Health consciousness and consumer premiumisation make room for specialty sausage makers.
Melbourne, Australia (PRWEB) June 15, 2013
The Sausage Production industry in Australia has seen better times. Growing awareness of health and nutrition has led consumer choices away from high-fat foods, such as sausages and related small goods. IBISWorld industry analyst Naren Sivasailam states “producers have been plagued with falling profitability, volatile commodity inputs and anaemic consumer sentiment.” Offsetting these factors has been a growing appetite for high-end and specialised products. This trend of premiumisation has resulted in an increased demand for high-margin gourmet and specialty sausages. Producers have also responded to industry threats by being innovative with their product development. Growing areas include low-fat products with convenience packaging and varied consumption options.
The future of the Sausage Production industry is expected to be peppered with opportunity. Despite the decline in consumption of red meat and an aversion to fatty foods, consumers have chosen quality over quantity. This is expected to bode well for the specialty and gourmet segments. According to Sivasailam, “the entry of supermarket branded products has reduced the price differential in the gourmet segment from both major branded producers and smaller producers, such as butchers.” Another trend expected to build in the next five years is the growing importance of ethical and sustainable meat production. This has resulted in greater use of free-range and organic pork, lamb and beef sausages. In the five years through 2012-13, industry revenue is expected to grow by a compound annual rate of 1.3% to total $488.4 million. This includes a forecast decline of 3.2% in 2012-13.
The industry has a high level of market share concentration and this has increased over the past five years. Considerable economies of scale exist, especially in the production of fresh sausages. Operators have minimised their cost structures through acquisition and by centralising production. At a regional level and within speciality markets there is also a high level of market share concentration. Industry operators compete based on the style of sausage manufactured and the ability to fill large contracts cheaply. The major players in the industry are Food Investments Pty Limited and Australian Consolidated Food Investments Pty Limited. For more information, visit IBISWorld’s Sausage Production report in Australia industry page.
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IBISWorld Industry Report Key Topics
This industry includes the production of sausages made from a single type or a combination of meats encased in a skin.
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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