What’s in the hypothetical Australian shopping trolley in 2013?
Business information analysts IBISWorld have released their forecast for what Australians will be piling into their shopping baskets in five years’ time.
With slower economic growth encouraging more frugal supermarket spending, and increasing health consciousness at the forefront of many a shoppers’ mind, there is a noticeable change in the food Australian consumers are choosing, noted IBISWorld’s General Manager (Australia), Robert Bryant.
Demand for dairy
Dairy consumption is on the rise, and yoghurt is high on the shopping list for many Australian families, a trend Mr Bryant expects to continue.
“Yoghurt is a convenient food because it’s relatively portable and suitable to take to the office as well as to include in kids’ lunch boxes,” he said. “Over the next few years we can expect to see an increased market share for functional yoghurts, such with added omega-3, antioxidants, vitamins and probiotic cultures, as well as organic versions.”
An ageing population should encourage greater dairy consumption due to concerns about osteoporosis, and we can also expect to see stronger demand for cheese. “Reduced fat and specialty cheeses will be in most shopping baskets of the future, particularly fortified and organic cheeses,” tipped Mr Bryant.
More red meat
Pork is likely to be less popular in coming years due to lower production and higher relative prices compared to beef, lamb and poultry, which will all enjoy increased consumption over the next five years.
“Over the next five years meat prices should fall slightly as meat production increases due to the rebuilding of herds,” Mr Bryant suggested. “However, it would be a different story if grain prices were to rise and agriculture were included in the emissions trading scheme. Then we’d see rising meat production costs, lower output and consumption and higher prices. Under an emissions scheme, demand is forecast to shift away from lamb and beef towards poultry and pig meat products as poultry and pigs are lower emitters.”
Organic red meat and poultry will continue to increase their market share, and IBISWorld expects meat producers will invest further in promoting their products based on their companies’ livestock qualities and characteristics to distinguish their meat from the competition.
Consumers are set to be drawn toward seafood as concerns about healthy eating increase but, while seafood prices have declined in real terms in recent years thanks to increased imports from South East Asia and New Zealand, prices may now be set to rise. The positive health benefits are anticipated to override any rise in price, however, as demand is likely to receive a boost in the coming five years.
Higher seafood prices and greater increases in production from fish farms relative to wild-caught seafood will lead Australians to consume more seafood from fish farms, particularly bluefin tuna and barramundi. IBISWorld also expects growth of sales of seafood products that promote their sustainability credentials, both for aquaculture and wild-caught species.
Bread is back with wholegrains
After some time in the wilderness, bread is back. The popularity of low and no-carb diets, such as Atkins, is waning as more people realise the importance of wholegrains in a well-balanced diet such as a source of fibre. Specialty bakers, such as Philippa’s and Laurent will continue to expand their market share with premium products and those perceived to offer additional health benefits, Mr Bryant believes, but prices will remain relatively high due to the ongoing demand for grains to produce biofuels.
The rise in per capita consumption of wholegrains is predicted to exceed that of meat products and be similar to dairy products over the next five years.
Overall, the consumption of confectionery is declining because of health concerns and an ageing population – since teenagers are the major consumers of sweets and chocolates. There are, however, a number of product categories bucking this trend. Chewing gum will continue to be popular, according to IBISWorld, particularly as a result of promotions boasting about the dental health benefits of some gum brands. The other product likely to be more prominent in the 2013 shopping trolley is chocolate, but only of the premium, dark, organic or fair trade variety.
“Confectionery may also weather an economic downturn better than some other food products as people who purchase sweet treats will often scrimp and save on other grocery items to be able to afford them. People also tend to eat more junk food in stressful times,” Mr Bryant added.
“Customers are reading labels and buying more products which support their views on ethical consumerism, whether that’s items that are not genetically modified, or products that haven’t been exposed to pesticides or antibiotics, or those from a sustainable agriculture or fair trade environment,” he continued. “The result is good news for products which address those concerns, such as Green and Black label chocolate, fair-trade chocolate, or chocolate made from beans produced in a particular country in the confectionery aisle.”
Eating extra eggs
IBISWorld expects Australians to be eating more eggs in five years’ time as consumers become increasingly aware of the new positive health message about eggs, aided by strong promotion by the Australian Egg Corporation Limited. Mr Bryant also anticipated the expansion of private label share in free range and organic eggs lines, which will increase price competition and reduce the price of non-caged eggs.
Oil over dairy
Product innovation is driving the success of oilseed products in this category, with spray-on oils and cholesterol-lowering spreads growing in popularity despite their higher price points, compared to butter and traditional margarines. “Over the next five years we expect oilseed prices will remain high, but that won’t stop consumers from making the switch from dairy-based fats to oilseed products.”
While in many categories Australians are selecting healthy products over traditional favourites, we’re still lagging behind when it comes to the recommended daily intake of fruit. Over the past five years Australian expenditure on fruit fell, but IBISWorld expects that situation will reverse over the coming decade.
“Campaigns such as “Go For 2 and 5″ will start to sink in and clear up the mixed messages some consumers have taken on board because of the high sugar content of some fruit, and the fact a number of popular low carbohydrate diets condoned severely restricted fruit intake,” Mr Bryant said. “We believe price growth for fruit and nuts will accelerate and expenditure will rise by around 2% a year for the next five years. The most popular fruit choices are likely to be staple items such as apples, bananas and stone fruits, as well as some increase in the consumption of berries (high in anti-oxidants) and tropical varieties, such as paw paw.”
Over the past five years, consumer spending on vegetables has risen 2.8% a year as a result of increased consumption as well as higher prices. “The health benefits of eating vegetables have contributed to their growing popularity,” said Mr Bryant. “Innovative and more convenient packaging is also a major factor, such as the availability of pre-cut vegetables, pre-prepared salad leaves and mixed bags of stir-fry vegetables or soup ingredients which eliminate the onerous task of washing, peeling and chopping veggies – making them much more appealing for today’s time-poor shoppers.” IBISWorld forecasts household vegetable consumption will grow at around 1.9% a year between now and 2013.
Thirst vs thrift
In the future Australians are likely to spend more on alcohol and most other drink categories, according to IBISWorld. Health concerns and price rises may see interest in soft drinks wane, and yet spending on alcohol is expected to be boosted by around 1.3% a year.
“The price of beer and spirits prices have climbed consistently over the last five years, while wine prices have fluctuated. Over the next five years beer and spirits will continue their upward trend, while wine prices will also grow because of more constraints on domestic supply. However, while prices rise, per capita alcohol consumption is expected to remain steady.”
Bucking the trend towards healthy eating elsewhere in the shopping basket is the processed food category – currently growing faster than most other categories. “Despite the fact it’s often not that healthy, the convenience of processed foods mean this category is unlikely to decline any time soon. In addition, the current economic slowdown will cause people to dine out less often and switch to lower priced options,” Mr Bryant claimed.
The green light for GM?
Already, some processed foods containing genetically modified ingredients are on Australian shelves, made from crops grown overseas. And though there are some genetically modified fruits and vegetables (such as tomato and rockmelon) approved for sale in the US, the EU, Canada and Japan, IBISWorld doesn’t think we’re likely to see them for sale in Australia within five years because of the time it takes to commercialise new products and to gain approval for mass production and trade.
“Having said that, it will happen. Currently trials of genetically modified pineapples, papayas and grapevines are being undertaken, with banana trials beginning later this year,” Mr Bryant noted.
Prominent items: the 2013 Shopping Basket Snapshot
- Ready meals
- Fortified or sparkling wine
- Imported/specialty beer
- Functional yoghurt
- Reduced-fat cheese
- Organic beef
- Lean cuts of lamb
- Atlantic Salmon fillets
- Bluefin Tuna
- Wholegrain bread
- Chewing gum
- Premium dark (organic or fair trade) chocolate
- Private label free range eggs
- Cholesterol-lowering spreads
- Canola oil
- Tropical fruits and berries
- Pre-cut vegetables
- Bag of salad leaves
- Gourmet sauce