Agri-Food Trade Service

The Australian Market: Opportunities for Canadian Agri-Food Products

Could "The Land Down Under" Be Your Next Market?

Australia's Agri-Food & Beverage Trade

Although Australia is located on the opposite side of the world, its similarities to Canada and its market potential continue to bring the countries closer together. Australia is a prosperous, industrialized nation with a population of 21 million and a GDP per capita estimated at $36,818. Australia has a strong economy with a familiar legislative and regulatory environment.

Canadian agri-food exports to Australia are growing every year. In 2007 agri-food exports to Australia reached $208 million, representing 12% of total Canadian exports to Australia. Top agri-food exports include pork, frozen potatoes, frozen blueberries, maple syrup and tinned salmon.

Although Canada and Australia produce many of the same agricultural commodities, the two countries remain significant trading partners. Two way agri-food trade between Canada and Australia exceeded $657 million in 2007.

The Market

The Australian consumer market is sophisticated and affluent, demanding value-added imported products. Australia's consumer-oriented agri-food and beverage imports are growing and are worth about $5.6 billion a year.

The market for food grocery sales in Australia is concentrated along the east coast where population and disposable income is greatest. More than 70% of food expenditure occurs within the supermarket and grocery sector, and over 85% of products sold in supermarkets are either imported or supplied by multinational companies with operations based in Australia.

The Australian agri-food market is highly competitive. There is a strong commitment among consumers to buy Australian-made products fuelled by pressure from farmers and government.

Canadian exporters will find good opportunities catering to niche markets. Australian consumers are typically adventurous and are drawn toward innovative products. They are increasingly demanding foods that are healthy but also convenient, with organic, gluten-free and functional foods growing in popularity.

Opportunities

Organic/Natural

The organic food industry in Australia is growing at a relatively rapid rate with no sign of slowing. The Australian organic retail market is forecast to grow by 20 to 25% annually, while domestic production growth is forecast at 10 to 15% per year. This means a significant amount of product is imported to meet rising demand. Opportunities for Canadian companies to export organic processed or dried products to Australia are significant.

Functional Foods

Canadian companies will find opportunities in the Australian functional foods sector. The Australian functional foods market has seen rapid growth in the last decade. This trend is likely to continue as a result of changing population demographics (ageing population), and the effects of lifestyle diseases (obesity and diabetes). Recent changes in Australian labelling regulations now allow companies to communicate product's health benefits.

Pork

An increasing number of domestic pork processors are using imported pork in their business operations. Canada is the leading supplier of imported pork, with 43% market share of total imports.

Cold Beverages

The fruit/tea drink category dominates the cold beverage sector. Australian importers are looking for private label suppliers in fruit drinks, particularly cranberry juice and soft-drinks.

There are also growing opportunities in the sports and energy drink segment as these products achieved volume growth of 33% and 28% respectively in 2006.

Nutritious Snacks

The nutritious snack category is one of the fastest growing categories in Australia's supermarket industry. Consumer demand for healthy/nutritious snacks have increased over the last 5 years fuelled by government policies related to the so-called "obesity epidemic" in the country.

There are growing opportunities in the portable breakfast drinks and bars sector as these products have experienced strong sales growth in last two years.

Confectionary

Opportunities exist for new innovative confectionary in particular in the mint product segment. Mint products experienced a 25% sales growth in 2006.

Fish and Seafood

There is an opportunity for Canadian companies to export crustaceans and molluscs to Australia. There is particular interest in Canadian scallops and squid. According to industry sources, Canadian scallops are considered to be of better quality compared to other imported competitors and are currently primarily sold in high end restaurants and hotels.

Condiments

Consumers are increasingly time-poor, therefore are seeking convenience and health benefits (e.g. reduced salt, low fat) in condiments including mustards, gravy and sauce. The liquid gravy market experienced an 87% sales growth in 2006.

Market Challenges

Despite Canada's success in this sector, Australia maintains very stringent quarantine regulations which can often manifest as non-tariff barriers for Canadian agri-food exports. Import permits are required for fresh produce and some products are prohibited.

Australian labelling & advertising laws are different from Canada. This may require some changes to food labels on exports.

The Canadian High Commission can offer guidance in regards to these matters.

Our Team

If you would like to know more about the Australian market and your market potential in Australia, please contact our team at the Canadian High Commission.

Canadian High Commission
Commonwealth Ave, Canberra
ACT 2600 Australia
Tel: (011-61-2) 6270 4000
Fax: (011-61-2) 6270 4069
Email: cnbra-td@international.gc.c
Website: www.infoexport.gc.ca/au

Mr. Kapil Madan
Senior Trade Commissioner
Email: kapil.madan@international.gc.ca

Ms. Ilsa Embleton
Trade Commissioner
Agriculture, Food and Beverages, Fish and Seafood Products, Agricultural Technology and Equipment, Forest Industries, Science and Technology
Email: ilsa.embleton@international.gc.ca

Mr. Greg Luz
Trade Commissioner
Aerospace and Defence, Government Procurement, Metals, Minerals and Related Equipment, Services and Technology
Email: greg.luz@international.gc.ca

Ms. Sue Jude
Trade Commissioner Assistant
Email: sue.jude@international.gc.ca