With job market weakness finally showing up in Australia's headline unemployment rate, we believe that private consumption growth will show significant weakness in 2014. The soft job market will weigh on wage growth, and together with high levels of household debt - at 94.4% of GDP as of end-2013 - households could begin deleveraging. While we project private consumption growth to slow to 1.3% in 2014, from an estimated 1.5% in 2013, we highlight that there is a possibility that if the global environment weakens significantly, there could be even greater job cuts, which would very likely lead to an overall contraction in private consumption. As a result, 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)
2014 per capita food consumption = +0.7%; forecast to 2018 = +1.3% compound annual growth rate (CAGR).
2014 soft drinks sales = +2.1%; forecast to 2018 = +2.6% CAGR.
2014 alcoholic drinks sales = +1.9%; forecast to 2018 = +2.4% CAGR.
2014 mass grocery retail sales = +3.4%; forecast to 2018 = +4.1%.
Key Industry Trends And Developments
Parmalat Strengthens Australian Position: Italian dairy giant Parmalat announced in April that it completed the acquisition of Australian dairy and juice manufacturer Harvey Fresh. The company, owned by French dairy firm Lactalis, indicated that its local subsidiary would pay EUR79mn (USD109mn) for the Western Australia-based company. Harvey Fresh had turnover of around EUR113mn (USD156mn) in its last financial year and manufactures fresh milk, UHT milk, flavoured milk, cream, yoghurt, cheese and fruit juice.
GE Capital Finances Accolade Wines: Australia-based drinks producer Accolade Wines has received a USD300mn cross-border finance facility from US-based GE Capital in a move to recapitalise its...
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.
- 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.
BMI Industry View
Summary of BMI's key industry forecasts, and views, covering food and drink manufacturing and consumption and the retail market.
Business Environment Rankings
BMI's Food & Drink Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors, food and drink manufacturers and mass grocery retailers.
The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.
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 chapter is divided into sections such as Meat, Fish, Confectionary, Dairy and Canned Foods, and provides insight into a market's food industry, centred on a forecast to end-2018 for the sector. The chapter includes the following elements:
Industry Forecast Scenario - Historical data series and forecasts to end-2018 for growth of key indicators within a market's food industry. Including 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.
Segmented the same way as BMI's food chapter, the drink section provides insight into the market's drink industry, centred on a forecast to end-2018 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 a market's grocery retail industry, centred on a forecast to end-201 for the sector. Forecast indicators include mass grocery retail sales by format (including supermarkets, hypermarkets, convenience and discount stores) and a breakdown for the organised retail sector versus the traditional sector, among others.
Competitive Landscape & Profiles
Illustration of the industry via rankings tables comparing revenues, number of outlets and number of employees. BMI analyses each company's market position, business strategies and investment potential.