2012-09-05 14:57:08 - Recently published research from Business Monitor International, "Australia Food & Drink Report Q4 2012", is now available at Fast Market Research
We continue to expect households to cut back and increase saving, and maintain our 2012 forecast for consumption growth to come in at 1.8%, far below the economy's long term average of 3.3%. As declining house prices increase the pressure on households to cut back on their expenditures, company profits are likely to see similar declines. In turn, we expect the headline unemployment rate to soar, erasing the recent slight improvements in the unemployment rate recorded in Q112. Moreover, the recent declines in overall labour participation and the number of full-time employed staff suggest that the recent gains in the headline number could easily reverse.
As economic activity in manufacturing and services industries continue to decline, employers will inevitably resort to
an absolute reduction of their workforce, rather than converting to part-time staff, in an effort to control costs. We believe the service sector will likely be the worst hit. Furthermore, with more public sector job cuts on the way, we maintain our expectations for the unemployment rate to increase to at least 6.4% by the end of 2012 and expect consumption growth to remain below average over the medium term.
Full Report Details at
- www.fastmr.com/prod/456308_australia_food_drink_report_q4_2012.a ..
Headline Industry Data
* 2012 per capita food consumption = +0.8%; forecast to 2016 = +6.0%.
* 2012 soft drinks sales = +2.5%; forecast to 2016 = +12.6%.
* 2012 alcoholic drinks sales = +1.5%; forecast to 2016 = +10.7%.
* 2012 mass grocery retail sales = +3.3%; forecast to 2016 = +20.9%.
Key Industry Trends
Waning Appetite For The Big Mac: Australians' appetite for out-of-home consumption and fast food in particular appears to be waning against the backdrop of domestic demand weakness. US fast-food giant McDonald's announced that its sales growth in Australia has slowed and it is expecting challenging operating conditions in the coming months. Certainly, with consumer deleveraging continuing apace, prolonged weakness in the housing market and labour market conditions remaining subdued, the Australian market is likely to prove difficult for McDonald's in 2012.
SABMiller Volumes Down in Australia: In July 2012, UK-based drinks firm SABMiller's results indicated that it is still struggling to turn around the Foster's business it acquired in December 2011 for AUD9.9bn. The firm reported that the 'the Australian lager industry continued to be affected by the loss of market share to other alcoholic beverages together with subdued consumer sentiment leading to a significant reduction in volumes.' With the overall market proving challenging, there are questions to be asked about SABMiller's decision to enter Australia despite the firm's insistence that it is making good progress with 'synergy delivery' and plans to strengthen 'brand equities and retail engagement. '
Risks To Outlook
Growth in exports is at risk with a slowdown in China, given that on average 27% of total exports are bought by the Chinese. If we include exports to other countries which 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.
Partial Table of Contents:
- Australia Food SWOT
- Australia Drink SWOT
- Australia Mass Grocery Retail SWOT
- BMI's Core Global Industry Views
- Table: Core Views
- Asia Pacific Risk/Reward Ratings
- Table: Food & Drink Risk/Reward Sub-Factor Ratings, Q412 (score out of 10)
- Table: Asia Pacific Food & Drink Risk/Reward Ratings, Q412
- Australia Food & Drink Risk/Rewards Rating
- Macroeconomic Outlook
- Table: Economic Activity
Industry Forecast Scenario
- Consumer Outlook
- Food Consumption
- Table: Food Consumption Indicators - Historical Data & Forecasts, 2009-2016
- Table: Confectionery Value/Volume Sales - Historical Data & Forecasts, 2009-2016
- Canned Food
- Table: Canned Food Value/Volume Sales - Historical Data & Forecasts , 2009-2016
- Functional Food
- Table: Functional Food Value Sales, 2009-2016
- Table: Food & Drink Trade Indicators - Historical Data & Forecasts, 2009-2016
- Alcoholic Drinks
- Table: Alcoholic Drinks Value/Volume Sales - Historical Data & Forecasts, 2009-2016
- Hot Drinks
- Table: Hot Drinks Value Sales - Historical Data & Forecasts, 2009-2016
- Soft Drinks
- Table: Soft Drinks Value/Volume Sales - Historical Data & Forecasts, 2009-2016
- Mass Grocery Retail
- Table: MGR Sales By Format - Historical Data & Forecasts, 2009-2016
- Key Industry Trends And Developments
- 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
- Canned Food
- Organic Farming
- 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
- CCA Tie-Up With Beam To Facilitate Growth Ambitions In Spirits
Full Table of Contents is available at:
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