Revenue has suffered due to cheap import competition and private labels
Melbourne, Australia (PRWEB) November 26, 2012
The Australian Fruit and Vegetable Processing industry has battled through difficult trading conditions over the past five years. The increase in cheap foreign imports, aggressive marketing of private-label products and chronic supply-side issues have largely impeded the industry's growth prospects. According to IBISWorld industry analyst Naren Sivasailam, “the increase in imports has been driven by an ascendant dollar, reduced domestic inputs due to adverse weather conditions and an increase in supermarkets' tendency to direct-source processed goods from overseas.” Added to this is the growing acceptance and marketing of private-label products, which has intensified competition even further and contributed to a general decline in industry performance. In the five years through 2012-13, industry revenue is estimated to increase by an annualised 0.4% to total $5.35 billion. This includes a forecast 0.5% increase in revenue in 2012-13.
Looking ahead, the Australian Fruit and Vegetable Processing industry's performance will be contingent on population growth, import competition, acceptance of private labels, weather patterns and horticulture input prices. “Competition will continue to rise as imports increase and account for a higher percentage of domestic demand”, Sivasailam adds. Greater acceptance of private labels is expected to continue as supermarkets pursue aggressive promotional activities and consumers increasingly accept these products as economical alternatives to branded products. These factors are expected to lead to lower prices and lower revenue for fruit and vegetable manufacturers as branded products are discounted to gain market share and maintain demand.
However, some processors are expected to introduce new value-added products, which may mitigate the downward pressure on prices for some manufacturers. Rising health consciousness and increased vegetable consumption over the next few years is expected to boost demand for the industry's products in general. Busier lifestyles will bode well for convenience-based foods such as frozen fruit and vegetables and soups. The Australian industry has a medium level of market share concentration. Over half of the producers engaged in fruit and vegetable processing have revenue of over $200,000. The four largest players in the industry are Heinz Wattie’s, Simplot Australia, Coca-Cola Amatil and McCain Foods.
For more information, visit IBISWorld’s Fruit and Vegetable Processing report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry consists of companies that bottle, can, preserve, quick-freeze and quick-dry fruit and vegetables (excluding sun-dried products). It includes dehydrated vegetable products, soups, sauces, pickles and mixed meat and vegetable and cereal products. The industry also includes firms that process fruit and vegetables.
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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