Market Overview – Australia

Production

Australia's agricultural output is heavily influenced by seasonal conditions. Considerable rainfall in particular year has resulted in exceptional crop production while drought has been a key factor in decrease of production during some years.

Sugar cane^{Footnote 1} is the most produced crop in Australia. Its production has increased by a CAGR of 2.4%. However, chick peas is the crop whose production substantially increased as its CAGR indicate. Conversely, production of wheat and oats decreased while the production of barley, potatoes and rapeseed stagnated.

Production of meat stagnated during over the 2014-2018 period. While production of chicken increased by a CAGR of 2.0%, the CAGR of cattle meat production decreased by 3.8% during the 2014-2018 period. During this same period, livestock production generally decreased, except for the number of pigs which increased by a CAGR of 2.0%.

Trade

Australia is a net exporter of agri-food and seafood products. In 2019, Australia's agri-food and seafood trade surplus was US$17.9 billion with exports valued at US$34.5 billion and imports of US$16.6 billion.

Food preparations, cigarettes, frozen meat of swine and bakery goods were the top agri-food and seafood products imported by Australia in 2019. Key supplying countries included New Zealand, the United States, China, Thailand and Italy.

In 2019, Canada's agri-food and seafood product exports to Australia were valued at US$291.4 million. The top three commodities that Canada exported to Australia were wheat and meslin, frozen meat of swine and maple sugar & maple syrup.

Export

Various types of meat, wheat and meslin, wool and wine of grapes were among the top agri-food and seafood products exported by Australia in 2019. The top countries Australia exported to were the United States, China, Japan and the South Korea.

In 2019, Australia agri-food and seafood product exports to Canada were valued at US$363.9 million. The top three commodities that Australia exported to Canada were wine of fresh grapes, cuts of sheep and meat of bovine animals.

Retail sales

Australia is the 16th largest food market in the world. Food retail sales were valued at US$51.7 billion, with a CAGR of 4.8% over the 2016-2019 period. The meat (US$15.4 billion) and the bakery/cereals (US$ 8.5 billion) categories had the largest retail sales value in 2019. These categories had a CAGR of 4.5% and 5.3% respectively for the 2016-2019 period. The categories that registered the highest CAGR growth during the 2016-2019 were meat substitutes and prepared meals with a CAGR of 6.9% and 6.7%, respectively.

A growth in retail food sales is expected at a CAGR of 2.9% over the 2020-2023 period. By 2023, retail sales are expected to reach US$57.9 billion with meat and bakery & cereals expected to remain the dominant categories. Prepared meals are expected to register the highest CAGR (5.0%) followed by meat substitutes, syrups/spreads and savory/deli foods, all expected to register a CAGR of 4.9% each.

According the Australian Bureau of Statistics, the influx of migrants plays a major role in the country's population growth. This will drive the demand for ethnically diverse products and ingredients in the Australian food market.

Health and wellness food products

The health and wellness sector grew by a CAGR of 2.8% from 2016 to 2019 and is expected to grow by a CAGR of 1% over the 2020-2023 period. Functional/fortified products and food minus foods showed the largest growth in the 2016-2019 period. Functional/fortified products will continue to lead the way over the 2020-2023 period.

Foodservice profile

In 2019, the Australian restaurant food service sector was dominated by the quick service restaurant & fast food channels with sales valued at US$4.8 billion. This represents 33.7% of the share, followed by full service restaurants valued at US$4.2 billion (29.8%).

The majority of revenue in all restaurant channels is attributable to independent operators and dine-in transactions. In 2019, full service restaurants dominated independent operators' revenues, whereas chain operators generated the majority of their revenue from the quick service restaurant & fast food channels. Chain operators' revenues are expected to grow at a CAGR of 2.3% and reach US$24.8 billion in 2020. Independent operators are forecast to see a CAGR of 2.2% and revenues of US$36.6 billion by 2023. The majority of dine-in transactions took place in full service restaurants while quick service restaurant & fast food dominated in terms of transaction volume in the take-away sector. Growth for both dine-in and take-away transactions are expected to continue at a CAGR of 1.8% and 3.7%; to reach US$47.9 billion and US$15.5 billion, respectively in 2023.

Opportunities for Canada

Australia was Canada's sixteenth trading partner in 2019. Additionally, Canada was Australia's fourtheenth largest supplier of agrifood and seafood products in 2019, representing 1.7% market share.

CPTPP entered into force for Canada and Australia on December 30^th, 2018. Canada's exports of agrifood and seafood products to Australia were valued at US$291.4 million in 2019, compared to US$142.6 million in 2018, a growth change of 104%.

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 agricultural product exports, including the following commodities:

• Wheat
• Breads, cookies and other baked goods

The CPTPP also represents good opportunities for the Australian demand for premium, quality and innovative products. In addition, Canadian seafood exports have doubled over the past five years. Furthermore, Australia's harvest of wheat has been significantly reduced due to drought which presents a great opportunity for Canadian wheat producers to export their products to Australia.

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.

• Overview of Trade Commissioner Services in Australia
• Find a Trade Commissioner

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

For additional information on Food and Hotel Asia 2020, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and agri-food Canada
ben.berry@canada.ca

Market Overview – Australia
Global Analysis Report

Prepared by: Saidouba Camara

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2020).

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