Rising health consciousness should drive industry growth over the next five years
Melbourne, Australia (PRWEB) November 23, 2012
Over the past five years, Australian vegetable growers have contended with adverse growing conditions, unfavourable exchange rate movements and challenges along the supply chain. In addition, the slump in consumer spending seems to also have detracted from growth as consumption expenditure slowed and industry revenue grew at an annualised 1.5% over the five-year period. This was offset to some extent by a rise in farmgate prices for vegetables, which boosted profitability. According to IBISWorld Industry analyst Suzannah Rowley, “increasing health concerns among consumers also supported demand as people tried to reduce their fat and sugar intake”. This was supported by government and industry marketing campaigns such as Go for 2 & 5, which recommend consumers eat two serves of fruit and five serves of vegetables a day. These positive factors are expected to strengthen over the next year and in conjunction with improved growing conditions, revenue for the Vegetable Growing (Outdoors) industry in Australia is forecast to increase by 5.3% in 2012-13 to reach $4.17 billion.
Rising health consciousness is likely to be a major driver of growth over the next five years. The majority of Australians consume below the recommended level of fruit and vegetables, which indicates that there are still plenty of growth opportunities for the industry. Increases in production volumes and vegetable prices will also help boost revenue and profitability over the next five years. However, growers will have to contend with the rise of cheap imports on the domestic and global markets. “Added to this could be the negative effects of further erratic weather patterns such as drought or flooding”, says Rowley. Overall, industry revenue is expected to increase over the next five years.
Vegetable growing has a low level of ownership concentration compared with other sectors of the Australian economy. The Vegetable Growing (Outdoors) industry in Australia is highly fragmented and largely family run. The value of operations undergone by the majority of businesses can vary given that farmers generally undertake multiple agri-activities simultaneously such as rearing livestock while growing vegetables and other crops. Unfavourable climatic conditions have prompted consolidation across the vegetable growing industry as it becomes more difficult and more expensive to remain viable in the industry. As such, during the past five years enterprise and establishment numbers decreased.
For more information, visit IBISWorld’s Vegetable Growing (Outdoors) report in Australia industry page.
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IBISWorld industry Report Key Topics
Farmers in this industry grow vegetables outdoors in open fields.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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