Australia Food and Drink Report Q1 2013

We expect households to cut back and increase saving during the first half of 2013. As declining house prices increase the pressure on households to cut back on expenditures, companies’ profits are likely to see similar declines. In turn, we expect the headline unemployment rate to increase. A prolonged housing price correction will largely dictate consumption trends over the coming quarters, forcing consumers to rein in their spending on higher-value items. The heightened cautious spending mood among local consumers is expected to filter through to higher demand for private label products as consumers turn their heads to cheaper options. Even if economic conditions take a turn for the better, the shift of consumption habits towards private labels in Australia is likely to remain firmly entrenched 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)

?? 2013 per capita food consumption = +1.2%; forecast to 2017 = +7.2%. ?? 2013 soft drinks value sales = +1.6%; forecast to 2017 = +13.0%. ?? 2013 alcoholic drinks value sales = +1.6%; forecast to 2017 = +12.0%. ?? 2013 mass grocery retail sales = +3.2%; forecast to 2017 = +23.0%.

Key Industry Trends Wesfarmers Successfully Navigating Difficult Environment: In August 2012, Australian retail conglomerate Wesfarmers posted strong results for its latest fiscal year despite concerns about the prevailing strength of the underlying economy. For the 12 months to the end of June 2012, the firm registered revenue growth of 5.8% to AUD58.1bn. This included 6.4% growth at its Coles supermarket business, 11.3% growth at its convenience store network and 5.1% growth at its food and liquor unit. CIC To Invest In Australian Dairy Sector: In September 2012, Chinese-government owned China Investment Corporation (CIC) revealed it is looking to invest in the dairy sector in Tasmania in Australia. The investment comes as China, which is one of Australia's leading trade partners, aims to secure its food supplies, including dairy production, to feed its population by encouraging its firms to expand overseas. CIC is looking to invest in dairy firms in Australia and inspected two dairy farms in Tasmania, according to Australian media. Australia's Foreign Investment Review Board, which looks at all proposed investments from state-owned enterprises, will examine any proposal made by CIC. Risks To Outlook: A slowdown in China presents risks to Australian export growth, given that on average 27% of total exports are bought by the Chinese. If we include exports to other countries that equally have huge exposures to China, the figure rises to 47%, up from just 32% in 2000. With a large proportion of Australian exports reliant on the continual growth in Chinese infrastructure, export growth is likely to continue to fall. Indeed, the external environment continues to weaken, with the slowdown in the Chinese economy threatening to blow out hopes of greater export demand.

Table of contents

Chapter 1 - BMI Industry View

Chapter 2 - SWOT Analysis

Australia Food SWOT

Australia Drink SWOT

Australia Mass Grocery Retail SWOT

Chapter 3 - Business Environment

BMI’s Core Global Industry Views

Table: Core Views

Asia Pacific Food & Drink Risk/Reward Ratings

Table: Food & Drink Risk/Reward Sub-Factor Ratings, Q (score out of )

Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q

Australia Food & Drink Risk/Rewards Rating

Macroeconomic Outlook

Table: Economic Activity, -

Chapter 4 - Industry Forecast Scenario

Consumer Outlook

Food

Food Consumption

Table: Food Consumption Indicators – Historical Data & Forecasts, -

Confectionery

Table: Confectionery Value/Volume Sales – Historical Data & Forecasts, -

Canned Food

Table: Canned Food Value/Volume Sales – Historical Data & Forecasts, -

Functional Food

Table: Functional Food Value Sales – Historical Data & Forecasts, -

Trade

Table: Food & Drink Trade Indicators – Historical Data & Forecasts, -

Drink

Alcoholic Drinks

Table: Alcoholic Drinks Value/Volume Sales – Historical Data & Forecasts, -

Hot Drinks

Table: Hot Drinks Value Sales – Historical Data & Forecasts, -

Soft Drinks

Table: Soft Drinks Value/Volume Sales – Historical Data & Forecasts, -

Mass Grocery Retail

Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts, -

Chapter 5 - Food

Key Industry Trends And Developments

CIC To Invest In Australian Dairy Sector

Waning Appetite For The Big Mac

Food Industry Faces Bleak Times

Consolidation In Australian Dairy Sector To Intensify

Ebro’s Failed Acquisition Of SunRice Disappointing For Both Parties

Australia Still Holds Attraction For Regional Food Players

Riding On The Health Awareness Trend

Market Overview

Food Processing

Functional Foods

Confectionery

Canned Food

Trade

Agriculture

Organic Farming

Chapter 6 - Drink

Key Industry Trends And Developments

SABMiller Volumes Down In Australia

Distribution Partnerships To Facilitate CCA's Alcohol Ambitions

Coopers’ Acquisition Offers Cross-Distribution Opportunities

CCA Could Lean On Indonesia To Mitigate Near Term Domestic Headwinds

Asia The Antidote To Australia’s Wine Woes

Developed Market Potential Firmly In The Sights Of Regional Players

Growing Health Awareness Prompts Shifts In Production/Consumption Habits

Market Overview

Alcoholic Drinks

Beer

Wine

Hot Drinks

Soft Drinks

Chapter 7 - Mass Grocery Retail

Key Industry Trends And Developments

Online Retailing To Grow In Near Term

Costco Details Expansion Plans

Australian Shoppers Turning To Private Labels

Woolworths Taking Positive Steps Towards Securing its Domestic Foothold

Shaky Fundamentals Prompt Aldi’s Expansion Move

Challenging Year So Far For Metcash

Metcash Succeeds In Bid For Franklins

Market Overview

Leading MGR Players

Table: Structure Of MGR Sector – Estimated Number Of Outlets

Table: Structure Of MGR Sector – Sales By Format (AUDbn)

Table: Value Of Sales Per Outlet Type,

Table: Grocery Retail Sales Breakdown By Format, &

Chapter 8 - Competitive Landscape

Key Players

Key Players In Australia's Food & Drink Sector

Table: Key Players In Australia's Mass Grocery Retail Sector

Chapter 9 - Company Monitor

Food

Lion – Dairy and Drinks

Dairy Farmers

Heinz Australia

Cadbury

Australia Food & Drink Report Q

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Drink

Lion Nathan

Foster’s Group

Coopers Brewery

Coca-Cola Amatil

Mass Grocery Retail

Aldi

Wesfarmers

FoodWorks

Woolworths

Chapter 10 - Demographic Outlook

Table: Australia’s Population By Age Group, - (‘)

Table: Australia's Population By Age Group, - (% of total)

Table: Australia's Key Population Ratios, -

Table: Australia's Rural And Urban Population, -

Chapter 11 - Risk/Reward Ratings Methodology

Table: Rewards

Table: Risks

Weighting

Table: Weighting

Chapter 12 - BMI Food & Drink Industry Glossary

Food & Drink

Mass Grocery Retail

Chapter 13 - BMI Food & Drink Forecasting & Sourcing

How We Generate Our Industry Forecasts

Sourcing

Related research categories

By sector: General drinks

By market: Australia (in Oceania)