The industry will show growth in niche segments such as coconut butter spreads and other vegetable-based substitutes to traditional butter
Melbourne, Australia (PRWEB) October 15, 2014
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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