Melbourne, Australia (PRWEB) August 14, 2014
Pasta Sauce Production in Australia has performed well over the past five years, in contrast to the downward trend exhibited by many manufacturing industries. Industry revenue is expected to grow by an annualised 2.0% over the five years through 2014-15, to reach $142.2 million. According to IBISWorld industry analyst Brooke Tonkin, “producers have benefited from busy consumer lifestyles, renewed interest in cooking at home and some premiumisation of products.” These factors are expected to contribute to 1.0% revenue growth in 2014-15. However, growth has been constrained over the past five years by private-label expansion and the popularity of food-service establishments. For some consumers, pasta sauce represents a quick and convenient meal component that is cost-effective and healthy. Other consumers use pasta sauce as a recipe base for more sophisticated cooking involving meat, herbs and spices. The latter group has grown over the past five years, as the popularity of cooking shows has driven consumer interest in cooking. IBISWorld expects that this trend will become more widespread over the next five years.
Like many other food manufacturers, pasta sauce producers have felt competitive pressure from private-label products. “Consumers have increasingly been purchasing private-label pasta sauce as a cheap alternative to branded products,” says Tonkin. Producers of middle- and low-price products have been particularly susceptible to competition from private-label products over the past five years. This has constrained profitability, with many producers lowering profit margins to facilitate price cuts. At the other end of the price range, producers have been able to maintain and even marginally lift profit margins through the launch of new premium products. However, rising competition from private-label products and food-service establishments is expected to constrain revenue growth over the period. Price-conscious consumers will continue to purchase private-label products, reducing the dominance of the industry's largest players. Producers will also need to be mindful of potentially losing customers to food-service establishments as incomes rise.
The Pasta Sauce Production industry has a high level of market share concentration. This is mainly attributable to the strong branding of major players and their diversification among other food products. The major players in the industry are Simplot Australia (Holdings) Pty Limited, Mars Australia Pty Ltd and General Mills Holding (Australia) Pty Ltd. Because these companies operate on a large scale, they are able to leverage their size when negotiating with suppliers, wholesalers and retailers. This negotiating power provides large operators with a competitive advantage over smaller enterprises. Market share concentration is expected to decline over the five years through 2019-20, driven by the growing prevalence of private-label manufacturers, which is expected to reduce the market shares of existing players.
For more information, visit IBISWorld’s Pasta Sauce Production industry in Australia report page.
Participants in this industry manufacture sauce for consumption with pasta.
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IBISWorld Industry Report Key Topics
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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