For food and grocery manufacturers, the traditional approach to growth has often followed a familiar path: Demand increases, production capacity reaches its limits, and the answer becomes a bigger facility.
But according to Peter Taitoko, founder and managing director of RMR Process, that mindset now creates unnecessary cost and complexity for many businesses.
With more than 30 years’ experience working across food manufacturing in Australia and New Zealand, Taitoko has seen firsthand how capital decisions around facilities can determine whether an expansion moves forward – or gets abandoned altogether.
RMR Process, which has operated for 20 years, specialises in designing and delivering food manufacturing facilities, with a focus on process engineering, production efficiency and practical facility design.
Taitoko says the key is shifting the focus away from the building itself and towards what actually drives manufacturing performance.
“There’s a real shift happening in the market. My company has been doing this for many years, and I’ve personally spent more than 30 years in the food industry across Australia and New Zealand. During that time, we’ve seen significant change.
“Historically, our focus has been primarily food and beverage, but we’re now expanding into grocery because there’s a clear opportunity to apply our niche model across other areas of manufacturing. It makes sense because the products and production processes are often very similar.”
He says one of the biggest barriers facing manufacturers looking to expand is the upfront capital required to establish or upgrade facilities.
“One of the biggest challenges – and one that has contributed to the decline of manufacturing in Australia and, to some extent, New Zealand – has been the upfront capital cost of establishing manufacturing facilities. Too often, businesses looking to build or expand have found the cost of construction simply out of reach.
“While RMR specialises in designing and delivering food manufacturing facilities, we’re not a construction company. Over the years, we’ve seen many projects cancelled because the capital investment required was too high. The result has been manufacturing moving offshore to Southeast Asia and China, or businesses deciding not to expand at all.”
But there is a better way: Rethink how facilities are designed and delivered from the beginning – starting with the manufacturing process rather than the building.
“We’ve worked on projects where we’ve been able to bring manufacturing back to Australia from offshore markets by helping businesses achieve a viable return on their capital investment.
“The way we do that is by taking a practical approach to facility design. We still deliver high-quality, compliant manufacturing environments, but the focus is on where the value is created: the process and packaging lines. Ultimately, that’s what generates revenue for the business – not the building itself.”
Start with the process, not the footprint
Taitoko believes many expansion projects become unnecessarily expensive because businesses begin with the wrong questions.
“When manufacturers look to expand, move into a larger facility or upgrade their existing site, the first question they often ask a construction company is: ‘How much is this going to cost?’
“The challenge is that they’re often starting with the wrong question. The next question becomes, ‘How big does it need to be?’ and before long, they’ve designed a facility that may be more than they actually need and are facing a cost that’s simply too high.”
Rather than building a facility first and adapting production around it, he says manufacturers should map their future requirements and design the environment around the operation.
“We start by asking a lot of questions about the business: How it operates day to day, what it is manufacturing today, and what it wants to manufacture over the next one to five years in terms of volumes, product types and SKU range.
“From those conversations, we build a process model around what the facility actually needs to look like. We then map out the cash flow timeline over that one-to-five-year period, including what the investment would look like if the business tried to build everything upfront.”
This approach often reveals that a staged investment model is more effective than a large upfront commitment.
“As RMR Process expands further into grocery, we’re already seeing significant results for businesses looking to grow. In many cases, we’re actually the ones putting the brakes on and saying: ‘You don’t need to do that today. That’s a requirement for 12, 18 months or even two years down the track.’
“We create a staged budget and timeline that focuses investment where it matters most – getting the business operational within 10 to 12 months, increasing volume and throughput to the required levels, and then building in the ability to expand as the business grows.”
His advice is simple: prepare for growth, but avoid paying for capacity before it is needed.
“Often if you try to build for the future from day 1, you kill the project. So plan for the future, but spend for the next one to two years.”
Creating cost discipline through better decisions
A major part of reducing project costs, Taitoko says, comes down to challenging assumptions early.
“Our core business is actually designing processes. By default, we landed in the space of designing the factories many years ago, because we would get called to the table to sit with architects and builders who had never designed or built a food factory before.
“Because all of our senior engineers started their careers in food manufacturing, we would look at the layouts and designs and start challenging why so many rooms? Has the drainage been considered? Can we simplify the design? Then you inherently take the cost out of it.”
He also believes manufacturers need greater transparency around construction costs.
“Our model, which we’ve refined over many years, has remained consistent for two decades: strip away the complexity of the construction process and, where capital is involved, shift as much investment as possible back into the operational side of the business rather than tying it up in real estate.”
That includes creating genuine competition during the tendering process.
“Our message is simple: Take the project to the market and create competitive tension around the cost. For example, we’ll design the facility and take it to three, four or five reputable construction companies that we know can all deliver a quality outcome on time.
“Almost without exception, we see a 30 per cent difference between the lowest and highest construction quotes. Apply that to a multi-million project, and the cost impact is significant.”
However, he says cost reduction should not simply mean cutting scope.
“Always be pressure testing the scope. Once you pressure test it and define the scope properly, you can then develop an execution strategy that can be delivered at a much lower cost and in a much shorter timeframe.
Making existing facilities work harder
While new facilities often attract attention, Taitoko says many manufacturers could unlock significant capacity before considering expansion.
“When a manufacturer comes to us with a challenge around expanding their business, our role is to keep them in the game.
“A big part of that involves auditing their existing processes. Often, we’re actually talking manufacturers out of expanding their facilities by asking a simple question: ‘Have you thought about making your factory go faster before you make it go bigger?’”
He says there has also been a shift in how businesses view automation. When times are good, and manufacturing is strong, automation has traditionally been seen as a way to reduce costs – to automate processes and reduce headcount.
“Today, much of the automation work we’re doing is focused on revenue growth: Optimising and accelerating existing production lines so businesses can produce more and sell more.”
The question, he says, is whether the business can convert additional production capacity into commercial growth.
“Sometimes there are tough conversations; our question might be: ‘Respectfully, do you want to shrink your business or grow your business? If we could make that process line run four times faster, can your sales team sell the volume?’
“And almost every time they say yes. So let’s do that. Let’s increase volume without increasing headcount.
To Taitoko, the future of manufacturing growth is less about owning the biggest facility and more about making smarter capital decisions.
“For many manufacturers, when construction costs were lower and the economy was strong, owning their own real estate and factory was the preferred model. That has changed significantly since Covid.
“The question we’re asking manufacturers now, particularly when capital is tight, is: ‘Are you a manufacturer or are you a property developer?’ When the answer is: A manufacturer, the focus should be on manufacturing, while developers focus on developing facilities. We believe that model is a big part of the future, and we are already working with several landlord-developers to provide facilities for clients. This allows available capital to be directed where it creates the greatest value – into faster, smarter processing lines.”
The goal, Taitoko says, is to create facilities where every element – from land and buildings through to equipment, utilities and people – works together.
“Integration is key; it’s no longer just about building a shed and installing equipment. It’s about integrating the land, building, utilities, processes and people so the business is ready to succeed from the moment production begins.”
