Melbourne, Australia (PRWEB) August 25, 2014
The Tea, Coffee and Other Food Manufacturing industry in Australia is characterised by the diversity of its products and the levels of value added in each segment. Despite a weak economic climate, waning consumer confidence and volatile commodity prices during earlier years, the industry remained resilient. This was due to the staple and inexpensive nature of its end products. More recently, changing lifestyles and consumption patterns have prompted manufacturers to innovate with their product lines in order to stimulate sales and renew demand. According to IBISWorld industry analyst Ryan Lin, “the ground coffee segment has grown in popularity over the past five years, as consumers have increasingly sought to make cafe-style coffee at home.” Falling appliance prices have also made home espresso machines and coffee makers more affordable. In the five years through 2014-15, industry revenue is expected to increase at an annualised 3.8%. In 2014-15, industry revenue is forecast to grow by 0.5%, to total $6.1 billion. While growth has slowed due to an increasingly competitive marketplace, this has been partially offset by premiumisation in various product segments.
The fortunes of the industry over the next five years will depend on the extent of innovation and competitive pressures faced by participants. However, industry players will be aided by easing commodity prices, an increase in demand for prepared meals, advancements in technology and production, and stable labour costs. Furthermore, the focus on high-protein and low-sugar diets will stimulate demand for green tea, ground coffee and artificial sweeteners, which have shown strong signs of ongoing growth over the past five years. Despite this, “the increasing prevalence of private-label products will weigh heavily on the industry and constrain revenue growth,” says Lin. Fortunately for the industry, its main sources of revenue – coffee and tea – are expected to be partially shielded from this trend by the relatively high levels of brand loyalty that they command. The highly fragmented nature of the industry's products means there will be varying trends across its segments, particularly with regard to herbs, spices, sauces and salad dressings.
The Tea, Coffee and Other Food Manufacturing industry has a medium level of market share concentration. The top players are Nestle Australia, Unilever Australia and Mars Australia. Industry concentration has been mostly stable over the past five years despite major players like actively pursuing mergers and acquisitions. Smaller players have entered the industry, focusing on niche products and highly specialised production. This trend has offset any concentration growth within the industry. At the other end of the spectrum, consolidation of larger companies is expected to increase in the next five years, due to acquisitions, continued product innovation, strong brand loyalty and aggressive marketing initiatives.
For more information, visit IBISWorld’s Tea, Coffee and Other Food Manufacturing industry in Australia report page.
Companies in this industry manufacture food products that are not classified elsewhere. These products include coffee, tea, dressings, seasonings, flavourings, herbs, spices, yeast, yeast extracts, ice, honey, salt and prepared meals. Manufacturers in this industry procure raw materials and process them into various finished products that are subsequently sold to wholesalers, retailers and related food manufacturers.
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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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