31 May 2012

3 minute read

Oceania

MLA General Manager International Markets and Economic Services, Dr Peter Barnard, addressed a session at Beef Australia 2012 on the future prospects and competition in global markets.

In it, he predicted that while traditional markets will remain important, future growth would be in a more diverse range of destination countries, particularly in emerging Asian markets such as China, the Philippines, Malaysia and Indonesia.

"There are now more markets than ever before and we will see an explosion of new markets into the future," Dr Barnard said.

In 1955, 80 per cent of Australia’s beef exports went to the United Kingdom. Last year 70 per cent went to three countries – Japan, the United States and Korea – and 30 per cent went to other markets including Southeast Asia/China, Russia/Eastern Europe and the Middle East.

"The outlook for the Australian beef industry is for a more diversified set of export destinations but growth will be concentrated in Asia,” he said.

"Over the next decade, growth in urban Asia will equal the total current size of the American population. Food consumption in Asia is expected to double by 2020.”

“They will be young, increasingly affluent and westernised, and be eating a lot more beef," he said.

And they are more likely to be buying it from global retail and foodservice outlets – with global brands such as WalMart, Carrefour, McDonalds and Yum! planning aggressive expansion in Asian markets.

While protein consumption is relatively low – with only 4kg cwt/person consumed in China and the Philippines for example – it increases as incomes rise. These rising incomes mean more people can afford high quality Australian beef.

"Although Australian beef is more expensive than product from India, for example, in Asia it is considered prestigious and we can compete on service and quality,” Dr Barnard said.

These are important advantages to Australian product, with around 70 per cent of Chinese consumers rating food safety as more important or much more important than price.

"Not only are we exporting product to a more diverse range of country markets, but there are markets, within markets,” Dr Barnard said.

“Consumer and trade segmentation is occurring at finer and finer levels.”

Tesco supermarkets, for example, segment their customers by those who prefer to purchase based on finer foods (16 per cent), healthy (10 per cent), convenience (21 per cent), traditional (11 per cent), mainstream (25 per cent) and price sensitive (17per cent).

To properly target these increasingly finer consumer and trade segments, supply chain coordination will become increasingly important.

“Genetic selection is an important strategy to efficiently and consistently meet these consumer and trade segments,” Dr Barnard said.

"More than ever before genetic selection at farm level will be influenced by the local circumstances in the particular markets producers are targeting.”

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