Asian Market Demand
An analysis of global beef consumption identified that Asian markets are forecast to have a growing demand for beef products. China is an attractive market opportunity due to its scale and forecast growth. Growth in beef consumption is expected to be supplied from imported beef. Despite China being a competitive beef import market, there is an opportunity to focus on supplying quality boxed beef into the premium end of the consumer market.
APAC has assessed the market opportunity across key Asian markets, including China, Japan and South Korea. The China beef market is forecast to grow at 5.6% p.a. to total $148.7b by 2021 from 2016. This growth is driven by a combination of forecast 2.5% p.a. growth in market volume and 3.0% p.a. growth in price (AU$/kg)
China currently imports 4.4% of its beef. However, almost all forecast growth in beef consumption is expected to come from imports, with a 3.3% annual increase in volumes. The strength of imports reflects the growing imbalance between expanding consumption and stagnant production.
Rising income levels is driving a change in lifestyle and increased consumption of higher priced protein food like beef
– the Chinese middle class was 6% of the population in 2010, it will be 51% by 2020 and personal disposable income levels are forecast to increase at 8% per annum to 2021.
Forecasts suggest a 9.6% increase in beef prices likely to be driven by increases in premium beef products.
The key to a successful China export strategy is:
► Partnering with a one – or a few – major in-country distributors who control the key points in the value / supply chain; and
► An Australian branded premium beef product translated to being a trusted and safe source which consumers are willing to pay a higher price for.
► APAC has held meetings with parties who have expressed interest in entering wholesale offtake agreements with Gladstone Beef.
An analysis of global beef consumption identified that Asian markets are forecast to have a growing demand for beef products.
Emerging economies dominate the list of countries with larger beef consumption growth rates.
The growth in China, followed by Indonesia, Vietnam, India, and South Korea, is being driven by a rapidly growing middle class who are more affluent, increasingly influenced by western food cultures, and who are seeking quality imported food products in response to food safety issues experienced with domestically produced products (e.g. in China).
Safety issues have contributed to increasing consumption of imported food products at a significant price premium. Increasing number of consumers are willing to pay more for safer foods.
► The high demand for Australian beef is primarily a result of high Australian standards in food safety which gives it a trusted entity status and consumers are willing to pay a higher price for the same
► Australian beef is strongly associated with safety, quality, and good taste, while local beef is closer associated with freshness, low price and versatility