In a previous post, I wrote about how grants can help provide
incentives for innovation. This post is a follow-up showing insights
into how some companies are doing just that. It's all about leveraging
investment and finding new markets.
There are numerous government programs available for businesses to
innovate. Perhaps you're questioning the rationale behind government
grants and even suspicious of "free money". You wouldn’t be
alone. It is well known that governments aren’t high on the “things I
trust” list of most people.
However, it makes good economic sense for governments to support
business innovation, because as businesses grow, so too does the
economy. Stimulating growth in export markets is important, because
that brings more money into the Australian economy.
The federal and state governments offer grants to eligible applicants
to motivate business growth. Not all grants are focused on export
markets. Some programs target our local communities. One such example
is the Victorian Salt Reduction Innovation Grants (VSRIG), being
promoted on this Building Healthier Food platform, and supported by
Food Innovation Australia and VicHealth.
From the businesses that have already engaged in the VSRIG program,
the results are promising. Whilst it is too early to reveal the
identity of the businesses and the commercially sensitive details of
projects, I can provide insights on the commercial benefits.
Business are exploring new snack markets and more convenient channels
to customers, reformulating existing products and creating new
products for new emerging markets. On average, projects are expected
to grow revenue by $400,000 from a $50,000-$125,000 development cost.
The grant funds ($25,000) provided by VicHealth and FIAL offset the
development cost from 20% to 50%, which is a good discount on top of
an early-mover advantage. With average costs of development and
production removed, this gives an ROI of about 20%.
The purpose of the VSRIG grants are to reduce the amount of salt
being consumed by helping food manufacturers reduce the amount of salt
in their products. Whilst salt intake is a personal dietary decision,
many experts indicate that on average, salt intake is greater than
recommended. We also know that the 'health conscious consumer' is
emerging as a mainstream market. This is observed not only in
Australia with major retailers focusing on health, but also in export
markets. There is no doubt that consumers are seeking healthier
alternatives. This is good news for food manufactures who are
interested in growing their markets, because there are funds and
experts readily available to help.
For success from these types of grants there are two important
considerations. Firstly, seeking a specific market opportunity (or
customer) and secondly, engage the right consultant or expertise to
help. Whilst reducing salt can help differentiate a product and access
new customers, it must be done with consideration to product quality
and safety. Historically, salt was added to a food to combat
microbiological activity and increase shelf-life. But as we discover
more about healthy eating and alternative preservation options, a
balance can be found, where flavour doesn't need to be compromised.
The Building Healthier Foods platform not only provides access to the
funds, but can also make connection to expert to ensure a quick and
effective development. There are still some funds available for
businesses with a Victorian footprint to support development of lower
salt products. To learn more about how you can access the Salt
Reduction grant https://bhf.news/blog
Angus Crossan is currently the Leader of The FIAL Matrix and
Innovation Manager at Food Innovation Australia Limited. The FIAL
Matrix is a new collaborative portal system supporting innovation in
food businesses in Australia. Angus is also an experienced start-up
venture builder, innovation trainer, and investor in agri-food
research and innovation. linkedin.com/in/anguscrossan