The move is part on an overall goal to boost competitivity in the country's food industry and add A$3 billion (€1.8bn) a year in value to Australian farm and food products sector by 2014. At the core is a A$20m (€12m) research partnership - the Food Futures National Research Flagship - lauched by ministers in Canberra, Australia at the end of last week.
"Today the consumer is king as far as food is concerned, and Food Futures is also focussing major effort on finding out exactly what consumers want and don't want in the way of foods, flavours and health requirements," said Flagship director Dr Bruce Lee.
At the heart of the research are five strategic spots in the food chain identified by the research network for 'transformation'. Two of these 'spots' take a sharper look at ingredients and additives, focussing on flavours as well as meat and dairy ingredients.
The network will aim to design a 'precise measurement of flavour to improve wine and food quality' while the second 'strategic spot' will examine separating healthy bioactive ingredients from meat and dairy and investigating future applications.
"We know most people want healthier foods that will help reduce their risk of heart disease, cancer, diabetes, overweight and other chronic conditions - but at the same time they want food to be delicious, safe and easy to prepare.
We're using the latest science to create new foods and diets that will meet all these needs," said Dr. Lee.
As global wheat stocks hit 30 year lows, and China, in particular, turns to Australia for wheat supplies, one focal point of the programme will be improving the country's burgeoning wheat industry.
'We aim to develop and commercialise new high-quality wheats incorporating nutritional and functional improvements to meet emerging consumer demand,' added Dr.Lee.
In Europe the functional food market is very much alive and kicking. A report late last year from market analysts Datamonitor showed that the number of functional food buyers has more than doubled in the UK over the past five years and is set to reach 5 million by 2007.
Their study revealed that UK consumers spend on average £110 (€157) a year each on functional foods and, along with Germany (€176), are the highest spending functional food consumers in Europe, while Italy, the Netherlands and Sweden have the lowest.
France has the fastest growing market with the number of functional food and drinks consumers tripling over the past five years and set to grow to almost 4 million by 2007. According to Datamonitor, total sales in France will grow by almost €150 million, to €506 million in 2007.
The rapid growth in the number of functional food consumers shows that the consumer base is expanding beyond consumers with specific medical needs to include those who are merely concerned about future health risks and even those who find that functional foods offer lifestyle benefits, said Datamonitor.