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Australia Food and Drink Report Q1 2008Published by: Business Monitor International Published: Feb. 1, 2008 - 74 Pages Table of Contents
Abstract"If one trend can account for Australia’s ranking in BMI’s new Food & Drink Business EnvironmentRatings it is premiumisation. This mature market, with its relatively tiny population and vast areas ofunpopulated and under-developed land, ranks second out of 14 Asia Pacific markets in terms of thepotential it offers to would be food and drink investors. A high spending population, intrigued by, andwilling to part with cash for, innovative products ensures attractive consumption levels and yet theselevels are forecast to grow further still thanks to industry dynamism and the continued pursuit ofpremiumisation. In BMI’s newly-published Q108 Australia Food & Drink Report we examine the natureof the investments driving industry growth and assess the five-year sales outlook for the industry.Two of BMI’s industry forecasts that best demonstrate the extent of premiumisation in the local marketare our food consumption forecast and our confectionery sales forecast. Food consumption is forecast toincrease by 10.4% to US$32.28bn in 2011. This represents considerable growth in a market in which foodconsumption in volume terms is forecast to remain fairly constant. Of course, this growth will in part byfuelled by rising food prices; a global trend caused by severe climatic extremities of the past couple ofyears, by heavy demand from the alternative energy sector and by soaring fuel prices which push up bothproduction and transportation costs. However, this growth also reflects an ever-growing Australiandemand for higher-value, better-quality food and beverage products. Growth in the confectionery sectorperhaps sums this up best. This is a completely non-essential product category which consumers wouldsimply retreat from should rising food prices jeopardise their spending patterns. However, BMI’sconfectionery sales growth forecast of 5.3% to 2011 in volume terms, is completely usurped by ourgrowth forecast of 17% in value terms, reflecting the fact that Australian consumers are still buying nonessentialgoods such as confectionery and are increasingly buying more expensive, added-value variants.This trend is in evidence across multiple sectors of the food and drink industry; soft drinks, alcoholicdrinks, frozen foods, snacks and processed foods among them. Two, reasonably small, yet significantinvestments from the last three months, ably highlight the phenomenon. Coopers Brewery - a mere bitpart player in Australia’s vast beer market - announced plans to invest US$9.7mn in production andwarehousing in order to boost its market share from 3% to 5% by 2011. The company plans to exploitinterest in its premium niche and boutique brands to get one over on the industry giants whose expertiselies in the mass-market sector. Meanwhile US food major Heinz announced a US$8.6mn investment in itsWagga Wagga processing plant, the bulk of which would go towards a new ready meal line. This isnotable not just because of the impact that convenience foods such as ready meals have on the value offood sales in Australia, but because it highlights a rare case of a global major opting to stay in Australiaand exploit the market’s potential from within rather than looking to the low-cost and potentially highergrowth markets of Asia. In summary, the Australia food and beverage market might be mature, but itremains immensely profitable and dynamic.Get Full Details About This Report >> |
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