Australia’s food and grocery manufacturing turnover rose 5.5 per cent to $182.6 billion in the 2024-25 financial year. Steady consumer demand across supermarket aisles drove the increase.
Total workforce numbers across processing plants and distribution hubs passed 301,000 people over the 12-month period. That headcount now represents 33 per cent of all manufacturing jobs in the country.
Squeezed margins and factory payrolls
The annual State of the Industry 2024-25 report from the Australian Food and Grocery Council shows steady top-line expansion across packaged goods, beverages and daily essentials. Yet the headline revenue growth conceals worsening operational headwinds inside processing facilities.
Persistent cost pressures and compressed margins are reducing the capital available for factory upgrades, automation and long-term expansion, the council warned. While consumer spending on staples supported turnover, wholesale input prices and elevated running expenses continue to erode net profitability across supply chains.
Regional production pressures
Similar margin pressure affects food manufacturing hubs across the Asia-Pacific region. Processors face higher utility bills, freight volatility and stubborn ingredient costs. When consumer-facing brands cannot fully pass wholesale cost increases to supermarket buyers, capital spending plans are routinely deferred.
Factory operators are now recalibrating capital expenditure budgets for the 2025-26 cycle. They continue to monitor wholesale input pricing ahead of supplier negotiations with national retail chains.
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