consumer demand for Australian processed potatoes

2. Increase industry competitiveness

3. Improve industry communication and information systems

4. Improve leadership and management capability

Our Mission

The Australian processing potato industry delivers innovative products

which are actively sought by consumers.


Strategy to Action

StrategiesStrategic Imperative

4.1 Improve industry management capabilities

4.2 Improve industry leadership and representation

4. Improve leadership and management capability

3.1 Build collaboration within the supply chain

3.2 Deliver industry information requirements

3.3 Encourage the use of improved communication technologies

3. Improve industry communication and information systems

2.1 Use R&D to build better businesses

2.2 Encourage a focus on whole of chain productivity improvement

2.3 Enhance environmental sustainability

2.4 Improve our ability to respond to disease and pest threats

2. Improve industry competitiveness

1.1 Communicate the beneficial attributes of Australian processed potatoes to consumers

1.2 Develop innovative processed potato products

1. Improve consumer demand for Australian processed potatoes

Each strategic imperative is supported by a series of strategies. These are outlined below. Strategic imperatives, strategies and strategic goals are detailed in the following sections of this report.


Section 4

Strategic Imperative #1Increase consumer demand for Australian processed

potatoes

Strategic Outcomes: 1. To expand sustainable domestic and export markets for Australianprocessed potato products

2. To improve the image of processed potatoes with consumers and increase demand



Strategy: 1.1 Communicate the beneficial attributes Australian processed potatoes to consumers

Business Case/Rationale: To facilitate volume and margin growth in the domestic market, an increase in consumer demand is required. Consumer demand for processed potato products has gradually increased to a plateau. This is due in part to changing dietary habits and increased public debate on community health.

Key Assumptions:• Industry communication and marketing programs can change consumer perceptions and beliefs• Communication of health benefits/attributes will improve demand• Australia maintains a “fresh and natural” image with superior product quality• Increased demand will improve the industry sustainability

Significant Risks:• Consumers do not respond to communication and consumption does not increase• Insufficient funds are available to change perceptions• Continuing negative media impact on consumption• Inability to achieve co-operation between supply chain partners

Key Performance Indicators:1. Increasingly positive consumer attitudes and awareness towards Australian processed potatoes2. Increasing processed potato consumption

Strategic Goals:1.1.1 Understand consumer perceptions, needs and uses for Australian processing potatoes to guide marketing and

promotion campaigns1.1.2 Identify the health and nutritional benefits of potato consumption to create positive health messages for potato

consumers1.1.3 Understand consumer perceptions about GM foods and Australian products to ensure that industry has the

knowledge to take advantage of the GM and “fresh and natural” food debates

1.1.4 Develop and implement a comprehensive domestic Processing Potato Marketing and Promotion Plan and ensurepromotional efforts are coordinated with the fresh potato industry

SI #1: Improve consumer demand for Australian processed potatoes


Strategy: 1.2 Develop innovative processed potato productsBusiness Case/Rationale:

To facilitate volume and margin growth in potato markets, an increase in consumer demand is required. New products are one mechanism for increasing consumer demand and growing the market.A significant proportion of the potato crop is wasted and unsuitable to current markets. Finding alternative uses has potential to add significant value to the Australian crop.

Key Assumptions:• Innovation in products will lead to increased demand• Innovation will improve the industry sustainability and lead to higher prices

Significant Risks:• Australia will not allocate appropriate investment to research at both international and national

levels• Australian cost structures are not internationally competitive• New products do not increase demand and will result in increase competition

Key Performance Indicators:1. Increasing processing potato consumption and growth in market volume and value, by sector2. Changing qualitative market image indicators

Strategic Goals:1.2.1 Develop innovative processed potato products to meet consumer needs1.2.2 Develop innovative cultivars that meet supply chain and consumer requirements1.2.3 Develop innovative alternative uses for the entire potato crop, including current industry waste

products

SI #1: Increase consumer demand for Australian processed potatoes

Section 5

Strategic Imperative #2

Improve industry competitiveness

Strategic Outcomes: 1. To underpin the viability of the Australian processing potato industry



Strategy: 2.1 Use R&D to build better businessesBusiness Case/Rationale:

R&D can be used to develop platform technologies to underpin the efficient and productive use of resources while improving the profitability and sustainability of the industry. These technologies may have been developed in the international arena.There is existing R&D that has been poorly adopted by some sectors of industry and also R&D from other industry sectors that is not traditionally applied in agribusiness supply chains. There is a need to review and re-evaluate existing R&D from all sectors.

Key Assumptions:• R&D is able to provide the answers to industry, when required.• Outcomes from R&D will be readily adopted by industry in a timely manner• Industry will have ready access to the technology and/or capabilities.• Research will be targeted to industry needs through industry/research partnerships.

Significant Risks:• Insufficient funding to identify and access appropriate technology accelerators• Resistance to change and an inability to predict changing landscapes and priorities• Over reliance on external providers

Key Performance Indicators:1. Improvements in key industry benchmarks for profitability and sustainability2. Increasing rates of adoption of R&D outcomes

Strategic Goals:2.1.1 Develop an applied R&D Investment Plan that targets improved value chain productivity and

efficiency.2.1.2 Establish linkages and networks to review and evaluate Australian and international R&D and

explore trends that are important for the Australian processing potato industry

SI #2: Improve industry competitiveness


Strategy: 2.2 Encourage a focus on “whole-of-chain” productivity improvement

Business Case/Rationale: The Australian processing potato value chain is competing against other global value chains for market share. Productivity improvement gains are often greatest when viewed across the value chain from paddock to consumer. The industry has a number of growers and supply chain partners that may benefit from the development of commercial alliances, cooperatives and partnerships to increase scale and reliably deliver longer lines of consistent quality product at lower costs. Australian labour costs are significantly higher than our competitors.

Key Assumptions:• Growers and whole of chain partners are willing to engage in collaborative action and benchmarking

analysis and that increasing scale will increase profitability.

Significant Risks:• Ability to achieve cooperation with supply chain partners.• Some businesses will feel increasingly disenfranchised as the technical complexity of production and

marketing increases.

Key Performance Indicators:1. Increasing levels of satisfaction for growers and supply chain partners2. Increasing productivity improvement measures

Strategic Goals:2.2.1 Develop and participate in farm, industry, supply chain and business process benchmarking studies

at national and international levels2.2.2 Encourage the adoption of sound business principles to underpin all transactions and alliances2.2.3 Foster initiatives to develop industry awareness of global competitors, innovation and markets to

keep Australia at the forefront of global competition2.2.4 Develop a policy framework to focus resources on minimising the impact of government and

industry compliance costs on the potato industry



Strategy: 2.3 Enhance environmental sustainabilityBusiness Case/Rationale:

Environmental matters are of rising significance for consumers and governments, particularly in developed economies that are prepared to pay a premium for quality produce. Australia’s “fresh and natural” image will be enhanced by improvements in environmental sustainability.Costs are increasing and limitations on access to water for agricultural purposes are likely to increase.

Key Assumptions:• Environment remains a non-trade concern.• “fresh and natural” image is valued by consumers.

Significant Risks:• Lobbying by environmental activists results in more government regulation.• Duplication of environmental standards and codes across the processing potato industry.• Costs of compliance with environmental sustainability makes the Australian industry

uncompetitive

Key Performance Indicators:1. Increasing levels of grower satisfaction2. Positive consumer attitude to the processing potato industry3. Increasing grower uptake of sustainable management practices

Strategic Goals:2.3.1 Improve water use efficiency by encouraging the adoption of proven technologies2.3.2 Ensure industry policies maintain a “fresh and natural” national image for use in marketing

premium quality Australian products.2.3.3 Develop natural resource management policies for the processing potato industry



Strategy: 2.4 Improve our ability to respond to disease and pest threats

Business Case/Rationale:

Biosecurity measures are critical to reducing the impact of disease and pest incursions that can severely impact the productivity, viability and “fresh and natural” image of Australia’s processing potato industry. Biosecurity controls are expensive to maintain and have the potential to be “traded off” during trade negotiations.

Key Assumptions:

• Biosecurity controls can significantly reduce the risk of pest and disease incursions

• Differing agencies and organisations are prepared to work together

Significant Risks:

• Biosecurity controls are not adequate to prevent a significant disease or pest incursion

• Biosecurity controls are “traded” during trade negotiations.

• States do not cooperate in addressing domestic quarantine issues.

Key Performance Indicators:

1. Reductions in the volume and impact of disease and pest incursions

Strategic Goals:

2.4.1 Focused R&D on building our capacity to respond to disease and pests threats

2.4.2 Develop a Potato Biosecurity Plan that includes comprehensive understanding of the likelihood and financial impact of specific pest and disease incursions

2.4.3 Develop integrated and practical pest and disease management strategies with clear protocols for managing biosecurity issues including existing and exotic pests.


Section 6


Improve industry communication and information systems

Strategic Outcomes:

1. To enhance through-chain communication and decision-making

2. To improve the collection, analysis, management and dissemination of commercially valuable industry information



Strategy: 3.1 Build collaboration within the supply chain

Business Case/Rationale: Improved communication and collaboration across the supply chain is important to identify common issues and priorities that will benefit the entire processing potato industry.

Key Assumptions:• Industry partners are willing and able to communicate

• Collaboration will provide tangible benefits for industry partners

Significant Risks:• Poor communication with some sectors of the supply chain

• Individual organisations will take advantage of “shared information”

Key Performance Indicators:1. Increasing participation at industry organised and sponsored events

2. Increasing satisfaction levels of supply chain

Strategic Goals:3.1.1 Review existing industry collaboration mechanisms and recommend improvements

3.1.2 Establish regular industry forums to facilitate discussion of key issues with the processing potato value chain

3.1.3 Conduct regular industry conferences and symposiums

SI #3: Improve Industry Communication and Information Systems


Strategy: 3.2 Deliver industry information requirementsBusiness Case/Rationale:

Industry must maintain and develop industry communication tools in order to meet information requirements of the supply chain. This is important to keep industry informed of competitive opportunities and to encourage collaborative action, where appropriate. This information must be conveyed concisely and cost effectively.

Key Assumptions:• Information is relevant and practical to the target audience.• Information on global markets and trends will assist industry in making informed decisions

Significant Risks:• Credibility of the information• Information overload by providing too much information• Information is not accessible or provided in a commercially useful form

Key Performance Indicators:1. Increasing grower and supply chain partner satisfaction2. Increasing utilisation levels of available information

Strategic Goals:3.2.1 Update and refine the Processing Potato Industry Communication Plan to improve the effective

dissemination of information to industry3.2.2 Maintain and develop appropriate industry information systems and databases to meet the

identified needs of the value chain3.2.3 Establish services to ensure access to industry information, possibly in association with other

industry sectors



Strategy: 3.3 Encourage the use of improved communications technologies

Business Case/Rationale:

It is important that industry investigates and embraces new technologies to reduce costs and improve communication across the supply chain. Communications and IT technologies are changing rapidly driven by lower costs, improved access and ease-of-use.

Key Assumptions:

• Improved technology is available, accessible and is used to the best of its capacity

Significant Risks:

• Low uptake and acceptance by industry

• Extensive range of available products is confusing and limits uptake


1. Increased stakeholder registration and the use of industry web sites

2. Improved participation rates across the supply chain in industry sponsored events and courses

Strategic Goals:

3.3.1 Develop appropriate training and support services

3.3.2 Establish policy frameworks to actively pursue government for better access and support to new technologies in regional areas

3.3.3 Develop strategic alliances with technology providers to improve access and reduce costs


Section 7


Improve leadership and management capability

Strategic Outcomes: 1. To improve our international competitiveness by improving management, leadership, representation and industry direction.



Strategy: 4.1 Improve industry management capabilitiesBusiness Case/Rationale:

To remain competitive in a global marketplace, the Australian processed potato industry requires skilled managers to initiate, maintain and expand businesses throughout the supply chain.

Key Assumptions:

• The general level of management skills are perceived as low.

• There are existing training and development programs.

Significant Risks:

• The overall level of skills in the industry will not change - only widening the gap between good and poor performers.


1. Improving industry participation in training programs

2. Changing age distribution in industry management structures

Strategic Goals:

4.1.1 Develop education and training programs to improve business skills throughout the processing potato value chain utilising existing resources and programs.

4.1.2 Utilise improving communications technologies to enhance access to education and training programs

4.1.3 Develop case studies of best management practices and communicate to broader industry

4.1.4 Develop formal Industry Management Mentoring Programs

SI #4: Improve leadership and management capability


Strategy: 4.2 Improve industry leadership and representationBusiness Case/Rationale:

There is a need within the processing potato industry to identify and build leadership skills within our industry organisations to champion change and to deliver on the industry vision and mission. Skills and capability across industry are variable. There are a range of industry issues in common with other horticultural and agricultural sectors.

Key Assumptions:• Leaders and potential leaders exist in the industry. • The industry wants and needs leaders - “Change will happen” – industry needs to lead it• Education and training is required to enhance skills

Significant Risks:• Identifying the wrong leaders wastes resources and causes setbacks• Leaders cannot lead a non responsive group• Good leaders will be lost from the industry.

Key Performance Indicators:1. Increasing industry growth and profitability2. Improvements in key industry benchmarks for profitability, growth and sustainability

Strategic Goals:4.2.1 Develop programs to identify new and existing leaders and provide appropriate training and

development4.2.2 Establish formal, Industry Leadership Mentoring Programs4.2.3 Develop strategic policy initiatives with other horticultural industry bodies to address issues of

joint concern

SI #4: Improve leadership and management capability

Section 8

Linkages to VegVision 2020

Strategic Linkages to the Australian Vegetable Industry Strategic Plan



Strategic Linkages to VegVision 2020

Strategy 3.2

Strategy 3.3

V4. Advanced industry data and information systems to meet future needs

Strategy 4.1

Strategy 4.2

Strategy 3.1Strategy 2.1

Strategy 2.2

V3. Internationally competitive Australian vegetable supply chains

Strategy 2.3

Strategy 2.4

Strategy 1.2V2. Market recognition for Australian quality, safety, reliable supply and innovation in products and services

Strategy 1.1V1. Delivering changing consumer preferences and increasing demand

PP4. Improve leadership and management capability

PP3. Improve industry

communication and collaboration

PP2. Improve industry

competitiveness

PP1. Improve consumer demand for Australian processing potatoes

Processing Potato Strategic Imperatives ---�

VegVision 2020 Strategic Imperatives.

In September 2006, the Australian Vegetable Industry Vegetable Group (“AVIDG”) launched the Australian vegetable Industry Strategic Plan – VegVision 2020. The table below presents the Processing Potato Industry Strategies cross matched to the four VegVision 2020 Strategic Imperatives indicating strong linkages to the National Plan.

Appendix A

References, Interviews and Workshop Attendees



9.1 References

The following references have been utilised in the preparation of this strategic plan:

1. Higgins, D. 2005. “Potato Industry Trends in the UK”. Higgins Agriculture Ltd.

2. Harris,D. 2006. “What’s Hot and What’s Not – What Consumers Are Saying”. Market Equity

3. Horticulture Australia Ltd. 2004. “The Australian Horticulture Statistics Handbook 2004 – Potatoes”

4. Supply Chain STO. 2005. “Final Report: Potato Value Chain Analysis – PT05022”. Horticulture Australia Ltd

5. Market Equity Propriety Ltd. February 2005. “Developing a Marketing Strategy for the Australian Potato Industry” Horticulture Australia Ltd.

6. Ausveg. January 2005. “Commodity Spotlight – Potatoes”

7. Supply Chain STO. December 2005. “Final report: Generic Promotion and Category Management Investigation for Fresh Potatoes – PT05029”. Horticulture Australia Ltd

8. PIRSA. December 2005. “State of Play in the South Australian Potato Industry”

9. Peterson, J.R,. Et al. August 2006. “Alternative approaches to the supply of applied research and consultancy services to the Australian potato industries”Horticulture Australia Ltd.

10. Socom Pty Ltd. December 2005.”Potato Industry Communication Strategy”. Horticulture Australia Ltd. Updated January 2006.



9.1 References continued:

The following references have been utilised in the preparation of this strategic plan:

11. Horticulture Australia Ltd. October 2005. “Ensuring a profitable and sustainable agriculture and food sector in Australia” White Paper.

12. Processing Potato R&D Plan – July 2004 to June 2009.

13. Kiri-ganai Research Pty Ltd. November 2005. “The Australian Vegetable Industry: Taking Stock and Setting Directions”. Australian Vegetable Industry Partnership.

14. Hassall & Associates Pty Ltd. September 2005. “The Significance of the Horticulture Industry to the Australian Economy”. Econtech Pty Ltd.

15. McKinna, D. June 2005. “The Australian Vegetable Industry at the Crossroads”presentation. Reference: 0206

16. Horticulture Australia Ltd. June 2005. “Potato Germplasm and Genetics Investigation Brief” Project Number: PT05020.

17. Vegetable Industry Task Force. November 2005. “Report to the Premier and President of the TFGA”.

18. Kiri-ganai Research Pty Ltd. November 2005. “Foundation Projects” Australian Vegetable Industry Partnership.

19. Diversity Arrays Technology Pty Ltd. 2005. “Global Germplasm and Genetics Investigation Report” Project Number: PT05020. Horticulture Australia Ltd.

20. Synovate Pty Ltd. 2006. “Global trends in food and drink”



9.2 Interviews

The following people were interviewed during the preparation of this strategic plan:

• Darryl Lohrey, Philip Beswick, Philip Richardson, Neil Armstrong, David Addison, Andrew and Kevin Langmaid, Ted Forsyt, Micheal Coote, Peter Bettie, Gary Bendotti, Paul Tempra, Frank Rovers, Ken Labbett, John Doyle, Paul Frost, Chris Russell, Graham Ramsay and Allan Smith



9.3 Workshop Attendees

The following people attended industry workshops during the development if this strategic plan:


Workshop #1: 30 August 2006

Stephen Welsh, Dennis Leonard,

Kathy Ophel- Keller, David

Addison, Allan Smith, Darryl

Lohrey, David Antrobus, Garry

O’Neil, Paul Frost, Kan Morthy,

Tony Slater, Euan Laird, Geoff

Moar, Ken Labbett, Leigh Sparrow,

Nigel Crump, John Gallagher, Toni

Davies, Frank Rovers, Callum

Wilson, Phillip Brown, Lisa Maguire

Workshop #2: 11 October 2006

Dinesh D’sa, Derrin Johnson,

Nikhal Tandon, Tom Rafferty, Jim

Overton, Iain Kirkwood, Tony Ford,

Stephen Welsh, Dennis Leonard,

David Addison, Allan Smith, David

Antrobus, Paul Frost, Kan Morthy,

Tony Slater, Euan Laird, Geoff

Moar, Ken Labbett, Nigel Crump,

John Gallagher, Toni Davies, Frank

Rovers, Callum Wilson, Phillip

Brown, Lisa Maguire

061218 Processed Potato Industry Plan - Potatoes … Potato Industry Strategic Plan - 2006 3 Table...

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