 |
| Australian food industry and the GFC Recent research from Leatherhead Food Research (LFR, UK) Global Food Markets database suggests that the key food sectors in Australia are weathering the global recession well. Although there are signs that consumers have begun to economise during the slowdown, many sectors reported strong growth in 2008, with 2009 sales estimates also positive. This is in part due to the fact that total consumer expenditure in Australia has not dropped at the same levels as other major economies. Real private consumption expenditure in Australia grew 2.2% in 2008, with an OECD forecast of 1.3% in 2009 and 1.5% in 2010 (compared to +0.3%, -1.3% and -0.2% respectively for the Euro area). Baby food sales, for example, rose 8.8% in 2008 with 2.8% growth forecast for 2009, reflecting a trend towards higher quality and more expensive products, as well as increased costs of raw materials being passed on by manufacturers. Chocolate sales were up 6.1% in 2008 with 3.9% growth forecast for 2009. Much of the recent market growth can be attributed to the increasing popularity of premium chocolate, especially in sectors such as boxed and bite-sized chocolate assortments. In addition, sales of everyday blocks and countline products have also held firm. Sugar confectionery has also been a buoyant sector, up 5.8% in 2008 and an anticipated 3.7% in 2009. Much of the recent growth can be attributed to growing consumer interest in healthier varieties of sweets, with sugar free products featuring strongly. Medicated confectionery has also performed well of late. Sales of coffee grew 7.5% in 2008 and are 25% higher than in 2005, due to a trend towards specialty instant and roast coffees. A further rise in value of 5.3% was predicted for 2009. In ice-cream, sales of premium and indulgence products held firm in 2008, despite the squeeze on spending power during the downturn. Sales through grocery channels were up 5.9% in 2008, with a 4.8% increase estimated for 2009. Compared to European standards, per capita consumption of bottled water is relatively low in Australia at around 25 L, but consumption levels have been growing and sales in value rose 12.0% in 2008 with an increase of 8.3% predicted for 2009. Sales of more expensive smaller formats for children along with the success of vitaminised products targeted at adults have contributed to growth. The sauces market is one sector that has benefited from the tendency for consumers to economise and prepare meals from scratch at home in place of dining out, as convenience and ease of use have become a key selling point. Overall sales of sauces in 2008 reached $998 million, up 4.0% on the previous year, with 3.1% growth forecast for 2009. Asian influences have been a key trend in terms of flavour development. For example, soups based on traditional Far East Asian recipes as well as Latin tastes, which are spicy and often incorporate beans and lentils, have proved successful. In recent years, Asian savoury snack foods have become more popular, although their level of sales remains modest. Australian consumers have developed a taste for ethnic cuisine, with Indian, south-east Asian, Mediterranean and Latin recipes all proving popular and currently accounting for 75% of ready meal sales. Since 2007, considerable merger and consolidation activity has taken place in the marketplace as the industry moves into a phase of maturity and as many domestic and foreign companies alike are looking to take advantage of opportunities in the Asia-Pacific region as a whole. As a result, several key sectors have become increasingly dominated by a handful of players as shown in the following table.
Major deals in recent years have included:
Own label is not as well developed as in many European countries but has been a growing feature of the market. Its share in value terms is highest in butter (39%), milk (38%), cooking oils (27%), bread and morning goods (24%), cheese (20%), cakes (18%), dried pasta (13%), sugar confectionery (13%) and savoury snacks (12%). Despite the market’s increasing maturity, in many sectors a period of further growth is expected, driven by rising demand for healthier and more convenient product formats. Increasing manufacturing costs however will push value sales ahead of volume gains. Further increases in value sales are expected to be highest in mineral water, coffee and ice-cream. Consumption of mineral water will continue to grow as per capita rates start to catch up on levels in the western world. Growth in coffee is expected, with market value likely to approach $1 billion by 2012, due to the strong performance of premium instant and roast products. Ice-cream sales (through grocery channels), also influenced by premium varieties, will grow at a similar amount and will also surpass the A$1 billion sales mark by 2012. Predicted growth in the major categories is shown in the figure below.
Further information on LFR Global Food Markets reports
is available from Australian Food Statistics 2008 The recently published Australian Food Statistics 2008 prepared
by the Food and Agriculture Division of the Australian Government Department
of Agriculture Fisheries and Forestry (DAFF) covers the financial year
2007–2008. It contains an Overview by Gayathiri
Bragatheswaran and colleagues from ABARE and Year in Review
by Steve Spencer, Director, Freshlogic, Melbourne. In his foreward, Minister for Agriculture, Fisheries and Forestry Tony Burke highlighted the resilience of the Australian food industry saying, “The food and beverage sector generated total sales and service income from food processing of $79b in 2006–07, an increase of $8b on the previous year. Improved seasonal conditions helped lift the value of food-related farm and fisheries production to $37.4b in 2007–08, an increase of 18% on the previous year.” “I am confident that the Australian food industry is well positioned to meet the challenges and opportunities of the future, including those represented by the global financial crisis. Of course, it is not enough to produce more food – we must create an environment in which Australian produced food can move more freely to where it is wanted and needed, so work to access, establish and maintain overseas markets continues to be a high priority for the Australian Government,” said Mr Burke. In their overview, ABARE highlighted that Australia’s total consumer expenditure on food and liquor continued its rising trend in 2007–08, increasing by 6% to around $113b compared to $106.4b in 2006–07. The market share of total retailing expenditure for food and liquor expenditure decreased slightly (by 0.5%) to 52% in 2007–08. Australia’s total farm and fisheries production increased in value by 18% to $37.4b in 2007–08, with the increase being attributed to a slight rebound in broadacre crop production after the 2006 drought. The value of Australia’s food exports remained largely unchanged at $23.4b. Increases in the value of grains, oilseeds and dairy exports were offset to some extent by a decline in the value of meat, wine and sugar exports. Although the value of Australia’s food imports increased by 10% to $9b, Australia remains a significant net exporter of food, with an export surplus of $14b over food imports in 2007–08. Over the past five years, this surplus has averaged $18b a year. Food exports accounted for only 13% of total Australian merchandise exports in 2007–08, down from nearly 14% in 2006–07 and 16% in 2005–06. This decline in relative importance largely reflects the strong growth in value of Australian minerals and energy resources exports in 2007–08. Australian food industry employment Employee numbers in agricultural food declined by 1% with the biggest reduction occurring in New South Wales (by 9%). Contributors to the decline were the agriculture not fully defined sector and the horticulture and fruit growing sector. Australian food processing Australian food retailing Australian food trade In 2007–08, the value of food exports within the substantially transformed category fell by 6% to $16.5b. This category contributed around 71% of the total value of Australia’s food exports, a 4% fall from 2006–07. In contrast, the value of exports within the minimally and elaborately transformed categories increased by around 19% to $6.6b and 9% to $324m respectively. The grains, meat, wine and dairy products industries have been major contributors to growth in Australia’s food export earnings. Meat exports accounted for 28% of the value of food exports in 2007–08, down from 30.5% for the previous year, while grains increased from 14% to 18%. The value of wine exports has grown from 2% in 1990–91 to 12% currently. The value of dairy products has increased by 5% to 12% over this time. Export earnings from processed seafood, processed fruit and vegetables and sugar have declined. Sugar now only contributes around 4% to the total value of food exports in comparison to 17% in 1990–91. The export value of processed meat was down by 8% to $6.5b, wine down by 7% to $2.7b, cereal food and baking by 23% to $287m, processed fruit and vegetables by 1% to $568m and sugar by 33% to $1b. These decreases were balanced by a 13% increase in the value of dairy exports to $2.8b. Beer and malt increased by 23% to $335m, bakery products up by 5% to $144m and confectionery up by 10% to $237m. The increase in the minimally transformed category was largely driven by higher exports of grains, which were up by around 27% to $4.2b. This follows a 23% decrease the previous year due to lower production levels due to the drought. Other increases in this category were fish or shellfish (up 2% to $647m) and oilseeds (up 107% to $346m), mainly due to increased Australian canola production and world oilseed prices. Over the past 12 months, Australian food imports have increased to $9b, an increase of 10%. Overall, most of the imported goods are substantially and elaborately transformed products. These products accounted for around 95% of the value of imports. The main contributors to this growth were flour mill and cereal (up 47% to $527m), wine (up 36% to $454m), dairy products (37% to $656sm), beverage/malt (14% to $1.8b), fruit and vegetables (13% to $1.4b) and other food (10% to $1.7b). However, some commodities decreased in import value. Oilseeds fell to $49m (down 37%) and seafood fell by 5% to $1.1b. Over the past 17 years the import share of goods such as processed meat, wine, confectionery, bakery products, beer and malt, processed food not elsewhere classified (nec), flour mill and cereal food has increased, whereas live animals (except fish), seafood, oilseeds, processed fruit and vegetables, fish or shellfish, fruit and nuts, unprocessed foods (nec), sugar and spirits have shown a decreasing value. Export/import markets In addition to being able to supply high quality food products to relatively close Pacific Rim markets, Australia has been able to establish a growing presence in more distant markets such as Saudi Arabia and the United Arab Emirates over the past 17 years. The latter has increased its share of exports from 1% in 1990–91 to 5% in 2007–08. Australia has free trade agreements (FTA) with Singapore, Thailand, USA, Chile and more recently ASEAN–New Zealand. The ASEAN–Australia–New Zealand Free Trade Agreement (AANZFTA) is the largest FTA Australia has negotiated. It will provide market access to a region with almost 600 million people. ASEAN is our second largest food market behind Japan. Over the last 12 months, food exports to ASEAN increased from $3.8b to $4.3b, the major commodities being grains ($1.2b) and dairy ($906m) products. Other key commodities are meat, live animals, sugar and beverages and malt. Australia is also negotiating FTA with Malaysia, China, Japan and
the Gulf Cooperation Council countries such as United Arab Emirates
and Bahrain. Australia is the world’s 14th largest food exporter with a 1.8% share of trade value, dropping down from the 13th position in 2006–07. USA is still ranked first with 8.9% of business. Australia is still 27th on the importer list, maintaining a 0.9% share in 2007–08. New Zealand remains the major source of Australia’s food imports, accounting for almost $1.7b of the total value, up from $1.5b 12 months ago. New Zealand accounts for 19% of Australia’s total imports, steadily increasing from 14% in 1990–91. Other countries to increase share over the same period are China, France, Italy, Ireland, Viet Nam and India. Countries to decrease share over the period include Brazil, Canada, Indonesia, Malaysia, Singapore, Spain, the Netherlands, Papua New Guinea, the UK and the USA. The full publication is available in pdf format from www.daff.gov.au/agriculture-food/food.
Supporters Congratulating food
Australia
food Australia – a brief history The first 50 years In 1949, Dr F H Reuter, who was an Associate member of FTA (NSW), suggested that the Association merited a more substantial publication. He was challenged by Frank Bradhurst, first President of FTA (NSW), to ‘produce something better yourself’. By this time other States had formed Food Technology Associations, which had come together in a federal body, the Council of Australian Food Technology Associations (CAFTA). Dr Reuter’s proposal was supported by CAFTA and in August 1949 the first issue of Food Technology in Australia appeared. Dr Reuter remained sole editor for 28 years then continued in the editorial team until 1990. The journal began in modest octavo format until 1966 when it moved up to quarto size. The 21st anniversary issue (1970, 22 August) had 124 pages made up of survey articles that give a comprehensive picture of the Australian food industry at that time. After AIFST was founded in 1967, an accord between CAFTA and AIFST made Food Technology in Australia the official organ of both bodies in 1968, and AIFST was given representation on the Journal Management Committee (JMC). By 1977 Dr Reuter felt the need to share the editorial task and he was joined by Professor Ron Edwards and A/Professors Terry Lee and Ken Buckle. Terry Lee became Editor in July 1980. He modernised the format of the Journal and in January 1981 moved it up to A4 size. When Terry moved on in 1982, Ken Buckle succeeded him and held the position until 1988. In May 1988, Jack Kefford, who was a long-standing member of the JMC, accepted the position of Technical Editor, a position which he still holds today. About this time, the CAFTA Board became concerned about the financial viability of the Journal. In the hope of increasing circulation by appealing to a wider range of readers, they proposed major changes including a change of name to Food Australia. The first issue under this name was September 1988. The changes made did not however improve the situation sufficiently, so in 1989 AIFST became partners with CAFTA in joint publication of the Journal. This arrangement worked very smoothly, and the JMC, chaired alternately by CAFTA and AIFST, and aided by vigorous staff effort to attract advertising, was successful in restoring the Journal to healthy financial status while maintaining its high standing as a technical journal. It was during this time that Mel Malloch, currently AIFST Executive Manager was recruited as Advertising/Journal Manager. In 1995 the formation of the Australian Food Council (now AFGC) led to the winding down of CAFTA, and AIFST became sole owners and publishers of Food Australia from August 1995. In February 1996, Keith Richardson, of Food Science Australia joined the editorial team for a two year period as Features Editor. During this time Keith also made some important recommendations to AIFST with respect to the ongoing editorial management of the Journal, one outcome of which was the creation of the position of Supervising Editor. Dr Barbara Munce, a former AIFST President with association with the journal since 1989, took on this position in January 1998. The next 10 years Each volume is around 600 pages, with some 30 features on almost as many topic areas. In addition we have industry and people news, updates and special reports on issues, trends and ‘hot’ topics between the features, as well as event information and a Diary that continues on-line well into the future. Most issues also contain technical, research or review paper(s) many of which are peer reviewed, plus other authored articles. There are now also three on-line Directories updated twice per year. Four reader surveys have been conducted since 1998. In all of these food Australia has been consistently rated as Good/Excellent by more than 80% of respondents and is the most highly valued benefit of the AIFST membership, who comprise around two-thirds of our circulation. There is also a high retention rate of issues for future reference and a significant pass on rate, which boosts our audited circulation of just over 3000 to a readership of almost 8000. …and beyond As we celebrate our 60th anniversary and approach the second decade of the 21st Century we are again actively planning the future evolution and success of food Australia. This includes a fresh look at our logo/masthead, design and marketing material, a re-evaluation of the role and structure of the food Australia website from commercial, content and user perspectives and the appointment of an Associate Editor. This year we also changed to an Australian made environmentally certified (PEFC) paper and use a printer with a proactive environmental and sustainability program. While not immune to the current global financial situation, food Australia has a good reputation and strong stakeholder base. We are still attracting advertising commitment from both loyal supporters and new clients who see the value in food Australia and in continuing to trade positively through the current economic climate. We thank them for their support. We also acknowledge the other members of the current food Australia and National Office team which brings you the publication each month; viz Advertising Manager Mark Whiskin, Production Officer Ian Macdonald and Admin Asst. Rosanna Silvestro, in addition to the finance and account services from Vicki Wallace, subscription database services from Janet Stanistreet, general office support from Julie Bennett, and the ongoing support of AIFST Executive Manager Mel Malloch and successive AIFST Executives and Councils. Barbara Munce Managing Editor
|
