Olive oil has been a major growth segment in the industry, as it is commonly perceived to be healthier than other oils.
Melbourne, Australia (PRWEB) December 05, 2014
Operators in the Edible Oils Manufacturing industry in Australia have performed poorly over the past five years. According to IBISWorld industry analyst Brooke Tonkin, “producers have endured downward price pressures from downstream buying markets, growing competition from private-label and imported oils, and shifting consumer preferences.” Combined, these factors have negatively affected profit margins over the period. Industry revenue is projected to fall at an annualised 0.3% over the five years through 2014-15, to reach $506.7 million. However, the industry is anticipated to post a small recovery in 2014-15, with revenue forecast to grow by a marginal 0.8%.
The industry has struggled despite rising per capita fat consumption. Many consumers have made efforts to avoid fats and oils in their food. This has hurt demand for bottled oils sold to consumers through supermarkets and grocery stores. “Fat intake has increased due to rising consumption of snacks and other foods outside the home,” says Tonkin. These foods often contain oils and fats that consumers are unaware of. For example, many muesli bars contain vegetable oil, so by increasing their intake of these ‘healthy' snacks, consumers are actually increasing their fat intake. Since the edible oils are for immediate consumption or use in cooking, the industry has not benefited from increasing fat consumption. Olive oil has been a major growth segment in the industry. Olive oil consumption in Australia increased more than 10.0% annualised over the 10 years through 2013 (latest data available). Many consumers perceive olive oil to be healthier than other types of oils, such as vegetable or canola oil. This is due to olive oil's links to reduced risk of blood pressure problems and cardiovascular disease. Furthermore, olive oil is often consumed with fresh foods, such salads or bread. The industry exhibits a medium level of market share concentration. Major players include GrainCorp Limited, Peerless Holdings Pty Ltd and Boundary Bend Limited.
The Edible Oils Manufacturing industry is expected to return to growth over the next five years. Consumers will continue to increase their consumption of premium oils due to health perceptions, which will help to boost revenue. Furthermore, the forecast depreciation of the Australian dollar will make imports more expensive, improving the competitiveness of locally produced oils.
For more information, visit IBISWorld’s Edible Oils Manufacturing industry in Australia report page.
Players in the industry manufacture plant-based oils for immediate use or for use in cooking. Players purchase their products from upstream growers or may grow their own grain or oilseeds.
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