The growing popularity of eating out, which is driving growth in food-service industries, remains a positive for the industry.
Melbourne, Australia (PRWEB) March 06, 2015
Over the past five years, high seafood prices have inflated industry growth, masking the harsh operating conditions that are threatening operators in the Fish and Seafood Wholesaling industry in Australia. Industry revenue is expected to increase at an annualised 0.6% over the five years through 2014-15, to $4.3 billion. According to IBISWorld industry analyst Brooke Tonkin, “seafood prices have risen only slightly over the past five years, but remain at historically high levels.” Concerns regarding the sustainability of dwindling fish stocks have caused some countries, including Australia, to enforce strict catchment quotas. This has limited supply of fish and other seafood products, such as rock lobster, putting upward pressure on prices. Consumption of fish has risen on the back of perceived health benefits, placing further upward pressure on prices. Revenue growth of 4.3% is forecast for 2014-15, due to further seafood price hikes.
Saturation has limited the industry’s benefits from price growth, as a high number of businesses are competing for limited revenue. “Minimal product differentiation forces them to compete based on price,” says Tonkin. Fishmongers have placed downward pressure on wholesale prices to compete with the major supermarkets, which are increasingly bypassing small wholesalers altogether. This has been detrimental to profit margins. The growing popularity of eating out, which is driving growth in food-service industries, remains a positive for the industry. Restaurants, cafes and small takeaway outlets rely on wholesalers for high-quality produce, providing a sizeable growing market for fish and seafood wholesalers. The industry displays a low level of market share concentration.
Despite forecast revenue growth, trying times lie ahead for fish and seafood wholesalers. However, rising prices will continue to drive revenue growth, rather than increasing activity within the Fish and Seafood Wholesaling industry. Domestic fish and seafood prices will face ongoing upward pressure, as local catchment quotas continue to be enforced. Seafood consumption is forecast to stabilise, as rising prices will tend to inhibit consumption growth. Businesses will be forced to lower already low prices and profit margins to maintain sales volumes. Many will be unable to withstand these financial hardships and will be forced to exit the industry altogether.
For more information, visit IBISWorld’s Fish and Seafood Wholesaling industry in Australia report page.
The Australian Fish and Seafood Wholesaling industry primarily purchases fish and seafood from the aquaculture and wild fishing industries, and from seafood processors. These products may be repackaged or sold straight to specialist fish and seafood retailers, supermarkets, food catering companies, cafes, hotels and restaurants. The industry includes establishments that wholesale fresh, frozen, canned or processed fish or other seafood.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau
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
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.