Potato Chip Production in Australia Industry Market Research Report Now Available from IBISWorld

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Increasing health consciousness and rising import competition have made for tough conditions for potato chip manufacturers. There has been a general shift towards healthier eating patterns, steering consumers away from the high-fat chip snack options. In order to compete with health snack food substitutes like fruit and muesli bars, producers need to create products to reach niche organic and premium markets. For these reasons, industry research firm IBISWorld has added a report on the Potato Chip Production industry in Australia to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Operators need to target niche markets to help offset rising health consciousness and increasing competition

Over the past five years, the Potato Chip Production industry in Australia has grappled with major shifts in downstream consumption patterns, the rising cost of key raw ingredients as well as increased competition from substitutes, imports and private-label products. According to IBISWorld industry analyst Suzannah Rowley, “The ongoing rise in health consciousness has encouraged a general shift towards healthier eating patterns and a decline in popularity for unhealthy snacks such as potato chips, which are considered high in fat and salt.” This has been the major cause of the 0.3% annualised decline in industry revenue over the past five years and it has also made the industry particularly vulnerable to the threat of healthy snack food substitutes such as fruit and nut bars or wholegrain crackers. These factors combined are expected to also cause industry revenue to decline 2.0% in 2012-13 to total $766.8 million.

Moreover, the rise potato prices have restricted profit growth, as has the increase in price competition generated by imports. “Value-conscious consumer spending patterns have increased the popularity of cheaper private-label products since the onset of the global economic downturn,” says Rowley. The larger players in the Potato Chip Production industry in Australia, including market leaders Frito-Lay and Snack Foods Limited, have been able to fight off some of these challenges thanks to the high degree of consumer loyalty for certain potato chip brands.

These challenges are expected to remain and restrict revenue growth over the next five years. Australian consumers are expected to become even more health and value consciousness, which will fuel the popularity and acceptance of private-label products at the expense of branded potato chips. Moreover, input prices and potato chip imports are expected to rise, which will constrain industry profitability. However, there will still be plenty of growth opportunities for industry players that respond well to these trends, such as the ability to create niche organic or premium product lines to increase profitability. Furthermore, the marginal decline in the Australian dollar is likely to facilitate the expansion of valuable export markets for Australian potato chips. These valuable opportunities are expected to help revenue grow over the next five years. For more information, visit IBISWorld’s Potato Chip Production report in Australia industry page.

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IBISWorld industry Report Key Topics

Companies in this industry manufacture potato chips for snack consumption. This industry excludes products like corn chips, tortilla chips and other chip products.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
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