Australia Food & Drink Report

Published 03 February 2015

  • 132 pages
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Australia Food & Drink Report

BMI View: We hold a below-consensus view on the short-term outlook for Australia's economy, but see opportunities in the food and drink sector. For example, the country's mass grocery retail sector faces some short-term challenges, but we believe it remains a reasonably attractive proposition for industry players. Discount formats in particular demonstrate strong opportunities for growth. We see premiumisation as the main driver of growth in non-carbonated soft-drinks. Meanwhile our low growth forecasts for private consumption have led us to downgrade our expectations for overall food consumption. Per capita consumption will grow even more slowly than the total, reflecting demographic concerns.

Australia's Q314 GDP miss supports our view that full-year real GDP growth will fail to meet consensus expectations and we maintain our forecast of 2.8%. Going into 2015, we continue to see growth slowing further to 2.3%, versus consensus expectations of 2.8%.

High levels of household debt, threats of higher taxes, a softening job market and income outlook, together with possible declines in house prices, lead us to maintain our subdued outlook for private consumption for 2014. As confirmed by the Nielsen research noted below, we continue to see a shift of consumption habits towards private labels in Australia over the coming years, as a growing number of consumers acknowledge private labels as a very compelling alternative to proprietary branded goods.

Headline Industry Data (local currency)

  • 2015 per capita food consumption = +1.0%; forecast 2014 to 2019 = +1.4% compound annual growth rate (CAGR).

  • 2015 soft drinks sales = +2.4%; forecast 2014 to 2019 = +2.7% CAGR.

  • 2015 alcoholic drinks sales = +2.2%; forecast 2014 to 2019 = +2.5% CAGR.

  • 2015 mass grocery retail sales = +3.8%; forecast 2014 to 2019 = +4.3%.

Key Industry Trends And Developments

China and Australia Sign Landmark Free Trade Agreement : In late 2014, China and Australia signed a free trade...

Table of Contents

BMI Industry View
7
SWOT
9
Food
9
Drink
11
Mass Grocery Retail
13
Industry Forecast
15
Consumer Outlook
15
Food
17
Food Consumption
17
Table: Food Consumption Indicators - Historical Data & Forecasts (Australia 2011-2018)
18
Confectionery
18
Table: Confectionery Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Australia 2011-2018)
20
Canned Food
21
Drink
22
Alcoholic Drinks
22
Table: Alcoholic Drinks Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Australia 2013-2018)
24
Hot Drinks
25
Table: Hot Drink Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Australia 2013-2018)
26
Soft Drinks
27
Table: Soft Drinks Sales, Production & Trade (Australia 2013-2018)
28
Mass Grocery Retail
29
Table: Mass Grocery Retail Sales By Format - Historical Data & Forecasts (Australia 2013-2018)
31
Trade
31
Table: Trade Balance - Historical Data & Forecasts (Australia 2013-2018)
33
Macroeconomic Forecast
34
Economic Analysis
34
Chinese Reform Efforts To Weigh On Export Growth
35
Consumption Growth To Slow Further
36
Residential Investment To Fall Short
37
Table: Economic Activity (Australia 2009-2018)
38
Industry Risk Reward Ratings
39
Asia Pacific - Risk/Reward Ratings
39
Table: Asia Pacific Food & Drink Risk/Reward Ratings Q414
40
Table: Asia Pacific Food & Drink Risk/Reward Sub-Factor Ratings Q414 (scores out of 10)
43
Australia - Risk/Reward Index
45
Market Overview
46
Food
46
Food Processing
46
Functional Foods
47
Confectionery
47
Canned Food
48
Drink
48
Alcoholic Drinks
48
Hot Drinks
50
Soft Drinks
51
Mass Grocery Retail
51
Table: Structure Of Mass Grocery Retail Market By Estimated Number of Outlets (Australia 2005-2014)
54
Table: Mass Grocery Retail Sales By Format (Australia 2005-2014)
54
Table: Mass Grocery Retail Sales By Format (Australia 2005-2014)
54
Industry Trends And Developments
55
Food
55
Drink
62
Mass Grocery Retail
66
Competitive Landscape
75
Table: Key Players In Australia's Food & Drink Sector
75
Table: Key Players In Australia's Mass Grocery Retail Sector
75
Company Profile
76
Dairy Farmers
76
Heinz Australia
78
Lion Nathan
81
Carlton & United Breweries
84
Coopers Brewery
88
The Coca Cola Company
90
Table: The Coca-Cola Co Financial Results
97
Aldi
98
Wesfarmers
101
FoodWorks
104
Woolworths
106
Global Industry Overview
109
Table: DOLLAR GENERAL AND FAMILY DOLLAR HISTORIC QUARTERLY SAME-STORE SALES GROWTH (% CHANGE Y-O-Y)
113
Table: SELECT US BEVERAGE COMPANIES - HISTORIC EVA SPREAD
118
Table: Food and Drink Team's Core Views
119
Demographic Forecast
121
Table: Australia's Population By Age Group, 1990-2020 ('000)
122
Table: Australia's Population By Age Group, 1990-2020 (% of total)
123
Table: Australia's Key Population Ratios, 1990-2020
124
Table: Australia's Rural And Urban Population, 1990-2020
124
Glossary
125
Food & Drink
125
Mass Grocery Retail
125
Methodology
127
Industry Forecast Methodology
127
Sector-Specific Methodology
128
Sources
128
Risk/Reward Index Methodology
129
Table: Food & Drink Risk/Reward Index Indicators
130
Table: Weighting
131

The Australia Food & Drink Report features Business Monitor International (BMI)'s market assessment and independent forecasts for food and drink expenditure, consumption, sales, and imports/exports and forecasts for the mass grocery retail sector. The report also includes analyses of major regulatory developments, the background macroeconomic outlook and competitive landscape comparing national and multinational companies by leading products and services, sales, investments, partners and expansion strategies.

BMI's Australia Food & Drink Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the food and drink industry and the mass grocery retail market in Australia.

Key Benefits

  • Benchmark BMI's independent food and drink industry forecasts for Australia to test other views - a key input for successful budgeting and strategic business planning in the Australian food and drink market.
  • Target business opportunities and risks in Australia through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Exploit latest competitive intelligence on your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity) and Competitive Landscape Tables.

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts and views, covering food and drink manufacturing and consumption and the mass grocery retail market.

Industry SWOT Analysis

Analysis of the major strengths, weaknesses, opportunities and threats within the food, drink and mass grocery retail sectors and within the broader political, economic and business environment.

BMI’s Food and Drink Risk Reward Index

BMI’s Risk Reward Index provides investors (food and drink manufacturers and mass grocery retailers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic points. These provide indices of highest to lowest appeal to investors, with each position explained.

Food Forecasts

BMI’s food chapter is divided into sections such as meat, fish, confectionary, dairy and canned foods, and provides insight into each market’s food industry, centred on a forecast to end-2019 for the sector. The chapter includes the following elements:

  • Industry Forecast Scenario: Historical data series and a forecast to end-2019 for growth of key indicators within a market’s food industry. Indicators include food consumption, food consumption as % of GDP, canned food sales, confectionery sales and food and drink imports and exports, among others.
  • Industry Developments: A summary of corporate developments, including news on M&As, FDI, expansions, closures and financial results, in addition to analysis and explanation of the latest industry events and how these could influence further investment.
  • Market Overview: An overview of the structure of the market, introducing the key players and discussing underlying trends.

Drink Forecasts

Segmented the same way as BMI’s food chapter, the drink section provides insight into each market’s drink industry, centred on a forecast to end-2019 for the sector. Forecast indicators include alcoholic and soft drink sales by value, volume and sub-sector and tea and coffee sales, among others.

Mass Grocery Retail Forecasts

Segmented the same way as BMI’s food and drink chapters, the mass grocery retail section provides insight into each market’s grocery retail industry, centred on a forecast to end-2019 for the sector. Forecast indicators include mass grocery retail sales by format (including supermarkets, hypermarkets, convenience and discount stores) and a breakdown of the organised retail sector versus the traditional sector, among others.

Competitive Landscape

Illustration of the mass grocery retail and food and drink industries via rankings tables comparing revenues, number of outlets and number of employees. This chapter also includes data-rich, in-depth regional analysis of the market position, business strategies and investment potential of the region’s leading mass grocery retail and food and drink operators.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Food & Drink reports draw on an extensive network primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc