Market Overview – Australia

May 2019

Market snapshot

Australia is the thirteenth largest economy with a gross domestic product (GDP) valued at US$1.3 trillion in 2017.

Australia is one of the wealthiest countries in the world, ranking third in terms of average household disposable income (US$76,556.1) in 2017, behind Switzerland and the United States.

The wealth gap is relatively high and growing, with the lowest income group accounting for 31.0% of the population in 2017. This is driving demand both for budget goods and discount retailers, and for premium and luxury products.

Packaged food sales were valued at US$34.9 billion in 2017, and are anticipated to reach US$42.1 billion by 2022. The top packaged food company in Australia in 2017 was Kirin Holdings with a 3.7% retail value share, followed by  Mondelez International Inc. (3.5%) and Lactalis Groupe  (3.0%).

Australia's annual consumer expenditure per capita increased to US$32,526.1 in 2017, compared with US$31,778.4 in 2016.

Australian consumers are looking more for fresh-food and products that they perceive to be "natural" and minimally processed as a feature (up from 35% in 2016) and 26%, indicating that they would be willing to pay more for free range products (up from 22% in 2016). If Canadian exporters are able to meet the stringent conditions to export to Australia, this also resonates well with other markets within Asia.

Production

Sugar cane is the most popular crop in Australia and the production has increased by a compound annual growth rate (CAGR) of 7.1% since 2012. Nevertheless, wheat is widely recognised in Australia as being the most important crop since sugar cane has been cut for crushing rather than for usage of the sugar that can be extracted from this sugar cane.

Among the top 10 crops growing in Australia, production of chickpeas and barley increased the most over the 2012-2017 period, with a CAGR of 24.4% and 10.3%, respectively. From 2016 to 2017, chickpeas production registered a growth of 129.1% from its initial volume.

Crop production in Australia 2012-2017
Top 10 crops (tonnes) 2012 2013 2014 2015 2016 2017 CAGR* % 2012-2017
Sugar cane 25,957,093 27,136,082 30,517,650 32,379,153 34,403,004 36,507,000 7.1
Wheat 29,905,009 22,855,576 25,303,037 23,742,560 22,274,514 35,009,000 3.2
Barley 8,220,863 7,471,592 9,174,417 8,646,321 8,992,274 13,414,000 10.3
Rapeseed 3,427,294 4,141,731 3,832,049 3,470,000 2,944,000 4,136,000 3.8
Chickpeas 673,371 813,300 629,400 555,400 874,593 2,004,000 24.4
Oats 1,262,032 1,121,135 1,254,659 1,198,006 1,299,680 1,873,000 8.2
Potatoes 1,288,186 1,273,243 1,171,259 1,154,503 1,130,175 1,295,000 0.1
Sorghum 2,238,912 2,229,709 1,282,042 2,209,173 1,790,574 1,017,000 −14.6
Grapes 1,656,621 1,762,572 1,557,362 1,728,759 1,772,911 N/A 1.7
Seed cotton 2,956,632 2,456,000 2,136,700 1,274,100 1,518,678 N/A −15.3

Source: ABARES, 2018

*CAGR: Compound Annual Growth Rate

N/A: Not available

Meat production in Australia 2012-2017
Top meat (tonnes) 2012 2013 2014 2015 2016 2017 CAGR* % 2012-2017
Cattle 2,295,338 2,480,458 2,595,000 2,547,000 2,125,000 2,149,000 −2.8
Chicken 1,039,048 2,295,338 1, 103,000 1,137,000 1,225,000 1,220,000 −11.9
Sheep 606,376 703,732 N/A N/A N/A N/A 16.1

Source: ABARES, 2018

*CAGR: Compound Annual Growth Rate

N/A: Not available

Livestock production in Australia 2012-2016
Top livestock (head) 2012 2013 2014 2015 2016 CAGR* % 2012-2016
Cattle 2,152,031 2,359,064 2,595,149 2,661,640 2,360,756 2.3
Chicken 1,046,748 1,066,506 1,103,069 1,115,543 1,179,554 3.0
Sheep 554,434 660,437 720,600 721,053 678,812 5.2

Source: United States Department of Agriculture (USDA), 2018

*CAGR: Compound Annual Growth Rate

Trade

Australia is a net exporter of agri-food and seafood products. In 2017, Australia's agri-food and seafood trade surplus was US$22.6 billion with exports valued at US$38.1 billion, and imports of US$15.5 billion. Australia is an efficient producer of a range of agricultural commodities and exports around 60.0% of its agricultural production. Australia's agri-food and seafood imports grew at a CAGR of 1.4% between 2013 and 2017.

Australia's top agri-food and seafood imports in 2017 were food preparations, cigarettes, frozen pork, bakery goods and cheese. Key supplying countries were New Zealand, United States, China, Thailand and Italy. Canada was Australia's 20th largest supplier of agri-food and seafood products in 2017, with a 1.1% share.

Australia's top agri-food and seafood imports from the world, 2017
Commodity Import value US$ millions Top suppliers and market share % Canada's share %
1 2 3
Food preparations 939.0 Singapore: 29.6 New Zealand: 20.8 United States: 12.7 0.8
Cigarettes 600.5 New Zealand: 52.1 Rep. of Korea: 18.4 Singapore: 11.7 0.0
Frozen meat of swine 467.5 United States: 37.7 Denmark: 28.0 Netherlands: 17.2 10.2
Bakery goods 439.7 New Zealand: 16.6 United Kingdom: 9.8 Malaysia: 8.5 1.1
Cheese (excluding fresh) 367.5 New Zealand: 46.4 United States: 10.5 Italy: 8.4 0.0
Wine of fresh grapes 357.2 New Zealand: 58.3 France: 17.6 Italy: 10.3 0.0
Oilcake 323.5 Argentina: 99.5 United States: 0.2 China: 0.2 0.0
Coffee 321.7 Brazil: 19.2 Colombia: 13.7 Papua New Guinea: 9.4 0.1
Beer 313.7 Mexico: 36.5 Netherlands: 8.3 Germany: 7.8 0.3
Food preparation for infants 311.0 New Zealand: 87.5 Netherlands: 5.9 France: 3.2 0.0
Source: Global Trade Tracker, 2018

Australia's processed food and beverage imports were valued at US$11.8 billion in 2017, with Canada accounting for 1.2% of that total. New Zealand, the United States, Thailand, China and Italy were the largest suppliers of processed food to Australia in 2017, accounting for 46.9% of the market. Australia's processed food imports increased by a CAGR of 1.4% between 2013 and 2017.

Canada's agri-food and seafood exports to Australia were valued at US$173.7 million in 2017. Top exports were frozen pork, maple sugar, whisky and frozen fruit and nuts. In 2017, Canada registered an agri-food and seafood trade deficit of US$205.4 million with Australia (Canada imported US$379.1 million worth of agri-food and seafood from Australia in 2017).

Retail sales

Australia is the 14th largest packaged food market in the world and this sector grew by 3.3% in current value from the 2013-2017 period. This, sector is seeing steady growth, a trend that is expected to continue over the coming years. Retail sales were valued at US$34.9 billion in 2017, with a CAGR of 3.3%. By 2022, retail sales are expected to reach US$45.1 billion, registering stronger growth of 4.0%.

Baby food is expected to see the most significant sales growth in the packaged food sector over the 2018-2022 forecast period. Sales of ready meals are also expected to be among the better performers over the forecast period. Examples of popular products in this subsector are prepared foods sold at supermarkets and takeout meals sold at specialty store chain operators, etc. Consumers are increasingly shifting to minimally processed packaged foods, while also focusing on fresh foods due to rising health concerns. Growth in this category is closely linked to many consumer groups, particularly millennials, who are looking for convenience, and food that can be eaten as a snack or is easy to prepare.

Packaged food retail sales in Australia, historic in US$ millions, fixed 2017 exchange rate
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Packaged food 30,638.6 32,082.7 33,054.7 33,885.0 34,869.2 3.3
Cooking ingredients and meals 4,253.5 4,446.0 4,647.2 4,789.6 4,945.9 3.8
Edible oils 368.3 364.3 391.6 406.3 422.0 3.5
Ready meals 1,297.2 1,419.1 1,516.6 1,605.4 1,702.0 7.0
Sauces, dressings and condiments 1,907.9 1,943.3 1,982.8 2,020.2 2,066.9 2.0
Soup 309.0 315.4 325.3 318.3 312.1 0.2
Sweet spreads 370.9 404.0 431.0 439.5 443.0 4.5
Dairy products and alternatives 8,248.0 8,655.2 8,916.0 9,134.7 9,378.8 3.3
Baby food 445.6 494.9 588.3 662.9 749.5 13.9
Dairy 7,802.3 8,160.3 8,327.7 8,471.8 8,629.4 2.6
Snacks 8,323.5 8,812.1 9,156.4 9,426.6 9,786.9 4.1
Confectionery 2,921.7 3,061.3 3,151.6 3,226.1 3,327.9 3.3
Ice cream and frozen desserts 1,588.9 1,763.2 1,818.3 1,898.2 1,986.8 5.7
Savoury snacks 2,230.0 2,351.5 2,490.7 2,566.4 2,697.4 4.9
Sweet biscuits, snack bars and fruit 1,582.9 1,636.0 1,695.8 1,735.9 1,774.8 2.9
Staple foods 9,813.7 10,169.4 10,335.1 10,534.1 10,757.5 2.3
Baked goods 4,365.3 4,622.1 4,714.7 4,829.8 4,988.1 3.4
Breakfast cereals 941.0 953.2 963.1 976.4 986.6 1.2
Processed fruit and vegetables 1,328.6 1,355.6 1,343.3 1,348.7 1,351.5 0.4
Processed meat and seafood 2,422.6 2,465.0 2,522.7 2,563.6 2,589.2 1.7
Rice, pasta and noodles 756.3 773.5 791.2 815.6 842.2 2.7

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Packaged food retail sales in Australia, forecast in US$ millions, fixed 2017 exchange rate
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Packaged food 35,979.4 37,314.4 38,794.9 40,380.4 42,052.1 4.0
Cooking ingredients and meals 5,127.4 5,327.5 5,537.7 5,760.0 5,988.3 4.0
Edible oils 438.6 455.6 472.7 491.6 512.0 3.9
Ready meals 1,810.8 1,927.4 2,051.4 2,181.2 2,314.8 6.3
Sauces, dressings and condiments 2,121.2 2,180.0 2,242.9 2,307.8 2,375.8 2.9
Soup 304.7 303.2 300.8 298.0 294.5 −0.8
Sweet spreads 452.0 461.3 470.0 481.3 491.2 2.1
Dairy products and alternatives 9,621.1 9,979.7 10,420.5 10,907.6 11,438.5 4.4
Baby food 834.4 917.6 991.7 1,063.5 1,129.2 7.9
Dairy 8,786.7 9,062.1 9,428.8 9,844.1 10,309.3 4.1
Snacks 10,208.2 10,666.3 11,167.8 11,703.0 12,267.5 4.7
Confectionery 3,451.1 3,595.5 3,767.0 3,955.8 4,160.6 4.8
Ice cream and frozen desserts 2,084.6 2,197.6 2,317.8 2,444.8 2,580.7 5.5
Savoury snacks 2,844.4 2,990.6 3,136.8 3,288.6 3,441.5 4.9
Sweet biscuits, snack bars and fruit 1,828.1 1,882.4 1,946.2 2,013.8 2,084.8 3.3
Staple foods 11,022.7 11,340.9 11,668.8 12,009.9 12,357.8 2.9
Baked goods 5,163.3 5,348.7 5,532.0 5,715.8 5,894.4 3.4
Breakfast cereals 999.3 1,025.2 1,054.6 1,087.5 1,124.3 3.0
Processed fruit and vegetables 1,365.4 1,379.8 1,395.2 1,411.6 1,429.0 1.1
Processed meat and seafood 2,624.7 2,683.6 2,749.6 2,825.1 2,908.8 2.6
Rice, pasta and noodles 870.1 903.6 937.4 969.8 1,001.4 3.6

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Health and wellness food products

The health and wellness sector grew by a CAGR of 3.3% from 2013 to 2017 and is expected to grow by a CAGR of 4.3% over the 2018-2022 period. Consumers have lately been paying closer attention to environmental issues, thus driving demand for organic, free range and ethically traded products.

Free-from products and fortified/functional foods showed the largest growth in the 2013-2017 and will lead the way over the next five years.

Health and wellness food product retail sales in Australia, historic in US$ millions, fixed 2017 exchange rate
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Health and wellness by type 10,675.0 11,046.6 11,480.6 11,762.1 12,133.0 3.3
Better for you (BFY) 2,399.4 2,403.9 2,403.4 2,355.5 2,345.2 −0.6
Fortified/functional (FF) 3,399.9 3,518.3 3,733.5 3,884.9 4,065.7 4.6
Free from 441.0 553.4 617.4 673.3 720.1 13.0
Naturally healthy (NH) 3,975.9 4,021.5 4,111.3 4,206.8 4,322.3 2.1
Organic 458.9 549.4 615.1 641.7 679.7 10.3

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Health and wellness food product retail sales in Australia, forecast in US$ millions, fixed 2017 exchange rate
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Health and wellness by type 12,568.5 13,068.7 13,613.6 14,210.6 14,852.5 4.3
Better for you (BFY) 2,350.5 2,344.5 2,347.5 2,353.6 2,358.5 0.1
Fortified/functional (FF) 4,241.8 4,458.6 4,689.8 4,931.9 5,182.7 5.1
Free from 773.2 827.7 885.8 946.4 1,008.8 6.9
Naturally healthy (NH) 4,484.2 4,675.2 4,883.7 5,124.2 5,399.8 4.8
Organic 718.9 762.6 806.8 854.5 902.7 5.9

Source: Euromonitor International, 2018

*CAGR: Compound Annual Growth Rate

Opportunities for Canada

On March 8, 2018, Canada signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with 10 countries: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Canada ratified the CPTPP on 29 October 2018 and represents a significant step toward closer trade and investment between Canada and Australia. Some gains are now possible for Canadian producers, who could gain market share in economies such as Australia. The CPTPP provides Canada with greater market access to CPTPP countries with the same level of tariffs as major regional competitors like Australia. To obtain more information on key facts and figures regarding Canada-Australian trade opportunities under this agreement see CPTPP partner: Australia.

The CPTPP will establish duty-free access for trade in goods between Canada and Australia, eliminating tariffs of 5% upon entry into force for key Canadian exports including:

The CPTPP also represents good opportunities for the Australian demand for natural, organic and functional foods. Sales of organic products have expanded by 15% annually in the recent years. In addition, Canadian seafood exports have doubled over the past five years.

The CPTPP Agreement, along with the Canada-United States-Mexico agreement (CUSMA) and other free trade agreements with the European Union (CETA), will make Canada the only G7 nation with free trade access to the Americas, Europe and the Asia-Pacific region. All Canadian provinces and territories are expected to benefit from the CPTPP.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

Resources

Market Overview – Australia
Global Analysis Report

Prepared by: Nesrine Benmoussa, Co-op Student

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2019).

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