Margarine and Other Butter Substitute Manufacturing in Australia Industry Market Research Report Now Available from IBISWorld

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Downstream demand has dwindled as health-conscious consumers lose interest in traditionally high-fat spreadables. For this reason, industry research firm IBISWorld has added a report on the Margarine and Other Butter Substitute Manufacturing industry in Australia to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

The industry will show growth in niche segments such as coconut butter spreads and other vegetable-based substitutes to traditional butter

Over the past five years, the Margarine and Other Butter Substitute Manufacturing industry in Australia has faced difficult conditions. Downstream demand has dwindled as health-conscious consumers lose interest in traditionally high-fat spreadables, opting instead for fresh produce and healthier eating options. At the same time, the industry has become increasingly competitive, as product innovation keeps industry operators on their toes in the bid to lure back the diminishing downstream household market. As a result, over the five years through 2014-15, industry revenue is forecast to fall at an annualised 1.1%, to total $538.6 million. In 2014-15, consumers are expected to be persistent in their search for healthier food options, much to the detriment of the industry, with revenue falling by 1.7%. Despite these challenges, all is not lost. According to IBISWorld industry analyst Ryan Lin, “the industry will experience growth in niche segments such as coconut butter spreads and other vegetable-based substitutes to traditional butter.” At the same time, IBISWorld anticipates that the industry will remain in favour with select downstream markets, in particular those that use margarine and other butter substitutes in the manufacture of foods such as breads and cakes.

Over the coming years, similar trends are expected to occur. Ongoing product innovation in butter and other dairy-based spreads is expected to chip away at the industry, as is consumption of fresh produce such as fruits and vegetables. Consumers are expected to remain consistent in their healthy habits, making fewer purchases of generic spreadables. Despite an overall decline during the next five years, “individual niche segments such as those catering to vegan and organic diets will perform relatively better, with demand outstripping supply, resulting in rising imports of these specialty products,” says Lin.

The Margarine and Other Butter Substitute Manufacturing industry is characterised by a moderate market share concentration level. GrainCorp entered the industry in 2012, when it purchased the Integro Foods division of Goodman Fielder, as part of a $472.0 million acquisition that included major oilseed crusher Gardner Smith. Industry concentration has fallen over the past five years, with major producers losing ground to private-label and niche manufacturers. Aside from the major players, the industry is highly fragmented. These players tend to be small, family-owned businesses that employ only a handful of staff. Typically, these businesses focus their efforts on local areas or niche consumer markets. These markets have displayed strong growth over the past five years, with niche products, such as organic margarine, becoming more popular among consumers.

For more information, visit IBISWorld’s Margarine and Other Butter Substitute Manufacturing industry in Australia report page.

Companies in this industry produce vegetable-based spreads such as margarine and other products, as a substitute to butter.

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IBISWorld Industry Report Key Topics

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
IBISWorld
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