Innovation in Australia’s food and beverage industry

Australia’s food and beverage sector is changing fast. The Australian food industry is using new ideas and technology to keep up with consumer demand and is embracing sustainable packaging and eco-friendly materials to reduce its environmental footprint. 

Working in R&D tax offers unique insights into broader industry trends. From energy-efficient production processes to data tracking for ‘paddock-to-plate’ products, the innovations we see today can quickly become the industry standards of tomorrow. 

 Key innovation trends in Australia’s food & beverage manufacturing   

Food and beverage manufacturing is evolving with new ideas to meet market needs. While smart technology, such as AI and automation, improves efficiency, there is also a strong push towards greener practices.

Christmas may be a distant memory by now, but if you were gifted a box of chocolates you haven’t finished yet, you may have an example of this change still lurking in your household. Festive boxes of assorted chocolates have been a popular gift since the 1930s (think Quality Street, Roses) but the traditional and somewhat infamous packaging has undergone some notable changes in recent years.

What began as collectible metal tins evolved first to smaller, less durable plastic tubs and now lighter, cardboard boxes with eco-friendlier (but often criticised) paper wrappers. This replaced more ornate foil and cellophane, consequently changing the unique shape of some of these chocolate favourites. While not everyone is a fan of these changes, it is reflective of broader consumer changes in taste, our attitudes towards sustainability, and preference for convenience. 

Sustainability is now a driver of change. Moving beyond paper wrappers, many manufacturers use recyclable packaging and plant-based options, such as plastics made from corn or sugarcane, and edible food wrappers to reduce waste.

Recent R&D efforts focus on upcycling fresh but perhaps unsellable or imperfect whole fruit into nutrient-rich inclusions for baked, chilled, and frozen foods, using dehydration and extrusion techniques that preserve natural fibres and nutrients.

Innovations in the dairy industry include proprietary formulations for yoghurt-based products that extend shelf life, reducing cold-chain costs and packaging waste.

Premium, ready-to-eat dairy snacks with high-protein, clean-label recipes combining dairy, nuts, fruits, and grains are also emerging as category innovations.

This move to greener methods is about more than corporate social responsibility. It meets modern consumer expectations while at the same time preparing for incoming regulations.

Energy efficiency and renewable integration in production

Energy efficiency is another major factor changing the way food and beverage businesses operate. Companies increasingly use renewable energy sources, such as solar panels and wind turbines, as well as energy-efficient machinery. R&D in refrigeration systems has led to the development of novel central refrigeration solutions, incorporating specialised compressor racks and sensors as alternatives to traditional ammonia-based systems.

These innovations help reduce utility costs and carbon emissions, while government programmes support the adoption of renewable energy equipment.

The role of digital transformation and automation

Digital transformation is another big change for the sector. AI is powering smart factories, making food and beverage processing plants more efficient. Automation tools make work faster and more accurate, allowing businesses to keep up with customer demand. 

Industry leaders have conducted hundreds of formulation trials to refine natural flavour ranges, high-protein and high-fibre products, and sorbet bases. These trials involve experimenting with unique flavourings and stabilisers, each affecting freezing point, acidity, moisture retention, viscosity, mouthfeel, and overall processability. And systematic approaches leveraging data and automation optimise product quality and shelf life.

AI and smart factories
AI helps manufacturers use consumer data to make production more accurate and enables predictive analytics for demand trends and product development. In beverage innovation, R&D tackles formulation challenges, such as protein solubility and taste masking, using advanced manufacturing techniques like nitrogen dosing and precision pasteurisation to ensure product stability and nutritional integrity. Innovators are also trialling smart sensors and AI-powered inspection systems to monitor equipment health and detect packaging defects, keeping production running smoothly and reducing waste.

Supply chain digitisation and traceability solutions

Supply chain digitisation is enhancing traceability and operational agility. Blockchain technology provides transparent records of ingredient origins, while real-time GPS tracking and digitised warehousing improve inventory management. Systematic R&D approaches to testing formulation ratios and processing parameters are reducing technical uncertainty and improving traceability for innovative food inclusions. These digital tools help businesses grow and adapt quickly, comply with regulations, and demonstrate a commitment to responsible practices.

Product innovation and differentiation

Innovation enables the increasing prevalence of ‘free-from’ and vegan options as well. For example, dairy innovators developed chocolate-coated gelato sticks, trialling new moulding techniques and freezing parameters to achieve premium quality and extended shelf life.

In the craft brewing sector, R&D has produced a diverse range of novel brews, experimenting with local ingredients and new combinations of malt, yeast, and hops to create distinctive flavours, aromas, and textures.

Health supplement leaders are undertaking R&D to evaluate the efficacy of bioactive ingredients, balancing nutritional content and shelf stability for export markets.

In the past year, we’ve also seen innovative collabs with brands such as Natural Raw C and Pistachio Papi joining forces to develop first-of-its-kind food and beverage offerings, such as their natural coconut water and pistachio chocolate blend, and then using social media platforms to promote this new limited edition product.

The role of RDTI (Research & Development Tax Incentive) program and grant funding

The Research & Development Tax Incentive (RDTI) is the Federal Government’s primary mechanism of support for business innovation. The program supports experimental risk and ongoing innovation, which is particularly beneficial for boutique and independent manufacturers (SMEs) where it provides a cash benefit via a tax credit for undertaking eligible R&D activities. For large companies undertaking eligible R&D activities, they can access an R&D tax credit to reduce their tax bill.

The program rewards businesses who systematically develop and test new or improved formulations, processing parameters, and to trial new or improved manufacturing techniques, helping them differentiate in a competitive market and deliver products that meet or exceed consumer expectations.

Other Federal and State government support may also be available through various grant programs. For example, grain producers may be able to access funding to assist the manufacture of value-added products, strengthen grower capability and profitability, and enhance economic impact on local grower communities. Smaller Australian producers can also access grant funding programs offered through large corporations to help them develop unique products, technologies and processes.

New ideas are changing the food and beverage manufacturing industry in Australia. Adopting sustainable packaging, energy-efficient systems, digital transformation, and advanced R&D helps businesses keep up with market demands and support the planet.

Staying up to date with the latest trends and continuing to invest in innovation and support for manufacturers is essential for success in this dynamic industry.
 

Looking for more information?

Reach out to your local RSM office to continue discussing how Australia’s food and beverage manufacturers are reshaping operations through sustainability, smart technology, and advanced R&D.