Australia's food and grocery manufacturing sector employed 294,212 people and turned over $173 billion in 2023/24, according to the Australian Food and Grocery Council's State of the Industry report published in 2025. Turnover grew 5.3% and employment 4.4% year on year. 36% of those jobs sit in regional Australia. Exports rose 5.2% with the United States surpassing China as the largest export destination. Capital investment fell 11% to $3.8 billion.

The sector is the country's largest manufacturing industry. And the workforce that runs it is contracting faster than most boards have planned for.

The retirement curve is steeper than the recruitment pipeline

Oxford Economics Australia, commissioned by the Australian Food and Grocery Council, published its workforce pressures report in May 2026. The findings reset the timeline most FMCG boards have been working to.

In some occupations critical to food and grocery manufacturing, more than 40% of the current workforce is expected to leave within the next decade through retirement. For forklift drivers, the figure is 60%, around double the national average. For packers, around half of the 2025 workforce, approximately 9,100 workers, is expected to leave the role through movement into other occupations. The combined effect creates a workforce gap of about 5,000 packers by 2035.

The report describes the gap as "a structural problem that cannot be solved by short-term recruitment alone." Migration and education pipelines won't be enough to offset retirements and labour leakage.

Jobs and Skills Australia's food supply chain workforce report, released in 2025, identifies a shortfall of more than 170,000 workers across the food supply chain. 85% of food production workers sit in regional areas. The report makes 41 recommendations spanning training, migration, regional housing and workforce design.

For the senior leadership running those operations, that's the operating environment. Workforce supply is contracting at the same time as regulatory load, automation requirement and cost pressure are rising.

The supply chain leader's job description has been rewritten

The AFGC and Argon & Co Supply Chain Survey 2025, published in March 2025, recorded a fundamental shift in priorities. For the first time in the survey's history, cost reduction outranked customer satisfaction as the top priority for supply chain leaders, with 43% of organisations now ranking it first over the next 1 to 2 years.

The other findings round out the picture.

• 74% of businesses are investing in generative AI over the next 3 years, focused on routing, inventory and quality
• Nearly 80% of companies have experienced moderate to large-scale supply chain disruptions
• 68% cite international shipping delays as a major issue

The supply chain Director or General Manager running a mid-tier FMCG business is now expected to deliver cost reduction, invest in AI-enabled forecasting and warehousing, manage a workforce in structural decline, and absorb continuous disruption. The role has changed materially in the past 24 months.

Disruption isn't a 2022 story

Boards that assume supply chain disruption was a Covid-era phenomenon should look at the data from the past 18 months.

DP World Australia was hit by Maritime Union of Australia industrial action through December 2025, with terminal closures across Sydney. The dispute centres on DP World's $600 million automation programme, which the union says threatens up to 1,000 jobs at the country's 4 major container terminals. DP World handles a substantial share of Australia's container trade.

Queensland flooding in early 2025 severely affected Australia's banana crop and disrupted multiple fresh produce supply chains. The pattern of climate-related agricultural disruption has now extended across multiple sequential summers.

The Mandatory Food and Grocery Code of Conduct commenced on 1 April 2025. For supply chain leaders working with Coles, Woolworths, ALDI and Metcash, the code imposes new contractual, dispute resolution and supply forecasting obligations. Maximum penalties reach $10 million or 10% of annual turnover per contravention. Fresh produce forecasting obligations and price formula requirements landed on 1 April 2026.

Cybersecurity threats, climate exposure, regulatory load, port disruption and union activity now run through the supply chain function on a continuous basis. Each one of these touches the supply chain Director's desk before it reaches anyone else.

The compliance load is rising at the same time

The AICD Director Sentiment Index for the second half of 2025 found 75% of directors expect compliance burdens to increase in 2026. 67% say regulatory and compliance requirements are actively constraining productivity. 78% see poor productivity as a significant risk.

KPMG's "Keeping Us Up at Night" survey of 274 Australian business leaders for 2026 found the top 5 challenges are AI and technology (63%), digital transformation (54%), cyber risk (42%), regulatory change (37%) and productivity (35%). For an FMCG supply chain leader, every one of those items lands inside the role.

The migration pipeline isn't going to fix this on its own

The 2026/27 Federal Budget, handed down on 12 May 2026, confirmed Australia's Permanent Migration Program planning level remains at 185,000 places, with more than 70% allocated to the skilled stream. The Government also confirmed $85.2 million in funding to accelerate skills assessments and occupational licensing, particularly for trade and manufacturing occupations.

For senior leadership in food manufacturing, skilled migration is now part of the strategy. Plant managers, quality leaders and supply chain operators from Malaysia, the Philippines, India and Vietnam are filling senior site-level roles, particularly in regional Australian manufacturing. The Skills in Demand visa replaced the previous Subclass 482 visa from 7 December 2024 with a streamlined pathway for sponsored workers.

But the Oxford Economics analysis is clear that migration on its own won't close the gap. Senior leadership needs to do more than recruit through inbound migration. Workforce design, regional housing, regional services and retention all need to sit alongside the recruitment.

What boards and CEOs should change in 2026

The supply chain succession question shouldn't sit with the supply chain Director. It should sit with the board.

Boards that want to address the talent constraint need to act on 4 things directly.

1. Map the supply chain leadership bench across 3 layers, not 1

The Director or GM is one role. The Site Operations Manager, Head of Procurement, Demand Planning Manager, Quality Manager and Logistics Manager all sit underneath. If 3 of those 5 roles are filled by people who would need to leave the business to progress, the bench is exposed.

2. Recognise the regional concentration risk

With 85% of food production workers based regionally and capital investment in the sector falling 11% in the most recent reporting period, recruiting and retaining senior leaders into regional sites is its own discipline. Sydney or Melbourne-based recruiting playbooks don't translate.

3. Account for the cross-border flow

Senior commercial and supply chain roles are increasingly being held in Singapore, Bangkok, Manila and Auckland by leaders who originally came up through Australian businesses. The regional reporting structure of multinational FMCG businesses now sits offshore. Boards that haven't realigned their search and retention strategy to this reality are competing for a smaller domestic pool than they think.

4. Make the role redesign the first step of the search

The supply chain leadership brief that worked in 2022 doesn't reflect the current scope. Cost, AI integration, climate disclosure, Grocery Code compliance, regional workforce strategy and capital programme delivery now all sit in the role. Define the role before defining the candidate.

The window is narrowing

Supply chain leadership succession in FMCG can't be a 2027 problem solved in 2027. The retirement curve identified by Oxford Economics, the 170,000-worker shortfall identified by Jobs and Skills Australia, and the regulatory and disruption load now sitting on the supply chain Director's desk all point in the same direction. The bench is thinning. The role is getting more complex.

Boards and CEOs that move now will have the choice of leaders. The ones that wait will have whoever's left.

ELR Executive is a specialist executive search firm focused exclusively on FMCG, food and beverage manufacturing, and fresh produce. If you’re making a senior leadership decision and want clarity on what capability your business needs, a conversation with John Elliott is a good place to start.