Changing consumption trends in Australia creating growth opportunities for Export focused Food and Drink Businesses

This week the Australian Bureau of Statistics (ABS) published their latest report on changing consumer consumption habits through the report Apparent Consumption of Selected Foodstuffs, Australia. This report based on experimental data estimates the apparent consumption per capita of selected foods based on sales of products in Australia, provides an important data point on high growth categories, the changing habits on Australian consumers and creates valuable insights for Food and Drink businesses targeting strategic growth in the Australian market. The data compares the 2022-23 Financial year to 2023-24 and reports as a % change. (the data does not include fast food outlets or institutional catering purchased outside of the major supermarkets)

Top line summary.

Australians consumed over 15m tonnes of food and nonalcoholic drink in this period, equating to around 1.5kg per person per day a 3.5% increase.

• Meat consumption grew with an increase across Beef, lamb and pork of 3.7%, and total consumption rising by over 1kg to 19kg per person or 52g per day.
• Poultry consumption continued to experience strong growth 3.5% as primary poultry and 3.3% in were used as a main inclusion in prepared products (i.e. nuggets or ready meals)
• Whilst snacking continued to grow, salty snacks grew by ~10% vs chocolate and sugary snacks that both declined.
• Sausages declined 1.6% alongside processed meats 3.4% also declining

5 Year trend across leading food Groups

1. Grams per capita, per day.

Winners

Between 2022-23 and 2023-24, the greatest percentage increases in consumption by weight (per capita per day) among the major food groups were:

• Snack foods (up 0.7 grams to 15.6 grams, a 4.7% increase)
• Seed and nut products (up 0.7 grams to 16.2 grams, a 4.5% increase)
• Egg products (up 0.7 grams to 19.5 grams per capita, a 3.7% increase).

Losers

The major food groups with the greatest decreases in consumption by weight per capita per day were:

• Cereal based products (down 1.4 grams to 63 grams, a 2.2% fall)
• Confectionery (down 1.2 grams to 29.2 grams, a 3.9% fall)
• Fats and oils (down 0.9 grams to 20.4 grams, a 4.2% fall).

The greatest percentage decline in consumption over the year to June 2024 was for soup, which fell 13% (0.6 gram) to 4.0 gram per capita per day.

Annual change % major food Groups

1. Selected major food groups from the AUSNUT 2011-13 classification.

The opportunity

The report reinforces the growth in key categories including sports drinks, hydration solutions, water and nonalcoholic alternatives as consumers reduce consumption of fruit or vegetable-based juices.

The recognition that snacking continues to be a regular part of the meal occasion and area of innovation. Alongside the challenges in cocoa pricing influencing chocolate-based snacks it demonstrates the need for alternative innovative snacking solution to inspire consumers in the supermarket snacking aisles.

(Bottled water continues to experience high demand alongside the challenges of packaging sustainability)

Reviewing the report it also in our view, raises questions about the categories that have shown the declines such as soups, or cereal/muesli bars how much has this been influenced by the lack of innovation or newness in the market and the size of the opportunity that creates for UK food and drink businesses with proven or innovative solutions winning in these areas in alternative markets.

Additionally, the strong growth of Coconut water with a 20% increase.

With sausages and processed meats showing a decline in our view, it could be an early indication that the focus on Ultra Processed Foods (UPFs) is starting to be a consideration for some Australian consumers during their grocery shop,

When deciding where to sell your products it is however vital to understand your target customers’ journey and where they shop to help identify the optimal retailer or channel and the targeted country for your export success. Ultimately success is about understanding your customer and their shopper journey then identifying where your target audience shop and the size of the prize.  Engaging an in-market specialist with “Boots on the ground” will accelerate this process based on their in-depth understanding of the local market, competitive dynamics and retailers’ strengths or strategies. It’s becoming essential to understand your USP (Unique Selling Point) vs the current competition to help the buyer and ultimately the consumer recognise your product offer.

Australia is becoming increasingly important to Food and Drink exporters made more attractive on the back of the latest Free Trade Agreement. With its well-established retail market, 2 major retailers representing over 65% of the grocery market, 4 retailers combined to represent over 80% there is a clear route to market providing access to over 26m people. Global trends tend to be reflected in the market slightly slower than the UK, so the product advantages are clear.

Researching the market is important either directly or through an in-market specialist as Australia presents its own challenges, a country 2.5 x the size of Europe, 3 days by rail to traverse from Sydney to Perth and the natural challenges of high temperatures. These challenges require a clear supply chain strategy to manage and can result in localised contract manufacturing to maximise the outcomes.

With only one opportunity to introduce a new brand into a market sometimes targeting the premium retailers, where you initially sell fewer units but at a higher price point can be more effective than the volume of mainstream retailing where you could enter at a lower price. Achieve success and popularity with the premium offer resulting in a mainstream listing

In summary, export opportunities are increasing for trusted products and manufacturers with the necessary food safety and ethical accreditations, success is determined by demonstrating a clear understanding of the customer, the competitive landscape, targeting the right retailer and ensuring an effective supply chain to achieve the sales opportunity. Engaging an in-market specialist can accelerate market insights, support your business through capability building and help navigate local compliance or regulatory considerations.

Winning a listing with an Australian retailer is today just the start of the journey, as soon as the products arrive on shelf, your competition are looking to take your place. Ensuring that your supply chain is robust and agile enough to meet the demands of your customer are crucial alongside having in country representation to monitor your business, understand availability challenges, changing strategies from competing brands and build your relationship with the category managers for longer term success.

Prof. Consulting Group

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