Market Analysis



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.



Growth Demand

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).



Food Safety

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