“It might be said”

The Australian food industry: (Sectors of the AFI)

The Australian food industries consist of 4 sectors;

- Agriculture and Fisheries- Food processing and manufacture - Food service and catering- Food retail

Meanings:

The agriculture and fisheries; sector is where all the raw ingredients for food products are grown and harvested for example wheat from a farm or eggs from a farm.

The food processing and manufacturing; sector is where the raw foods get processed. This can be referred to ‘value adding’. Value adding increases profit. For example wheat grains can be processed into flour and flour can be processed into bed, or milk and cream can be processed into ice cream. Examples of companies involved in the food processing and manufacture include Cadbury, Arnott’s, and Sara lee.

The food service and catering; sector is where food is prepared and served to consumers. It includes cafes, restaurants, hospital canteens, airline catering companies etc. Examples of companies involved in food in food service and catering include McDonalds, nandos.

The food retail; sector is where the processed food products are sold to consumers. These companies involved in the food retail sector are really expensive, (any businesses that sells processed food products.), these include 7-elevens, petrol stations, cinema candy bars and other larger retail outlets such as Coles and Woolworths.

Catering:

Is commercial food production

Agriculture:

Is the cultivation of land to produce food and fibre

Agri- food chain:

Is the production and supply of food for the consumer

Consumer:

Is someone who buys goods and services

Fisheries:

Is the cultivation of different marine pieces for commercial or scientific

Manufactured foods:

Are processing raw materials into processed foods such as milk and cream that is processed into ice cream.

The Australian Food industry involves:

StorageOrganised productionProcessingMarketing of food production

“Organic farming”

Organic farming is when farmers grow food without using artificial chemicals such as pesticides and artificial fertilisers

“Food knowledge”

Is a processing and protecting technique with similar results to freezing or cleaning. During this procedure, food is exposed to a lot of ironing energy or radiation

At low doses, irradiation extends a product life. At high doses, this process kills insects, moulds, bacteria and other harmful micro- organisms.

‘Modern farming’ methods includes using too much chemicals, because of that, it has led to a decline in soil fertility and an increase in noticeable blue-green algae in water ways

For over many years ‘Organic farmers have tried to minimise the damages to the environment by using physical weed to control animals and green manure

Salinity is when it increases in salt in he soil, which can be caused by over fertilising. Increased salt in the soil means that you cant grow the soil.

Types of ‘produce’ available in Australia:

Vegetables

Egg

Fruit

Dairy foods

Processed foods

Soil health is very important to the Organic farmer

Organic foods have higher levels of vitamin C and minerals such as selenium

GM Food means that individual genes with specific traits are transferred from one organism to another

Animals are raised using Organic methods, the animals are treated humanely with respect for example “Live stocks” are allowed outside, and have a choice to go inside.

Animals are not fed any growth-regulated drugs, steroids or any anti bio tics, however animals are treated with vaccines to prevent diseases

Impact of food industry on society:

The food industry uses fossil fuels

Supermarkets like Coles, Woolworths have a lot of control, they control 74% of the national grocery sales

The food industry has poisonous waste, which pollutes water and ecosystems

Impact of food industry on Environment:

Using chemical on the environment

Land clearing (increases erosion, removes habitats)

Half of our soil needs some treatment to overcome salinity and infertility

Acidification of soil (once the land is cleared, water and salt rise to the surface and this reduces fertility

The food standards code:

Has a set of rules and regulations, which have been created by food standards, Australia and New Zealand (FZANZ)

All food business organisations must follow; labelling use by dates. If a bread company is making a new loaf of bread then they have to read the guild lines to see what to put on the label

The NSW food authority

The NSW food authority is the government organisation that enforces I or makes sure all food related business follow the standards code

Food act 2003 is the most important legal

All business MUST follow “The food standard code”

The food act:

Have rules for what’s allowed in different classes of foods so if a bread company is making a new leaf of bread it must check the guild lines to see what it can put in the bread

They have all the rules about food safety and hygiene

They have all the rules for ‘primary procedures’ (formers), so if a company is producing meat or seafood, it better check the food act guidelines

The NSW food authority:

Check the hygiene of food handlers

Issue improvement notices if they find a problem

Look for evidence of post

Check the environment hygiene to check if it is clean and utensils clean.

They Have food inspectors;

Called the environment health officers,

They have the power to inspect food premises at any time

They investigate food complaints

They can take food samples and send them to the Hals for testing bacteria levels

They check fridge temperatures, to make sure they are correct.

Raw materials

To achieve its aim and produce good food, a food manufacturing company has to do the following:

Purchase good quality raw materials

Process the raw materials in a well-organised plant (factory), with hygiene equipment

Follow good manufacturing practises

All raw materials are processed in one way or another. For example flour, sugar, salt, meat, margarine and even eggs have maintained some type of processing before being delivered in size to the food manufacturer

A raw material is a product that is used in the manufacture to process goods, the raw materials that are used in food processing include:

Raw ingredients such as fruit and veggies

Processing materials such as steam and water

Food additives such as colours and flavours

Packaging materials such as cans, bottles, fire board

Quality control of raw materials

Food manufactures spend a lot of money on buying good quality raw materials.

Manufactures do a lot of research on finding a company with a good reputation who can supply the best raw ingredients and the right quantities

The raw materials must be free of contaminants which is pollution

Raw materials must meet the criteria for specific characteristic that is needed by the manufacture, which is called “Raw material specifications” for example size, colour, level of moisture, presence of a specific nutritional factor

Before a raw material is accepted to the food-manufacturing site, it has to be tested and confirmed. The tests are called quality control, which is done by quality control techniques.

Large food manufacturing companies have their own quality control laboratories but smaller companies rely on the manufacture to carry out the test and provide documentation with the delivery

Poor quality raw material could mean spoilage and rejection of a complete production run. A production run is the process of taking raw materials and making them into finished products

When a raw material does not meet the specifications of a company, they are sent back to the supplier

Setting up a raw material specifications

Quality control laboratories develop a separate list of all the raw materials for each food production line. The following information is prepared for each raw material

1. A description of the raw material;

- Size

- Shape

- Physical characteristics

2. A sampling method for the material;

This method should specific the exact number of samples to be treated to give the best quality, assurance at minimum cost

3. A test for each specified characteristic

There is no value with specifying a characteristic, unless it can be tested

4. The action to be taken when the test have produced a result

The manufacturer can do one of these 3 things with the results of a test.

a) Accept the raw material if it is in the set standardsb) Restrict the raw materials if it does not follow with the

standards

Overview summary

Questions to be answered;

State what a raw material is

A raw material is a product used in the manufacture of another product/processed goods. Raw materials can be product ingredients such as fruit and veggies, processing materials like steam, food additives plus packaging materials

When a quality control laboratory is setting up raw material’s specifications, list and explain four things they need to do

1. A description of the raw material2. A sampling method3. A test for each characteristics 4. Action is needed to be taken when it results to them

Explain why is it so important for food manufactures to have good quality raw materials delivered to their factory

To produce the best products, food manufactures must select the best raw materials to which are expensive as to they are high in quality

What possible problems could happen if a food manufacture accepts a raw material that does not meet their Expectations?

Poor quality raw materials could mean spoilage or rejection of a total production run or soggy or out of date

Explain why smaller food manufactures would need to rely on the supplier of the raw material to conduct their quality control test

Small food manufactures don’t have the finances to support the staff to do internal raw material testing

Imagine you are a food manufacturer of fish fingers;

What are the raw materials you would need to make your fish fingers?

Fish flour

Bread crumps oil

Eggs package

Raw materials Types of test needed

Flour Aroma, use by date

Oil Colour, flavour, use by date

Fish Colour, flavour, texture, aroma,

Bread crumps Size, texture, aroma, use by dates, moisture level

Package Strength of the package, Durability

A company is mass- producing a pasta sauce using the following raw materials; tomatoes, water and preservatives

The item that is essential for the raw materials that can be used in the production for tomatoes, water and preservatives are glass jars

Additives

Food additives are substances that are added to foods but are not normally consumed by it self, Food additives are used in processed foods in small quantities

Food additives are used to enhance and provide the consumer with flavour, colour, taste, appearance etc. for example preserving chips with salt, vinegar, and oil

The advantage of food additives is that it allowed food manufactures to make large quantities of food all year around

The Disadvantage of food additives is that it has caused many health problems to a lot of people such as allergies or food intolerance

Additives and consumer safety

The food standards Australia New Zealand (FZANZ) controls the use of additives that are sold in Australia and New Zealand

The FZANZ has a list of approved additives that can be included in foods that are sold locally produced or imported

If a manufacture wants to use alternative substances, they have to tell the FZANZ for approval

If additives are used, they must be included on the product label. The listing of long names on the foods labels needs a lot of space

Ever since 1986, additives in Australia have been identified by their class name by an individual name or code number, for example food manufactures cant put a red colour in a food and call

it ‘colour’ on the label, they have to tell the consumer what type of colour it is so that the consumer can be able to consume it or not

The uses of food additives

The use of additives is an really important topic, regardless of the modern day association food additives, food additives have been used for centuries. Food preservation started when man learned to safe guard food from on harvest to the nest by salting and smoking the meat and fish, for example the Egyptians used coloured and flavourings, the roman used spices and colours for preservation and to improve the appearance of food

As a result the main uses of food additives is to give the consumer something such as chips that has flavour, texture, appearance, colour

The four main reasons for using additives in foods are

Is to provide nutrition

Is to maintain product quality and freshness

Is to aid in the processing and preparation of foods

Is to make the foods appealing

Do you think the food additives code numbering is a good idea? What are some of the advantages and disadvantages of the system?

If food additives are used, they must be stated on the label. The listing of long names needs a lot of space so the numbering system was developed

The advantage of food additives is that people who have allergies, can be aware of the system

List the classes of additives that are more likely to produce a reaction or side effect and give examples of what that reaction can be:

(PCF):

Preservatives, colour, flavours Preservatives:

Behavioural disturbances

Colours:

Behavioural disturbances

Flavour enhances:

Long list of reactions, asthma

Levels of production

Food manufacturing is the processing of food that is for sale.

All food manufactures process and package foods so that it can be safely consumer days/months/or years later.

Organisations differ in scale of production and extent to which their systems are mechanical and computerized

The food processing has been one of the slowest industries to have computerized systems due to cost/expensive cost

Processing equipment

Food manufacturing equipment differ in size and shape which depends on the amount of food produced

The equipment that is used in manufacturing plants (factories) complete the same tasks as appliances and utensils in a domestic (household) but on a larger scale. The design of the equipment needs to be stronger to so that it can work constantly with large quantities

Durable – reliability is very important so that production is not held up by break ages

Hygienic – easily cleaned

Efficient –

Many industrial machines are computerized with conveyors transporting the product from one set of processing equipment to the next.

When industrial equipment operates 24 hours per day, it needs to be energy efficient. Gas is primarily used as a heating source and is both efficient and cost effective

Food technologist

The food technologist is responsible to make sure that the food production runs smoothly and safely to the standard required. Its job is to research, develop and oversee the production of a range of food products.

Food technologist needs to know technical and practical skills and have knowledge about food biology and food chemistry and use this knowledge to develop or improve the processing, materials, and technologies that go’s into the foods and drinks. Equipment is designed or modified to complete production processes called unit operations

Unit operations

A unit operation is a basic step in process. Unit operations involve physical change or chemical transformation such as separation, evaporation, ect

Unit operations are specific processes that the food undergoes during production for example heating, mixing and transportation

Internal (in) transport of raw materials

When handling raw materials, it the first important unit operation to be performed in a food processing plant (factory)

Small food companies have raw materials that are delivered In portion size containers then are transported Large companies collect their raw materials in large quantities such as a tank of flour

Separation processes

Separation includes;

Physical separation of the components of food for example removing the skin from an orange

Chemical separation of components in foods

The processes used for separating foods in manufacturing are mainly to do with physical separation, which includes sieving, filtration and centrifuging

Sieving

Is when you shake loose solids through a mesh allowing the particles of the right size, while obtaining larger particles.

Sieving is used to separate large particles from suspensions, suspensions usually involving solid materials

A sieve is a utensil that is a mesh put over a frame. An example of a sieve is a tea strainer, which is used to separate tea, leaves from water

For example;

Flour is sieved after milling to separate the white flour from the bran. powders are sieved for the production of processes to make sure that all the ingredients are evenly distributed

Filtration

Is the process of passing liquid through a filter to remove any solid particles. Filtering systems are used to separate cheese curd from

water in the manufacturing of cheese, and microbial air filters are used in dryer in the production of powdered products such as milk Centrifuge

Is based on the principal that if a liquid that contains partials of different densities is put on a rotating bow, the heavier the particle will move the outside of the bowl.

Centrifugation is sometimes used in the food industry, particularly in the separation of cream, whole milk and the removal of pulp juice

Size reduction processes

The basic purpose of chopping, grinding, or milling any raw material is to reduce its size. A reduction in size can be necessary for different of reasons for example;

To make the raw material easier to handle for example grinding salt to a fire powder so it can be mixed more easily into food products

To make a new product for example making flour from wheat, or ground sausage mince from steak

To decrease the size of the raw material to make it more suitable

- A machine that crushes raw materials between rollers or rotating places is called a mill.

The style of a mill depends on the characteristics of the raw material, the characteristics desired of the milled product and the size of the batch being processed.

Separation processes such as sieving can also be used to separate large particles that are not needed in the finished food product

Milling flour

The milling of flour occurs on an industrial or large-scale level, the machine is totally computerized with quality control test completed

online. These mills run 24 hours per day, 7 days per week and mill thousands of kilos wheat every day. The products produced from the milling process include flour, bran and pollard

Mixing

Is a process that makes sure that all the ingredients are evenly distributed throughout a batch product.

Mixers vary from highly computerized systems in places such as bakeries to manually operate mixers in the food laboratory

The type of mixers that are used depends on the size of the baton and the material being mixed

Heating

Heating can be transferred to food in 3 different ways:

1. Conduction; food is heated or cooled by direct contact with a hot or cold surface

2. Convection; food is heated or cooled by the movement of liquids or gases around the food

3. Radiation; a heat source directly above the food heats the food without touching it

When heating a food product using steam, it is the most frequently occurring process in the food production plant.

Blanching

Blanching is used for low intensity heat transfer methods for example equipment such as blanching tanks are used for cutting or freezing vegetables.

The vegetables are blasted with steam or passed through hot water at 88-100c to destroy the surface enzymes in order to prevent enzymatic browning which can happen during storage

The advantage of using steam is that it is highly effective in destroying enzymes and does not add any unnecessary level of water to the product prior to freezing

HTST (High, temperature, short time)

HTST is a process where food is heated to a high temperature in order to destroy pathogenic bacteria for example in the pasteurisation of milk.

Heat exchanges let liquid foods to reach high temperature in seconds, which reduces processing times and minimising the impact of exposure to ingredients of heat

Two of the most commonly used heat exchange includes the tubular heat exchanger and the plate heat exchanger.

In a tubular heat exchanger the hot water or steam flows through the outer jacket, with the liquid products flows through the inside tube

A plate heat exchanger can be used for pasteurisation

Instant coffee can be used for processing when manufacturing a product

Canning

Canning involves preserving food in metal containers, while bottling involves the use of glass or plastic containers

The process for both is the same; Canning is a heat process, which sterilises the food in the package giving it a shelf life of movement than 2 years

Traditional canning methods use equipment called retorts to heat the sealed packages

Static retorts are both used commercially and domestically (for home and bottling). The cans and bottles are filled and sealed, then put in a vat (called a retort) of boiling water

Evaporation:

Evaporation in food processing is used to concentrate or increase the solids concentration of a liquid

Evaporation involves the changing of the liquid in foods to steam or vapour

4 basic components are need for evaporation

An evaporation vessel

A heat source

A condenser, which converts steam to water

A method of removing the vapour

An evaporator is used in the production of concentrated fruit juices, in the conversion of tomato juice into tomato paste

Cooling processes

Chilling:

Cooling is the reduction of temperature of a product. It is used to slow down or stop the activity of microorganism and enzymes and therefore spoilage of food.

Products can be cooled by using heat exchanger in which the steam is replaced by chilled water or other cooling liquids known as refrigerants

Other common cooling equipment can include refrigerators. Refrigerators lower the temperature of the product during processing and storage

Cooling systems are commonly used in confection stores and manufactures and in fruit and vegetable cold storage warehouses

Freezing

When freezing food, the rate of freezing determines the size of ice crystals being formed. The slower the time in the freezing, the larger the ice crystals are formed.

The 4 categories of freezing equipment for food products include;

Air blast freezers

Plate freezers

Tunnel freezers

Immersions freezers

Air blast freezers

Air blast freezers are freezing systems that use cold air at high velocities. The design of the freezer depends n the type, size and density of the product being frozen

Air blast freezing is used on small volume batch products such as meat, frozen meals and cakes

Blast freezing is an extremely fast freezing process

Plate freezing

Plates freezing are used to freeze flat products such as pastries, fish, and fillets e t.

Tunnel freezing

Tunnel freezing is a constant/continues operation for quick freezing on a production line.

Immersion freezing

Immersion freezing involves bringing product into direct contact with low temperature refrigerant such as liquid nitrogen, which is so low at (-196c)

Immersion freezing is a freezing method of commercially preparing frozen foods so that they stay fresh and good for a o=long period of time

Dehydration

Dehydration has a direct effect on the final volume of the food, providing both the consumer and the food manufacture a product that is convenient to use.

Dehydration reduces the moisture of the product to a level that limits microbiological growth or another reaction. The moisture is removed by heating the product. The type of dryer that is used depends on the characteristics of the product being dried, the size of the batch and the characteristic desired in the finished product for marketing for example sun dried or semi dried

All foods must be in best condition before drying or their colour and flavour will be crooked

Cabinet drying involves placing foods such as herbs, fruits, and vegetables on wooden trays into an confined space where hot air is circulated. The process is slow and the food remains stationary.

Drying food in a domestic oven is an example of cabinet drying

Tunnel dryers; are used in automated production lines. Tunnel drying is used for fruits, veggies, and meats

2 other methods of drying are spray drying and freeze-drying.

Spray drying is a technique in which the product that is being dried, it must be in the form of a liquid

Freeze-drying

Is more expensive than most other drying techniques because it’s carried out in 2 different states

In the first state, food is frozen normal in fast freezing techniques. In the second state, the food is raised under low pressure. This causes the ice to sublime.

Freeze drying has a number of advantages; food is lighter and easier to transport and doesn’t need cold storage. Freeze drying has advantages of maintain the texture of the food

Freeze drying products can include, coffees, teas, herbs, meat, vegetables

Questions to be answered;

List the unit operations that can be performed on solid and liquid foods

SOLID FOODS LIQUID FOODS

Separation example bran from wheat

Mixing for example cream and other ingredients for ice-cream

Reduction example grind Heating

Wheat to flour Freezing

Heating Cooling

Packaging

Name 3 products, which use heat exchangers as part of their processing

Tubular heat exchanger; chutneys and sauces

Plate heat exchangers; milk, beer, fruit, juice

Heat exchangers allow liquid foods to reach high temperatures in seconds

What types of food is evaporation used for?

Evaporation concentrates solids in liquid foods; the temperature is raised until it boils in which until the desired concentration is reached, for example concentrated fruit juice, tomato juice which can be turned into tomato paste

Outline the types of cooling systems used. What is the purpose of cooling a product?

Compare the advantages and disadvantages of different methods of dehydration

Why would a tubular heat exchanger be used in the production of ice cream?

Tubular heat exchanger would be suitable as you can use a heat exchanger to cool a product quickly by replacing the steam with chilled water or a refrigerant. The liquid ice cream would flow through the centre

Describe the advantages of fast freezing methods over slow freezing methods?

The advantages is that it would have larger ice crystals and the texture would be gritty

Factors affecting food product development

1. External factors; Macro- environment

Economic environment

Political environment

Ecological environment

Technological environment

2. Internal factors- Micro environment

Personal expertise

Production facilities

Financial positives

Company image

Promotions

Promotion is a marketing strategy, which is used to inform and encourage consumers to buy a product

Main methods used in promotion include:

Personal selling

Advertising

Sales promotion

Publicity

Public relations

Below the line promotions

Personal sales is when sales representatives use face to face selling

Advertising includes mass communication methods such as tv, internet, and radio

Sales promotion includes trade shows, trade displays and samples

Publicity involves using media for news about businesses. It’s a free method for advertising

Public relations includes sponsorships of annual reports to promote a business

Below the line promotions is a style of promotion designed by the business it self without paying an external advertising agency

A promotional mix uses methods;

Educate and informImprove brand loyaltyChange customer’s opinions and behavioursAttract attention to a business

A communication channel is used to convey promotional messages for example print and electric media

Communication process can be marred by:

JargonMisinterpretationFlawed printingOverlapping verbal conservationsInappropriate language or images Is wheFeedback on marketing communication is essential to determine its effectiveness. Feedback can be in the form of increased sales, surveys or point

In marketing, opinion leaders or influential people can have an impact on others purchases, as their opinions are valued, they are key to improving a product sales such as actors, athletes and models

Price structure

Price is an integral factor in food marketing which affects demand for a product or service

Consumers react strongly/sad when prices go high

The key pricing methods are:

Cost plus marginMarket priceCompetition based

Cost-plus margin is when a percentage is added to the cost price of a product

Market price is set to the equilibrium between demand and supply

Competition based is when price set either above or below competitors

The key factors that have to be considered in pricing a product include:

Price must cover cost unless discounting is used to establish marker share

Price must be comparable to competitors

Prices must not breach competition and consumer laws such as price fixing, loss leaders and deceptive pricing

Other pricing strategies include:

Market skimmingMarket penetrationLoss leaderPrestige pricing

Market penetration involves low prices, which are set to break into a market

Market skimming involves high prices, which are set to achieve profits while interest in the product is high

Loss leader is when a business sells a product low to attract customers to buy the product and other products

Prestige pricing is a product, which is priced high to give the impression of quality to encourage consumers who are pursuing status

Types of discounts include:

Cash discountsQuality discountsPromotional discountsTrade discounts

Product planning

Main features of the ‘product’ aspect of the marketing mix includes:

Product lineProduct mixBrandsPackagingAfter sales serviceUse by datesPositioning

Those aspects of a product let marketers to demonstrate the benefits of a food product

Determining the product line for marketers involves differentiating a product so that it can be sold in different market segments

A product mix involves the sale of a range of different products

Brands are a distinguishing feature, which has the effect of:

Visual impactLegal status Demonstrating good qualities of a product

Branding can be categorised into many sub classification such as

Manufactures brandsNational brands (regonsised across a nation)House brands (owned by a retailer or wholesaler)Generic brands which are not brand names for example no frills

Positioning relates to how the customers see the product in relation to other similar products on the market

A position on the market will:

Attract a target marketState the benefits of the product

Packaging relates to the products container, presentation and wrappings

Packaging:

Protects the productKeeps the product freshPromotes the productDisplays information, ingredients, warnings ect

Warranty:

A warranty adds value to a product

Warranties are promises that a faulty good will be replaced or repaired in a certain time from the purchase date

After sale service offers similar value to customers as it is in assurance breakdowns and faults

Marketing mix

Marketing mix involves making decisions about the how, when, where, what and what price should a product or service be marked

The 4 p’s includes:

ProductPromotionPlacePrice

Market research

What is the purpose of market research?

To determine whether there is a demand for a product or service

To determine the target market for a product/service

To match consumer needs with a product/service

Determining information needs informational needs of business, which are determined prior to beginning market research and it is essential that is done prior to data collection

Data collection collects via primary and secondary collection techniques

Primary research are things that are collected from original sources such as observations, questionnaires and experiments

Primary research includes:

InterviewsSurveysQuestionnaires Focus groups Observations Laboratory experiments Personal observations

Secondary research are things that are already been collected and collated

Secondary research is data that internally and externally exist and a business such as:

Sales reportsABS statisticsAnnual reports Internet informationMagazine articlesResearch reportsGovernment report

Data analysis is a process of analysing market research, Such as diagrams and tables

Interpretation is data that is interpreted by the reader to facilitate understanding

Steps in food product development

1. Idea generation and screening2. Market research3. Product specifications4. Feasibility study5. Production process and development6. Develop a prototype 7. Test the prototype

Planning

Coordination of the business involves planning

Planning involves:

Thinking through all business decisionsEstablishing long term/short term goalsObtaining resources

Planning should be on:

PaperOn going

Strategic plans involves developing a long term action plan e.g. interest rate movements, governments policy changes

Tactical plans involves dealing with specifics identified in the strategic plan

Tactical plans are short term in nature

Operational plans in cooperate strategies about how to implement the strategic and tactical plans

Operational plans are often daily in nature and are responsible for low levels of management

Controlling involves the supervision of the implementation of the plans in a food business environment

Types of food product development include

Me too’sNew to the worldLine extension

Types of food product development:

Inventions is a brand new creation not seen in the market yet

Innovations are existing products that are alerted in some way to create a new product

Line extensions add a change to a range of existing products such as flavours, sizes and features

Me too products are copies of existing products which are produced by another business, to avoid legal issues, the product is changed slightly for example its size and shape before it enters the market

New to the world products are original products on the market. The style can be such an original ingredient that has been developed.

Business goals

Business goals are generally classified into 2 categories

Financial and qualitative

Some financial goals include:

Making a profitRepay loansIncrease market share and sales revenueLong-term survival in the market

Some qualitative goals include:

Providing employmentPrevent social cost eg pollution

Vision, mission and goals

Before planning commences, food business owners must have a vision of their future business

Often the vision is:

Focused on the owners personal objectives

Lacking in financial details and precision

A vision statement will broadly outline the business owners plans for the future directions of the firm

Mission statement

Mission statements detail broad aims, objectives and future directions of a business

Business goals:

Business goals are broadly classified into 3 main areas:

Financial goals

Social goals

Personal goals

Financial goals aim to keep a business in the ‘black’ and to be constantly seeking rising profits. Specific financial goals include:

Increasing profits

Improving shareholder income

Improving returns for investors

Sales growth target

Improving market share

Social goals are community-focussed aims, which also seek to improve a business reputation. Some social goals an include:

Environmental protection

Provision of employment

Sponsorship of individuals

Improving the health of the community

Proving an example to other business

Personal goals impact directly on the operations of a business. The personal goals of a business owner may include:

I want less stress

I want a better lifestyle

I want to be my own boss

I want to create employment for my family

External factors include

Technological environment

Economic environment

Political environment

Ecological environment

Internal factors include;

Personal expertise

Production facilities

Financial position

Company image

Economic environment

Economic factors can include

UnemploymentIncome levelsInflationExchange ratesInterest ratesTax policyBusiness cycle

The Australian company like every other economy experiences economic cycles

During economic cycles, there will be fluctuations in inflation, unemployment, interest rates, tax collections and income levels

During economic fluctuations, the food industry will experience growth slowdowns, peaks and trough

Some business survive while others fail

Political factors

There are many external factors which effect food product development

The key political factors include

Government controls/policy

Government legislative changes

Political changes regarding prices, environmental protection, education and working influences

Community influences

Lobby groups

Any changes that are proposed by the food manufactures need to be approved by the federal food standards Australia and new Zealand before they can enter the consumer market

Other federal and state influences can include

Protection of Australian food businesses

Tax deductions for businesses

Local governments can influence food product development via their zoning laws

Environmental laws can impact on business decisions regarding waste management

Ecological environment

There are many external factors which effect food product development

They key ecological factors include;

How Australia uses its natural resources

Green decision-making

Framing methods

Waste management

Ecological sustainability

Australia is renowned for its environmental protection reputation in the global food market. Changes in environment however can help or arm this reputation

Food business must make sure that they evaluate the impacts of

Waste

Pesticide use

Land degradation

Overcropping

Recycling

Packaging decisions

Technological environment

There are many external factors which affect food product development

They key technological factors include:

Cost of new and emerging technology

Improved production and productivity

Emerging technology in the food industry has impacted on:

Business cost because the cost of technology can be large

The skills needed by employees in a more computerised production environment

Research and development processes

New processing methods such s UHT

Personal expertise

There are many internal factors, which affect food product development

The personal in the food industry includes all staff working in

Production

Manufacturing

Product development

Marketing

Management

They key personal; expertise factors are:

Skill levels

Skill portability and transfer

Education and training

Workplace flexibility

In modern workplaces there are plethora’s of skills that are required by employees including:

Decision making

Organisation and planning

Communication

Production staff are professionals who work on a production lime on a manufacturing environment and perform a variety of duties to make sure that production goals are met for an organization

Quality assurance staff: in developing products and services, quality assurance is any systematic process of checking to se whether a product or service that is being developed is meeting specified requirements

Maintenance involves repairing

Manufacturing involves making something using large machinery

Marketing is communicating the value of a product, service or brand to customers for the purpose of promoting or selling a product service or brand such as advertisements

Managers set goals for a group and decides what work that needs to be done and organizes

Production facilities

There are many internal factors, which affect food product development

Production decisions related to the movement of raw materials through a process which culminates in a final product

They key production facility factors are:

Storage

Distribution

Production processes

Some production process include:

Mass production

Batch production

One off production

Continuous productions are used by large corporations in which employees work in shifts

Mass production:

There’s little custom made product

A production line system is used and employees are highly skilled in an aspect of assembly

Batch production are batches which are smaller quantities of a product which are produced at one any time

Batch production allows food products to be produced which are a different size, shape or have different ingredients

One off production is often referred to a s custom made products and a food product is produced according to the specific requirements of the customer such as wedding cakes

Financial position

There are numerous internal factors which affect food product development

They key financial factors include:

Business and financial stability

Investment potential

Market share

Degree of competition

Break even analysis A SWOT analysis can sometimes indicate the business position regarding a variety of areas

A SWOT analysis examines

Strengths (internal factors)

Weakness(internal factors)

Opportunities (external factors)

Threats (external factors)

A situational analysis

In order to plan where a food business is headed, the managers must know where it currently is situated

A situational analysis examines a business internal and external

environments through a SWOT analysis

The internal environments strengths and weakness and examined such

Finances

Employees

Reputation

Use of technology

Management

Pricing policy

The external environment opportunities and threats are also examined such as its

Market

CompetitorsGovernment controls and polices

Situational analysis

Internal business environment management have control of

Marketing

Administration

Physical resources

Employee relations

External business environment management lacks control of

Politics

Legal changes

Social changes

The economy

Technological change

Global influences

SWOT analysis

Strengths:

Internal focus

Strong competitive advantage

Employees, management, pricing, product/service

Reputation and technology

Threats:

External focus

Potential negative effects for a business

Competitors may/can begin to dominate a market

Opportunities:

External focus

Need to be “beat” the competition

Should be exploited for positive outcomes

Observation of government policy, law and regulation

Company image

Affecting company image:

Is the product Australian made?

Is the product branded?

Product, size, shape, and appearance

Has their been any consumer feedback

Is the product new or established?

There are many numerous factors which affect food product development

They key company image factors include:

Business reputation

Product quality

Marketing methods

Packaging choices

Pricing strategies

They key company image can adversely or positively affect business performance and survival in a modern competitive market

An image, ones established must be protected because once damaged it is very difficult to re establish such as due to food poising scares

A business reputation sometimes has real value attached to it and a price can be attached to a business name

Drivers of development

Market concerns

Consumer demands

Social changes

Environmental concerns

Company profits

Drivers of development

There are many factors, which drive product development in the food industry. These include:

Market concerns for health, safety, dietary, consideration and the environment

Consumer demands such as convenience foods and cost

Technological developments such as processing equipment and packaging material

Marketing can be:

Mass marketing

Target marketing

Niche marketing

When food producers become more aware of the need and wants of their consumers, they can design a marketing approach, which is:

Concentrated

Differentiated

Niche oriented

Products are development to cater the changing trends and demographics of the Australian population

Identifying the target market

A mass market is the whole consuming market available to a food business

A target market is market segment which is a smaller part of the mas market and the people in it posses common characteristics

The characteristics which people in the target market may have include:

Demographic characteristics e.g. occupational

Geographic characteristics e.g. regional

Psychographic characteristics e.g. religious beliefs

Behavioural characteristics e.g. usage rates

Demographic factors relate to developing detailed knowledge of a customer

Geographical factors relate to developing knowledge of places where the customer buys the product ands service

Psychographic factors relate to understanding lifestyle factors about the customer and why they purchase the product or service

Behavioural factors relate to developing knowledge of the customers buying patterns such as usage rates

Target market

The focus of business

A group of people

Potential customers

Determines marketing strategies

Market concern

Australia are largely health conscious consumers and diet is frequently an issue of concern

The key health issues which relate to diet include

Weight

Cancers

High blood pressure

Diabetes

Bowel functions

Heart disease

To an extent, our concerns for health can be treated with dietary solutions such as:

High fibre foods Low fat foods

Gluten free foods

Sugar free foods

Lactose free foods

Salt reduced foods

Cholesterol free foods

High nutrient foods

Environment concerns

A large percentage of the Australian population is concerned about the environment and the impacts of business upon it

Food developers need to focus on the following issues in response to concerns such as:

Organic farming

Wise energy use

Over cropping

Land management

Animal welfare issues

Technological developments

Technological developments in society have been rapid

The key technological changes include:

Automation

Ingredient controls

Genetic modifications

Convenience concerns

In a developed economy and society such as Australia, lifestyles have changed significantly in the last 50 years

The pace of change has resulted in demographic changes to families such as:

An aging populating

Single person households

2 working parents

Long working days

As a result, Australians demand that convenience is factored in food development

Consumers preference food which

Can be heated and eaten

Are already portioned

Are transportable

Are value for money

Company profitability

Firm must be sustainable in order to remain in business for a period of time

Essentially a business must make sure that its incomes exceed its cost. They key cost of a food business include:

RentInterestSupplierProduct development

Other aspects which are relevant to company viability include:

Providing products which are competitive with other business

Remaining efficient

Decrease cost by decreasing packaging

Increase the value of product

Australian food industry:

Sectors of the AFI:

The AFI involves the organization production, processing, storage, and marketing of food products of mostly a very high standard

The agri food chain is the production and supply of food to the customer. Sectors of the industry include:

Agriculture and fisheries:

Agriculture is the cultivation of land to produce both plants and animals.

Plant production involves preparation of the soil, seed, selection, sowing, fertilizing, harvesting, storage, and transportation.

Animal production involves production/supply of food and water, breeding, treatment of illnesses/disease transportation

Fisheries involve the cultivation of different cold blooded aquatic species

Key features of agriculture and fisheries include:

Production of plants production

Technological developments have compensated for harsh climates

Primary industries contribute significantly to the Australian economy Food processing/manufacture

The value added area is a major area in the AFI. This sector use raw materials to produce processed foods. The industry utilises products. There are also known as value added foods. These

products are typically pre packaged for example salami, corn flakesFood service and catering

This sector prepares food so that its ready to eat, referred to as hospitality industry for example restaurants, take out joints, hotels and it can be either commercial or non commercial through institutions example hospital, prisons

Impact on the economy:

The AFI is Australia’s largest manufacturing industry

Export market of over $ 19 billion

Largest employer in Australia

Expanding due to tourism

Career opportunities and working conditions:

The AFI employs a large number of people. Unskilled workers are decreasing while skilled workers are increasing

There has been increased mechanisation, automation, and computerization which workers have decreased

Working conditions vary from business to business, enterprise bargaining is a popular. There are standards for working conditions example butchers work at 10 degrees Celsius

Employees work shift work and work on public holidays. usually casual/part time work

Advisory groups and legislation

Food industry legislation is administrated on 3 levels:

Federal StateLocal

Federal legislation includes:

- HACCP- FSANZ- AQIS- TPA- Export control (processed foods)

State legislation includes:

- Health act- Trade management act- NSW food act- OH&S- Protection of the environment act (noise pollution, clean water act)

Local legislation includes:

- Food surveillance officers- Codes for construction and alteration of food premises- Codes for inspection of food and food premises

Governments are advised by independent organisations on the development of polices and legislation sector of the AFI has a different representative organisation:

- Business groups in a sector example Australian Diary Corporation A group that advises on specific issues example national heart foundation

- A group that prevents local food supply from contaminants for example AQIS

FSANZD (food standards Australia and new Zealand):

FSANZD was set up by an act of parliament in 1991It is an in-depended legislative body, so it is able to draw up legislation

The objectives of FSANZ are to:

Promote the supply of safe and wholesome food for the community

Promote fair trade and commerce in food, both nationally and internationally

Provide adequate information relating for food for consumers

State Government policies:

Clean air act Controls the output of odours (smells) and smoke from processing plan and is enforced by the NSW EPA

Clean water act The EPA controls water pollution by monitoring any gas; liquid, solid discharge into the water so is it safe for fish colonies and human consumption

Noise pollution act controls noise, sound, and vibration from food processing plants

Trade measurements act 1989 enforces food standards and hygiene regulations in the food industry. It deals with:

False description. Includes foods that have incorrect labelling

Unlawful practises. Products must have content and packaging requirements

False advertising. False description on the label

OH&S helps to protect the health, safety, and welfare of people at work

Local governments policies:

Appointment of food surveillance officers carries out the food act by routine inspection

Codes for inspection of food and food premises cover the regularity of inspections and exemptions through acting on complaints and illnesses

Codes for construction and alteration of food premises covers building materials and installation guidelines for fixtures, equipment, toilets and window displays

Level Description Features

Household Home produced or manufactured products

Its always a small scale with low levels of technology

Small Business Include family businesses or partnership often less than 20 members

Tens to be local example local Chinese restaurant

Large business Operates state wide or country wide

Using heavy high quality computerized machinery equipment for production

Multinational A food company which operates in 7 countries example McDonalds

Large scale on all fronts and global

Research and development:

Research and development is the process used to make new products and services. Competition drives manufactures to create new products to increase market share. Features include:

- Expanding market place- Research creates understanding of the market place- Continual consumer pressure to innovate

Quality assurance:

Quality is the ability to meet requirements Q.C aims to achieve quality assurance

Impact on the environment:

Conventional farming has a large effect on the environment due to

Waste from packaging

The use of chemicals

Manufacturing and processing causes the emission of fossil fuels

Consumer influences:

The demographics and geographic location of the Australian population is always changing. This can be due to

Old population

Increase in health/food awareness

Increase in working hours

As a result. Organic farming has become far to popular. Organic products are now becoming produced a lot due to people who are health conscious and suffer health issues such as diabetes

Impact on society:

Due to migration food choices have increased and Australian cuisines has become very popular

Government and legislation:

Federal government policies:

Health and nutrition policy

The main aim is to educate the public in making wise food choices to reduce the number of health issues and to reduce he cost of health care

Trade policy

Australia’s trade policy has instituted the removal of trade barriers affecting both the import and export of food

Trade practises act 1974

Controls trade in the form of: misuse of power, resale price maintenance, and protection of competition, exclusive dealings, and price discrimination

Australian food standards code:

The AFSC outlines a general list of standards which food producers must adhere to regarding:

Labelling and advertisingDate of manufactureForeign objects in foodFood additives

AQIS (Australian Quarantine and inspection service)

AQIS is a part of the development of agriculture fisheries and forestry. It works with the Australian customs service and Australia post to protect Australian agriculture contamination. AQIS is responsible for:

Protecting Australian primary producers Checking legal importsProviding export certification for agriculture

To protect Australia from exotic pest and disease, AQIS runs:

An airport programA seaport programQuarantine stations for imported animals