Twenty years ago, one of Australia’s biggest dairy foods companies was producing about 35,000 tonnes of cheese per year but was using only 10–15 per cent of the residual whey – mainly as pig feed.
In a world first for the dairy industry, they worked with scientists from the Commonwealth Science and Industrial Research Organization (CSIRO), taking a more data-intensive and scientific approach to commercialising the protein ingredients in the by-product.
It took a lot of work but now Murray Goulburn Cooperative says it uses 90 per cent of the whey in valuable manufactured products such as the billion-dollar sports foods and beverages and meal replacement markets in North America.
“For many processing plants now, the cheese is almost the by-product, says the CSIRO’s Martin Cole.
Cole, director of Food, Nutrition and Bioproducts at the CSIRO, says it’s the kind of transformation that the Australian food and agriculture industry can achieve more widely, especially in positioning Australia’s market as the ’delicatessen of Asia’.
Not only is more protein needed to cater to evolving nutritional requirements for an aging population domestically and internationally, it will also be needed to meet the demands of billions of emerging middle class Asian consumers.
“Health is the key market driver in the food space at the moment, globally,” he says.
The CSIRO’s thinking merges with the work being done by Meat and Livestock Australia (MLA) to take Australia’s high quality beef and lamb products to different markets. It wants, for example, to interrogate customer data to work out how different cuts of meat perform under different cooking methods and palates, to customise both types and quality of cuts for different markets.
And it’s a long way from whether they would prefer steak or chicken.
“You may have cuts of meat that have a higher iron and zinc content that you would differentiate to an aging population, or a different amino acid profile you would target for younger demographics,” says Alex Ball, the MLA’s general manager of Red Meat Innovation.
“If you can provide that information all the way back to the producer, they may decide that rather than chasing a high end ’marbling’ (or quality cut) score in a particular Japanese market, that their production system may suit a Chinese ’healthy aging’ market,” he said. “That will be influenced by the type of cattle, area farmed, grazing availability, a whole lot of factors.”
“You may target a brand into a particular sector that services aged homes, hospitals or prisons, for example. It need not go on a shelf.”
Australian producers worked out some time ago that Australia could never hope to be the food bowl of China – due to both scale and cost of production. Even if Australia quadrupled its annual production (from its current capacity to feed 60 million people), it would be just a drop in the bucket for Asian food demand in coming decades.
Ideally, the country would be able to take advantage of its position as a big exporter to target high end markets. But most of the value of Australian food exports is still captured offshore – less than 1 per cent is elaborately processed, with most processed only enough to be stabilised for transport. Currently, most Australian beef and lamb goes offshore frozen or in live exports.
Level of processing in Australian food exports
Elaborately processed foodstuffs remain around 1 per cent of total food exports.
Yet another issue is what CSIRO calls the ’innovation dilemma,’ which is reflected in the way that Australia ranks 10th in terms of its research and development investment on the global innovation index, but only 81st in its ability to translate that commercially.
CSIRO CEO Larry Marshall, who was schooled in Silicon Valley, said in a recent speech:
“Australia is entering a unique time when billions of well informed and discerning customers want our high quality food products and are willing to pay well for them. Innovation thrives when customers focus on quality not price and this is where Australia performs best. The agrifood industry can become a shining example of Australia exporting unique end products rather than just raw materials.”
Meat and Livestock Australia says its producers and systems lead the world in many areas of industry innovation, and it’s looking at new packaging technology to increase shelf life. It points to its Meat Standards Australia index as a major innovation, delivering a grading system that assesses color, marbling, fat depth, carcass weight, maturity and ultimate pH. So too its sophisticated animal identification system that can ’capture’ the whole life story around the animal’ which means Australia is not at risk of losing entire herds as the United Kingdom did in the 2012 mad cow disease outbreak.
“In a sense that is a food security capability because it means the product is not being wasted and that it is heading to the destination where it will be most valued,” says MLA’s General Manager of Value Chain Innovation, Christine Pitt. “That means good economic returns and industry more sustainable in the long-term, as well as making sure customers are more satisfied,” she said.
Australian food and live animal exports
But the MLA warns of a looming information “bottleneck” which is going to create more confusion, more complexity and more complication for the average livestock producer to deal with until issues around interoperability, storage and ownership are resolved.
China, for example, looks like a ’market made in heaven’ for Australia, but as well as huge demand, there is huge competition and a huge array of consumer data, but not a lot about how food value chains actually work there nor the guarantee that the data is reliable.
Pitt says that’s where she’ll be turning to Thomson Reuters, such as with targeting the aging population. “(We’ll be asking) what are the values or products and how do we get it in a form that’s going to meet that emerging market section: turning data into actionable themes.”
That, she says, will require all players along the value chain to share their information so that the “whole becomes more than the sum of the parts”. That raises challenges about getting different data streams to ’talk’ in the same language and issues of ownership, she said.
“It’s like the old adage that ’a picture tells a thousand words’,” says Andrew O’Brien, Thomson Reuters Australasia senior regional sales manager.
“How do you grab all that information and present it in a visually compelling way to drive novel insights. That’s where big data is really designed to avoid that bottleneck.”
Lucinda Corrigan has no doubts about the value of on-farm data at Rennylea, the beef genetics business her family runs on rich farming country in New South Wales that she describes as “3,500 head of cattle but actually tens of thousands of pieces of data”.
Putting that data to work over the past 15 years has boosted Rennylea’s quality performance from average to top 5 per cent of the Angus breed, for both grain and grass fed, and doubled the value of a carcass through the supply chain.
It’s a huge logistical task to manage, with 50,000 data points generating information on each bull and Corrigan has recently returned from a U.S. conference where high-capacity high-speed storage systems used in gaming and finance are being touted as better management tools.
Corrigan says Australia has fantastic on-farm data systems, for electronic livestock identification, genetic improvement, and more, including the MSA standards “which give us the science that has transformed eating quality for the consumer”.
But she says breeders have difficulty in translating consumer eating experience into improved genetic selection because the systems “don’t talk to each other”.
Their vision is for a ‘big data’ platform where data transfer on individual animals is seamless through the supply chain to the consumer so that, at birth, each animal will have a “preferred pathway” to market. Currently, she says, this is done in small supply chains with small, niche brands, where retained ownership enables whole of cradle-to-grave traceability, but it needs new technology and processes to be possible through the larger, high throughput systems.
“That’s when big data will really deliver for us,” she said.