View
8
Download
0
Category
Preview:
Citation preview
MARKET SNAPSHOT
SHEEPMEAT
FOR FURTHER INFORMATION VISIT US ONLINE AT:www.mla.com.au or email us at: marketinfo@mla.com.au
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.
MLA INDUSTRY INSIGHTS February 2017
ContentsAustralia 1
North America 5
Japan 9
Korea 11
China 13
South East Asia 17
European Union 21
MENA 25
MARKET SNAPSHOT SHEEPMEAT
Australia
FOR FURTHER INFORMATION VISIT US ONLINE AT:www.mla.com.au or email us at: marketinfo@mla.com.au
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.
MLA INDUSTRY INSIGHTS Australia February 2017 1
Australian consumers are increasingly cautious and price-sensitive. Disposable income has not kept pace with inflation, with wage growth stagnating. Growth in food sales, including in the meat category, is largely driven by population growth and price inflation. Sheepmeat consumption in Australia is facing some challenges and opportunities:• Australians remain the second-largest consumers
of meat per capita, and the third-largest consumers of sheepmeat in the world (Source: OECD).
• Changing demography – including increased migrations from Asian countries where pork is the dominant protein, and an aging population who are avoiding red meat for health/functional/price reasons.
• Increased competition from pork (marketing activity) and chicken (price pressure) will continue to challenge sheepmeat.
• Social factors such as increased consumer consciousness of environmental impact, animal welfare, health concerns, and increased demand for food integrity provide opportunities to consider in red meat messaging.
• Lamb value share remains steady as prices increase. Maintaining value share, and limiting decline in volume, remain a challenge.
Population
Households earning
Meat consumption
24.3 in 2016
25.6 in 2020
US$15000+ p.a.
Pork
0.57 0.62
1.10
1.27
0.70 0.71
0.25 0.23
Poultry Beef Sheepmeat
7.7kg per capita*
2016 2020 In million tonnes cwt
10.3 in 2016
11.1 in 2020
US$35000+ p.a.
9.1 in 2016
9.8 in 2020
In million Source: BMI Research, 2016 estimate & 2020 projection
In million households Source: BMI Research, 2016 estimate & 2020 projection
Source: BMI Research, GIRA, 2016 estimate and 2020 projection * 2016e per person per year ** excluding fish/seafood
Domestic utilisation/lamb (share of produced volume)
Retail fresh meat value share
Food Industry Growth
200
020
01
2002
200
320
04
200
520
06
200
7 20
08
200
9 20
10
2011
20
12
2013
20
14
2015
20
1620
17f
22
2 2
07
20
9 2
05
22
4
24
6
223
248
2
27
230
21
620
0
222
22
0 2
07
2
27
234
237
1
12 1
10 1
01
123
131
170
1
77
188
179
19
5
18
6
193
22
2
25
0
2
80
2
77
26
8
256
Domestic Consumption Exports ‘000 tonnes cwt
2016 2015
0
1
2
3
4
5
6
‘000
mill
ions
%
0
20
40
60
80
100
120
2013
2014
2015
2016
f
2017
f
2018
f
2019
f
2020
f
Food sales Food, sales% growth Meat and Poultry sales Meat and Poultry % growth
Beef – 36.7% Chicken – 26.0% Lamb – 13.4% Pork – 11.9% Other – 2.1% Seafood – 8.6% Turkey – 0.9% Veal – 0.4%
Beef – 36.5% Chicken – 26.6% Lamb – 13.2% Pork – 11.3% Other – 2.1% Seafood – 8.8% Turkey – 0.9% Veal – 0.6%
Source: ABS, MLA forecast f = forecast Source: Nielsen HomeScan MAT to 3/12/2016 vs. year ago Source: BMI Research f = forecast
Price Sensitivity in Australia (all categories)
Australian retail meat price
Per Capita Disposable Income
20
30
40
50
20
07
200
8
200
9
2010
2011
2012
2013
2014
2015
%
0
500
1000
1500
2000pork
chicken
lamb
Beef
Sep-
00
Sep-
04
Sep-
08
Sep-
12
Sep-
16
Beef Lamb Chicken Pork
6000
9000
12000
15000
199
0
1995
200
0
200
5
2010
2015
Per capitaSource: KANTAR Millward Brown BrandZ 2007-2015 Source: ABARES/ABS Source: ABS
92.7kg per capita* total meat protein**
2 MLA INDUSTRY INSIGHTS Australia February 2017
Consumers • Consumer demand for lamb is affected by many factors, such
as demographic change, and changes in attitudes and beliefs towards food from family, friends, and the media.
• Consumers are increasingly challenged to cut back on sugar, and eat more natural, fresh and unprocessed foods (Source:
IPSOS Food CHATS 2016). Consumers claim to want to see more food products that are “All natural” (Source: Nielsen – Eliminating the Unnatural 2016). “All natural” product claims doubled between 2009 and 2014 (Source: Mintel, quoted in Australian Food News October 2014).
• Regarding animal products, 60% of consumers claim they want to avoid antibiotics/hormones – the number one ranked concern (Source: Nielsen, ibid).
• MLA research has shown that, when consumers are choosing meat, the attributes most closely associated with frequent consumption are that it is a “family favourite” and that it is “easy and convenient to prepare”.
• When consumers are shopping for lamb, the key information they look for on pack relates to freshness and price.
What things do consumers look for on pack/on shelf when buying lamb?
What are attributes that are important for Australian consumers? (all protein)
What key strengths does lamb have?
Colour of meat Is my/my family’s favourite meat Tastes delicious
Price per kgIs easy and convenient to prepare
I am willing to pay a bit more for this meat
Date packed Is the most superior meat
Guaranteed safe to eat
Freshness Tastes delicious Is the most superior meat
Use by date Consistent quality standards
Is my/my family’s favourite meat
Source: MLA Global Consumer Tracker, 2016
• Concerns over price are the biggest barrier to red meat consumption, and price is a weakness for lamb.
Main reason for eating less red meat
Feb’
10
Dec
’10
Jun’
12
Jun’
13
Jun’
14
Jun’
15
Jun’
16
%
05
1015
202530354045
Other reasons
NET Environment
I don’t like the taste anymore
I am concerned about the red meat industry’s treatment of animals
I am concerned about the e�ects of eating red meat on my health
I �nd red meat too expensive for my budget
Too expensive Health concerns Concerned about treatment of animals Don’t like the taste anymore Environmental concerns (any) Other
Source: MLA/Pollinate annual tracker 2010-2016
• However, lamb is a meat consumers are willing to pay more for, due to its advantages in flavour, safety, and being a family favourite.
• Consumers generally feel very positive about the sheepmeat industry – when asked, 73% couldn’t name anything negative about the industry at all (Source: MLA/Pollinate, 2016).
Vegetarianism• Vegetarianism is reportedly on the rise, with Roy Morgan
reporting in August 2016 that 11.2% of the population reported as vegetarian, up from 9.7% in 2012. However, the definition was somewhat flexible, with the actual claim being “The food I eat is all, or almost all, vegetarian” – a group more closely aligned to the term ‘flexitarian’.
– MLA/Pollinate research suggested the number of pure vegetarians is closer to 7%.
– 13% of current meat eaters claim to have been a vegetarian at some stage in the past.
– There is some interest in meat substitutes but the market remains small.
Protein Image Profiles
+/-5 indicates relative strength or weakness
FreshnessCheaper
High nutritional valueThe animal is well-cared for
The industry is environmentally sustainableConsistent quality standards
Tastes deliciousCan be used in many different meals
Is easy and convenient to prepareLow in fat
Guaranteed safe to eatEssential part of a healthy diet for growing children
Is my/ my family’s favourite meatIs becoming more popularIs the most superior meat
I am willing to pay a bit more for this meat
Source: MLA Global Consumer Tracker, 2016
Single person households
Australians born overseas
Median age in Australia
2015
2.2 million2.5 million
3.0 million
2020 2030 2011
24.6%28.2%
2015Source: ABS Source: ABS Source: ABS
34 years
37 years
1995 2015
of which over ¼ are from Greater China and
South-East Asia
-1 -4 3 0 -3 6 5 8 5 -19 3 10 2 -15 11 2
-5 41 -11 -9 -5 -2 1 12 17 5 -8 3 13 -13 -10 -15
3 -7 -2 4 1 5 7 -3 -2 -15 6 -2 5 -1 5 7
6 -8 10-7 -2 -4 2 -8 -5 23 -9 8 -1 -1 0 14
-2 0 -1 0 0 4 -1 -1 -1 5 3 -4 -2 11 -3 -5
0 1 1 6 4 -4 -9 -8-7 6 3-7 -4 12 0 0
MLA INDUSTRY INSIGHTS Australia February 2017 3
Retail • The grocery retail industry is robust, with turnover totalling
$123 billion in 2016, forecast to rise 5.7% in 2017 (Source: IGD).
• Food and beverages comprise the majority of grocery sales, however the trend is towards lower growth, with non-food retail sales growth outperforming food sales for the first time in 10 years(Source: Citi Research “Looking across the supermarket horizon” October 2016).
• With the average grocery basket value worth $45, a basket with fresh meat/seafood jumps up to around $80 (Source: Nielsen HomeScan).
• Shopper research suggests fresh meat is a “Hero” category for supermarkets – a driver of both traffic to store, and extra spend when in store, and also acting as a ‘price beacon’ category by which shoppers generally judge the level of value provided by a retailer (Source: Shopper Tracker 2016).
• Supermarkets are also increasing their ready-to-eat meal range, targeting shoppers looking for a convenient meal option that might otherwise come from foodservice.
Grocery retail market sharesMajor organised retailers – 2016
Woolworths – 36% Wesfarmers (Coles) – 26% Aldi – 6% Seven & I Holdings – 3% Other – 28%
Source: IGD
Where do consumers typically purchase lamb from?
Supermarket – 68% Butcher – 31% Online – 1%
Source: MLA Global Consumer Tracker, 2016
• Competition remains aggressive at grocery, especially at the discount end with all retailers engaging in visible price wars, particularly within staple categories. These are set to escalate, with speculation that other discount retailers (e.g. Lidl) may launch in the near future.
The changing face of food retail• The retail sector is progressively adopting disruptive
technology. The major retailers are building online sales, with Coles reporting a 25% increase YOY (Source: IGD 2016).
• Fresh Logic forecast that online sales of Australian food & grocery may lift from 3.8% share of the Australian grocery market currently to 7-8% similar to current levels in the UK & US markets (Source: FreshLogic.com.au).
• Non-traditional grocery chains (e.g. Google, Amazon, Uber) may be looking to bring new online grocery shopping solutions to Australians in 2017.
Mini-resurgence of independent retailThe independent meat retail sector has seen a modest resurgence, with 23% of butchers surveyed in 2015-16 saying their business is “Thriving” – up from 21% in 2014-15 (Source: MLA NFS telephone survey).
Place of fresh-meat purchase by average weekly customer spend and market share
Place of purchase Average customer spend
Value market share ($)
Butcher $37 23.5%
Market/Delicatessen/Other
$34 9.4%
Woolworths/Safeway $27 26.4%
Coles $25 23.2%
ALDI $22 7.6%
IGA $22 5.4%
Source: Roy Morgan Jan-Dec 2015, quoted in press release Feb 2016
Key things to know about major grocery retailers• Competition remains aggressive at grocery, especially at the
discount end with all retailers engaging in visible price wars, particularly within staple categories. These are set to escalate, with speculation that other discount retailers (e.g. Lidl) may launch in the near future.
• Woolworths: Food, liquor and petrol sales were down – 1.7% YOY in FY2016 (Source: IGD). Woolworths has been opening new shopfronts, offset by the gradual closure of Thomas Dux outlets. In FY17 they will slow down new store openings to focus on 80+ store refreshes (Source: IGD), potentially including the butcher counters being trialled in some stores now. Citi Research estimate that successful refurbishments can add roughly 1.0% to like-for-like sales growth.
• Coles: Food & liquor sales were up +5.1% YOY in FY2016 (Source:
IGD). Coles are continuing with an Every Day Low Price (Source: EDLP) strategy – by the end of June, Coles had increased the number of SKU’s at ‘Every Day’ prices to 3,100, up from 2,000 at the start of 2016 (Source: IGD).
• IGA (Metcash): Experiencing low growth with food & grocery sales up 0.5% YOY (Source: IGD).
• Aldi: Rapid expansion, as Aldi has opened 36 stores in 2016 (to October), and is forecast to operate 590 stores nationwide by 2021 (Source: IGD). +13.3% sales YOY in 2015 (Source: IGD). Aldi has the highest level of customer satisfaction of any supermarket, according to Roy Morgan (Jan-Dec 2015).
• Costco: Continue to announce record sales – +50.6% revenue YOY in FY2015 (Source: IGD). Costco are set to launch a new Sydney store in 2017 and Melbourne store in 2018. The focus is on high quality meat products, often sold in bulk.
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.4
Foodservice Quarterly turnover in millions & Growth Quarter vs Quarter YACafes, restaurants & takeaways
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
’000
mill
ions
0
3
6
9
12
15
%
-5
0
5
10
15
20
Gross (LHS) Growth (RHS)
Source: ABS. Represents approx.. 75% of the foodservice industry
• The Australian foodservice sector is large, and competitive,with over 85,000 places to eat out, dominated Quick ServiceRestaurants (QSR), cafes, and casual dining restaurants.
• Australians eat out an average of two to three times a week,spending $45 billion per annum (nearly $100 per householdper week) (Source: Intermedia – Eating Out in Australia, quoted in press release Nov 2016).
• The foodservice channel is highly fragmented, with many individualcompanies having small market share. Exceptions include QSRsand institutional channels such as hospitals and aged care.
• Shifting consumer attitudes and behaviour drive innovation andevolution from foodservice providers and these are responsiblefor some of the volatility seen in the market. Foodservice growthis also impacted by tourism and therefore by internationalmarket dynamics, and by the fluctuating Australian dollar.
• The eating out behaviour of Australian consumers over recentyears has seen slower rates of growth, and this is set tocontinue, with only 17% of Australians saying they are eating outmore now than they were a year ago – with 36% saying lessand only 11% say they are intending to eat out more in future(Source: MLA Domestic Consumer Tracker 2016).
Favourite international cuisine types
%
0
10
20
30
40
50
60
70
80
Chi
nese
Italia
n
Thai
Indi
an
Mex
ican
Japa
nese
Gre
ek
Oth
er A
sian
Leba
nese
Fren
ch
Source: Roy Morgan Jan-Dec 2015, quoted in press release May 2016
Average number of meals out of home per week by age
Dinner
Lunch
Breakfast
18-34
0.9
1.8
2.0
0.8
1.5
1.6
0.5
1.6
1.5
0.5
1.1
1.6
35-44 45-54 55+
Breakfast Lunch Dinner
Source: MLA Domestic Consumer Tracker 2016
Average number of meals out of home per week by household composition
Dinner
Lunch
Breakfast
Children in household No children in the household
0.9
1.8
1.9
0.5
1.3
1.5
Breakfast Lunch Dinner
Source: MLA Domestic Consumer Tracker 2016
• There are many factors that contribute to the choice to eat outor not, mostly occasion-based i.e. where and when the mealtakes place, and with whom. Having children in the householdindicates a higher level of eating out, as well as influencingchoice of venue and choice of meal. When it comes to whereto go, convenience, value and familiarity are key, which partlyexplains the rise of QSRs, supermarket meals-to-go, and othercasual dining options.
• Other foodservice trends to watch are menu customisation(for example, McDonalds’ “Create Your Taste”) and increaseddemand for integrity (e.g. Guzman Y Gomez’ switch to 100%free range chicken). Authentic eating and personalisationare amongst the “Top 10 Global Consumer Trends for 2017”,according to Euromonitor International.
Meats eaten when dining out – lunch and dinner
%
0
5
10
15
20
25
30Dinner
Lunch
Bee
f
Lam
b
Chi
cken
Seaf
ood
Pork
No
mea
t
Oth
er
Dinner Lunch
Source: MLA Global Consumer Tracker, 2016
A trend to watch for 2017: tech-driven food delivery by aggregators such as Deliveroo,
Foodora, MenuLog and UberEats
MARKET SNAPSHOT SHEEPMEAT
North America
FOR FURTHER INFORMATION VISIT US ONLINE AT:www.mla.com.au or email us at: marketinfo@mla.com.au
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.
MLA INDUSTRY INSIGHTS North America February 2017 5
Population
Households earning US$15000+ p.a.
Households earning US$35000+ p.a.
324.1 in 2016
333.6 in 2020
113.6 in 2016
118.7 in 2020
75.0 in 2016
83.5 in 2020
In million In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection Source: BMI Research, 2016 estimate & 2020 projection Source: BMI Research, 2016 estimate & 2020 projection
Australian sheepmeat exports – volume
Australian sheepmeat exports – value
Estimated usage split of Australian sheepmeat
Chilled lamb – 44% Chilled mutton – 0% Frozen lamb – 41% Frozen mutton – 15%
Lamb – 89% Mutton – 11%
Retail – 40% Foodservice – 60%
Total 64,562 tonnes swt Total A$ 666.8 millionSource: Department of Agriculture and Water Resources (DAWR) Source: ABS/GTA. 2016* = Moving Annual Total (MAT),
November 2015 to October 2016Source: MLA
Australia’s share of imports
Meat consumption 119.9kg per capita* total meat protein**
74% Australia Other Countries 0.39 per capita
Pork
9.9 10.3
17.418.8
11.5 12.0
0.14 0.13Poultry Beef Sheepmeat
2016 2020
Source: MAT 2016 (November 2015 to October 2016).
In million tonnes cwtSource: BMI Research, OECD * 2016e per person per year ** excluding fish/seafood
For the majority of US consumers, lamb continues to be an unfamiliar protein resulting in low consumption levels. Lamb is still perceived as a niche product primarily appealing to higher disposable income earners residing on the east coast of North America.Challenges and opportunities in the US for Australian Sheepmeat:• In the US, an increase in migration of ethnic
populations that have lamb as part of their stable diet is slowly creating further demand for the protein.
• Households earning a higher income are on the rise creating new market opportunities with an estimated 28.5 million households (income over USD75K pa). This is expected to increase by 17% by 2020 (Source: BMI Research).
• Increasing consumer health concerns poses a threat to red meat consumption.
• New food package labelling that aims to reflect new scientific information will be a key issue in the US in the coming years.
6 MLA INDUSTRY INSIGHTS North America February 2017
Consumers • Lamb is the least consumed protein in the US at an average
of 0.4kg per person per year (Source:OECD-FAO) with 49% of US consumers having never purchased lamb (Source: MLA Global Consumer
Tracker, 2016).
• The majority of Australian lamb consumers in the US earn over US$90k p.a. However 25-34 year-olds make up the largest proportion of consumers who dine out on Australian lamb (Source: MLA Global Consumer Tracker, 2016).
% by age of people who choose Australian lamb when eating out
3% (18-24yrs) 45% (25-34yrs)
37% (35-49yrs) 16% (50-64yrs)Source: MLA Global Consumer Tracker, 2016
• As ethnically diverse millennials in the US seek more ethnically diverse cuisines and more exciting ‘non-traditional’ flavours, lamb is being recognised as a viable option. Around 15% of people in the US aged 20-34 were born in a foreign country (Source: The Council of Economic Advisers, ’15 Economic Facts about Millennials’ 2014).
• Out of the 8 cities surveyed, lamb consumption varied with above national average consumption in Florida and New York City.
Past 7 days Australian Lamb Consumption
Florida
New York
Los Angeles
Washington DC
Boston
San Francisco
Chicago
Houston
18%
13%
12%
12%
11%
10%
9%
8%
National Average 12%
Source: MLA Global Consumer Tracker, 2016
What attributes are important for US consumers? (all proteins)
Main reasons haven’t bought lamb
Family’s favourite Not familiar
Most superior Don’t know how to cook it
Guaranteed safe to eat Don’t like the taste
Part of healthy diet for kids
Consistent quality standsSource: MLA Global Consumer Tracker, 2016
Foodservice • The availability of lamb on US restaurant menus has grown
steadily over the years, featuring on 42% more menus than 10 years ago (2005-2015).
• Historically lamb has been more popular in foodservice in the US with a reputation of being a niche product appealing to the higher end consumer.
• Lamb maintains its position as a core protein at fine dining restaurants however strong growth is occurring in other segments such as QSR/family/casual.
Lamb at US Chains & Independents – Penetration by segment
QSR
Midscale
Casual
Fine Dining
Total
25%
17%
60%
20%
7%
Source: Datassential – Lamb Menu Trends 2015
• Growth in these segments has been driven by changing demographics and the shift in demand for more convenient and affordable lamb options such as lamb burgers, meatballs and kebabs.
Growth by segment – 10 year% change (2005-2015)
QSR
Casual
Fine Dining
Midscale
26%
51%
23%
56%
Source: Datassential – Lamb Menu Trends 2015
Fastest growing popular lamb cuts and formats on menus – 2015 Penetration
%
0
5
10
15
20
25
Lam
b C
hop
Rack
Of L
amb
Gro
und
Lam
b
Gyr
o
Kebo
b
Shan
k
Bur
ger/S
lider
Leg
Saus
age/
Mer
guez
Loin
Source: Datassential – Lamb Menu Trends 2015 Top 10 listed only.
MLA INDUSTRY INSIGHTS North America February 2017 7
Other suppliers • Imports make a significant contribution to the lamb and mutton
supply in the US.
• In 2016* imports accounted for approximately 65%** of total sheepmeat consumed in the US. ** Calculated based on OECD-FAO
consumption and total sheepmeat imports sourced from GTA.
• New Zealand sheepmeat imports to the US decreased by 5.5% during the year ending November 2016 compared to the same period in 2015. Conversely, Australian imports increased by 7%.
Sheepmeat imports by major supplier
2010
2011
2012
2013
2014
2015
2015
YTD
*
2016
YTD
*
‘000
tonn
es s
wt
0
200
400
600
800
1000OtherCanadaIcelandChileNew ZealandAustralia
Australia NZ Chile Iceland Canada Other
Source: GTA * YTD Jan-Nov
In 2016* 44% of Australia’s sheepmeat to the US was chilled, compared to New Zealand at 32%.
% of chilled sheepmeat imports to the US
2016
2015
2014
2013
2012
43%
42% 38%
46% 35%
46% 33%
31%
60%
44% 32%
Australia NZ
Source: GTA
Retail • Consumers mainly shop at supermarkets when buying lamb
however club warehouse channels such as Costco attracts the young affluent consumer.
Where do shoppers go to buy Australian lamb
Supermarkets – 46% Club Warehouse – 33% Butcher – 10% Supercentre – 5% Online – 4% Other – 3%
Source: MLA Global Consumer Tracker, 2016
Where do high income earners shop when purchasing lamb (income over US$90K p.a)
%
0
10
20
30
40
50
60
ButcherCostco Whole FoodsMarket
Trader JoesOther
Source: MLA Global Consumer Tracker, 2016
What things do consumers look for on lamb retail packs?
All Natural/100% natural 46%
Colour of meat 43%
Date packed 43%
Freshness 40%
Use by date 28%
Source: MLA Global Consumer Tracker, 2016
• 2.8% of households purchase fresh lamb at retail and make 2.6 trips a year to buy it, up 7.2% from the previous year.
• Fresh lamb consumers are premium shoppers, spend more in stores and prefer healthier, home-cooked items (Source: Nielsen
shopper behaviour analysis, 2015).
Value share of fresh lamb
Lamb Chops – 52% Lamb Roasts – 22% Leg of Lamb – 16% Ground Lamb – 7% Lamb Shanks – 3%
Source: Nielsen, shopper behavior analysis, 2015
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.8
Market Access Overview Trade agreements Import tariffs Competitors Volume restrictions Technical access Technical accessAustralia-United States FTA (AUSFTA, EIF* 2005)
Australia to US – 0% To Canada – 10%To Mexico – 2.5%
New Zealand has a tariff of US 0.7 cents per kg for lamb and US 2.8 cents per kg for mutton.
There are no trade restrictions on Australian lamb and mutton exported to the US.
USIssues include point of entry inspection, label approvals and port mark compliance.
Mexico No protocol for the export of flat stacked sheep carcases prevent further shipments to Mexico.
Best access Major challengesSource: Trade agreements, DFAT, MLA * Entry into force.
Australian sheepmeat exports to US – summary table volume – in tonnes swt 2016 % out
of total2015 % out
of total5 year average
(2011-2015)% out
of totalchange 2016 vs 5-yr av.
% in tonnes swt
Total 64,562 100 62,875 100 50,678 100 27 13,884
by storageChilled 28,376 44 26,261 42 22,799 45 24 5,577
Frozen 36,185 56 36,613 58 27,878 55 30 8,307
by meat typeLamb 54,545 84 49,904 79 41,262 81 32 13,284
Mutton 10,016 16 12,971 21 9,416 19 6 600
by storage/ meat type
Chilled lamb 28,365 44 26,261 42 22,661 45 25 5,705
Chilled mutton 11 0 - 0 139 0 -92 -128
Frozen lamb 26,180 41 23,643 38 18,601 37 41 7,579
Frozen mutton 10,005 15 12,971 21 9,277 18 8 728 Source: DAWR
value – in A$ 000 % in A$ 000
Total 666,799* 100 690,383 100 461,454 100 44 205,344
by meat typeLamb 590,567* 89 597,579 87 409,756 89 44 180,811
Mutton 76,232* 11 92,803 13 51,698 11 47 24,534 Source: ABS/GTA. 2016* = Moving Annual Total (MAT), November 2015 to October 2016.
Australian lamb exports to US – by major cut (in tonnes swt) % in tonnes swt
Carcase 19,303 35 14,612 29 8,499 21 127 10,804
Leg 14,906 27 14,982 30 13,179 32 13 1,728
Shank 5,348 10 4,104 8 3,952 10 35 1,395
Shoulder 4,767 9 5,931 12 5,421 13 -12 -654
Shortloin 4,374 8 4,027 8 4,198 10 4 176
other 5,847 11 6,249 13 6,013 15 -3 -166
Total 54,545 100 49,904 100 41,262 100 32 13,284 Source: DAWR
Australian lamb exports to Canada – by major cut (in tonnes swt) % in tonnes swt
Leg 3,034 43 2,991 42 2,286 42 33 748
Shortloin 1,243 17 1,308 18 1,126 21 10 117
Rack 816 11 714 10 699 13 17 118
other 2,030 28 2,085 29 1,367 25 49 663
Total 7,124 100 7,098 100 5,478 100 30 1,646 Source: DAWR
Australian lamb exports to Mexico – by major cut (in tonnes swt) % in tonnes swt
Neck 619 57 638 51 526 52 18 93
Shoulder 373 34 583 47 434 43 -14 -62
other 96 9 18 1 58 6 66 38
Total 1,088 100 1,240 100 1,018 100 7 70 Source: DAWR
MARKET SNAPSHOT SHEEPMEAT
Japan
FOR FURTHER INFORMATION VISIT US ONLINE AT:www.mla.com.au or email us at: marketinfo@mla.com.au
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.
MLA INDUSTRY INSIGHTS Japan February 2017 9
Population
Households earning US$15000+ p.a.
Households earning US$35000+ p.a.
126.3 in 2016
125.0 in 2020
49.6 in 2016
52.3 in 2020
24.5 in 2016
33.5 in 2020
In million In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection Source: BMI Research, 2016 estimate & 2020 projection Source: BMI Research, 2016 estimate & 2020 projection
Australian sheepmeat exports – volume
Australian sheepmeat exports – value
Reasons not to buy lamb
Chilled lamb – 40% Frozen lamb – 26% Frozen mutton – 34%
Lamb – 71% Mutton – 29%
Not familiar
47%
35%31%
Can’t cook Not availableTotal 13,222 tonnes swt Total A$ 105.6 millionSource: Department of Agriculture and Water Resources (DAWR), CY 2016
Source: GTA, MAT (Moving Annual Total) November 2015 to October 2016
Source: MLA Global Consumer Tracker, 2016
Australia’s share of imports
Meat consumption
48.3kg per capita*total meat protein**
68% Australia Other Countries
Pork
2.6 2.72.3 2.4
1.2 1.2
0.02 0.02Poultry Beef Sheepmeat
200g per capita* 2016 2020
In million tonnes cwtSource: Ministry of Finance (Japan), MAT December 2015 to November 2016
Source: BMI Research, GIRA, 2016 estimate and 2020 projection * 2016e per person per year ** excluding fish/seafood
Sheepmeat is a minor protein in Japan, yet Australia supplies 68% of imports into Japan, making it the largest export market in Asia for Australian chilled lamb. While Genghis Khan sheepmeat barbecue restaurants are the major outlet for sheepmeat overall, there is a trend emerging in modern foodservice to incorporate Australian lamb on menus as a point of difference.Challenges and opportunities in Japan for Australian sheepmeat include:• Competition from other proteins remains strong.
However, any increase in sheepmeat demand will need to be met by an increase in imports, as the scale of Japan’s local sheepmeat industry is limited.
• There is rising lamb awareness among businesses and consumers but overall awareness remains low compared to other markets.
• Japan has a highly sophisticated and competitive foodservice sector. In order to demonstrate their point of difference, innovative chefs in Japan are experimenting with Australian lamb in diverse cuisine styles including Italian, middle-eastern, Chinese and Japanese.
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.10
Market Access Overview Trade agreements Import tariffs Competitors Volume restrictions Technical access
JAEPA (Japan-Australia Economic Partnership Agreement)
NIL(for all countries)
NZ(same access conditions as Australia)
N/A No major hurdles
Best access Major challengesSource: Trade agreements, MOF, MLA
Australian sheepmeat exports to Japan – summary table volume – in tonnes swt 2016 % out
of total2015 % out
of total5 year average
(2011-2015)% out
of totalchange 2016 vs 5-yr av.
% in tonnes swt
Total 13,222 100 11,711 100 12,235 100 8 987
by storageChilled 5,289 40 5,176 44 5,214 43 1 75
Frozen 7,933 60 6,534 56 7,021 57 13 912
by meat typeLamb 8,640 65 7,977 68 8,174 67 6 466
Mutton 4,582 35 3,733 32 4,061 33 13 521
by storage/ meat type
Chilled lamb 5,241 40 5,119 44 5,150 42 2 90
Chilled mutton 48 0 57 0 64 1 -24 -16
Frozen lamb 3,399 26 2,858 24 3,024 25 12 376
Frozen mutton 4,534 34 3,676 31 3,997 33 13 537 Source: DAWR
value – in A$ 000 % in A$ 000
Total 105,587* 100 99,044 100 95,558 100 10 10,029
by meat typeLamb 74,794* 71 72,929 74 69,103 72 8 5,691
Mutton 30,793* 29 26,115 26 26,456 28 16 4,338 Source: ABS/GTA. 2016* = Moving Annual Total (MAT), November 2015 to October 2016.
Australian lamb exports to Japan – by major cut (in tonnes swt) % in tonnes swt
Shoulder 4,882 57 4,483 56 4,136 51 18 746
Manufacturing 1,864 22 1,837 23 2,458 30 -24 -593
Rack 714 8 624 8 650 8 10 64
Leg 626 7 492 6 534 7 17 91
Carcase 201 2 192 2 151 2 34 51
other 352 4 349 4 244 3 44 107
Total 8,640 100 7,977 100 8,174 100 6 466 Source: DAWR
Australian sheepmeat exports to Japan
2011
2012
2013
2014
2015
2016
‘000
tonn
es s
wt
0
4
8
12
16frozen mutton
chilled mutton
frozen lamb
chilled lamb
chilled lamb frozen lamb chilled mutton frozen mutton
Source: DAWR Genghis Khan sheepmeat barbecue
MARKET SNAPSHOT SHEEPMEAT
Korea
FOR FURTHER INFORMATION VISIT US ONLINE AT:www.mla.com.au or email us at: marketinfo@mla.com.au
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.
MLA INDUSTRY INSIGHTS Korea February 2017 11
Urban Korean consumers are developing a taste for Australian sheepmeat, largely driven by Chinese-influenced lamb barbecue (BBQ) /skewer outlets. Seeing increased interest in sheepmeat, Genghis Khan style (tabletop sheepmeat BBQ from Japan) restaurants are also opening up in the market.Challenges and opportunities in Korea for Australian sheepmeat include:• Australian lamb exports to Korea grew from only
1,639 tonnes swt in 2006, to 8,970 tonnes swt in a decade. Steady growth in demand indicates there is an emerging appreciation for this protein, albeit from a small volume.
• Sheepmeat is a minor protein in Korea. Growth in demand almost solely depends on lamb skewer outlets with no other significant end-users to build further volume. Increasing lamb awareness and promoting usage by other restaurants, remain a challenge.
• Lamb sales in the retail sector remain largely untapped. A large number of consumers with middle to high incomes, and an appreciation for high quality protein (originating from its domestic Hanwoo beef) provides opportunities for creating demand in this segment.
• An increase in sheepmeat demand will have to be met by a rise in imports, as the scale of the local sheepmeat industry is limited.
Population
Households earning US$15000+ p.a.
Households earning US$35000+ p.a.
50.5 in 2016
51.3 in 2020
19.4 in 2016
20.8 in 2020
12.1 in 2016
15.7 in 2020
In million In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection Source: BMI Research, 2016 estimate & 2020 projection Source: BMI Research, 2016 estimate & 2020 projection
Australian sheepmeat exports – volume
Australian sheepmeat exports – value
Chilled lamb – 17% Frozen lamb – 68% Frozen mutton – 15%
Lamb – 87% Mutton – 13%
Total 10,597 tonnes swt Total A$ 59.5 millionSource: Department of Agriculture and Water Resources (DAWR), CY 2016
Source: GTA, MAT (Moving Annual Total) November 2015 to October 2016
Australia’s share of imports
Meat consumption 70.7kg per capita* total meat protein**
96% Australia Other Countries
Pork
1.86 1.93
0.95 1.020.76 0.77
0.01 0.01Poultry Beef Sheepmeat
200g per capita* 2016 2020
In million tonnes cwtSource: GTA, MAT (Moving Annual Total) December 2015 to November 2016
Source: BMI Research, GIRA * 2016e per person per year ** excluding fish/seafood
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.12
Market Access Overview Trade agreements Import tariffs Competitors Volume restrictions Technical access
KAFTAKorea-Australia Free Trade Agreement
15.75% in 201613.5% in 20170% in 2023Under KAFTA
NZImport tariff – 15.75% (2017) under NZ-Korea Free Trade Agreement*
N/A No major hurdles
Best access Major challengesSource: Trade agreements, DFAT, MLA * Under KNZ FTA (Korea-New Zealand Free Trade Agreement), import tariff on NZ sheepmeat will be eliminated in 2024
Australian sheepmeat exports to Korea – summary table volume – in tonnes swt 2016 % out
of total2015 % out
of total5 year average
(2011-2015)% out
of totalchange 2016 vs 5-yr av.
% in tonnes swt
Total 10,597 100 7,775 100 5,145 100 106 5,452
by storageChilled 1,770 17 851 11 318 6 457 1,453
Frozen 8,827 83 6,924 89 4,827 94 83 4,000
by meat typeLamb 8,970 85 6,267 81 4,005 78 124 4,965
Mutton 1,627 15 1,508 19 1,140 22 43 487
by storage/ meat type
Chilled lamb 1,769 17 845 11 316 6 460 1,453
Chilled mutton 1 0 6 0 1.4 0 -37 -1
Frozen lamb 7,201 68 5,423 70 3,689 72 95 3,512
Frozen mutton 1,626 15 1,502 19 1,139 22 43 488 Source: DAWR
value – in A$ 000 % in A$ 000
Total 59,539* 100 50,808 100 28,884 100 106 30,656
by meat typeLamb 52,059* 87 42,327 83 23,085 80 126 28,974
Mutton 7,480* 13 8,481 17 5,798 20 29 1,682 Source: ABS/GTA. 2016* = Moving Annual Total (MAT), November 2015 to October 2016.
Australian lamb exports to Korea – by major cut (in tonnes swt) % in tonnes swt
Shoulder 4,581 51 3,207 51 1,840 46 149 2,741
Breast & Flap 2,087 23 1,097 18 770 19 171 1,318
Manufacturing 883 10 811 13 632 16 40 252
Rack 704 8 376 6 184 5 283 520
Intercostals 286 3 247 4 171 4 67 115
other 428 5 530 8 408 10 5 19
Total 8,970 100 6,267 100 4,005 100 124 4,965 Source: DAWR
Australian sheepmeat exports to Korea
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
‘000
tonn
es s
wt
0
2
4
6
8
10
12
Lamb Mutton
Source: DAWR
MARKET SNAPSHOT SHEEPMEAT
China
FOR FURTHER INFORMATION VISIT US ONLINE AT:www.mla.com.au or email us at: marketinfo@mla.com.au
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.
MLA INDUSTRY INSIGHTS China February 2017 13
Population
Households earning US$15000+ p.a.
Households earning US$35000+ p.a.
1,382 in 2016
1,403 in 2020
61.8 in 2016
102.9 in 2020
7.9 in 2016
15.4 in 2020
In million In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection Source: BMI Research, 2016 estimate & 2020 projection Source: BMI Research, 2016 estimate & 2020 projection
Australian sheepmeat exports – volume
Australian sheepmeat exports – value
Proportion of key cuts
Frozen lamb – 66% Frozen mutton – 34%
Lamb – 64% Mutton – 36%
Breast & flap – 67% Rack cap – 11% Neck – 7% other – 15%
Total 59,449 tonnes swt Total A$ 233 millionSource: Department of Agriculture and Water Resources (DAWR), CY 2016
Source: GTA, MAT (Moving Annual Total) November 2015 to October 2016
Source: DAWR, CY 2016
Australia’s share of imports
Meat consumption 49.9kg per capita* total meat protein**
36% Australia Other Countries
Pork
554.7630.4
130.1 149.6 74.7 82.2 48.2 50.8
Poultry Beef Sheepmeat
3.0kg per capita* 2016 2020
Source: GTA, MAT October 2015 to November 2016
In million tonnes cwt Source: BMI Research, GIRA, 2016 estimate and 2020 projection
* 2016e per person per year ** excluding fish/seafood Source: FAO-OECD
China is a large, complex country with significant regional cultural variation, and a mixed demand outlook for imported sheepmeat. A sophisticated market segmentation approach to identifying and developing opportunities for Australian sheepmeat is required.Challenges and opportunities in China for Australian sheepmeat:• Despite slowing economic growth, consumer demand
for premium imported meat generally is expected to continue to grow, driven by increasing urbanisation, disposable incomes, premiumisation and health awareness.
• Sheepmeat typically contributes around 3% of dietary protein and most consumers don’t yet differentiate between lamb and mutton but consumption is forecast to continue to gradually increase.
• Sheepmeat is traditionally used in a variety of stew, soup and hot pot dishes, and is a popular street food in the form of spiced grilled kebabs.
• China sheepmeat import demand is strongly impacted by domestic production, particularly at the commodity end of the market.
• China’s retail sector is the largest globally (based on retail sales) but is among the world’s most fragmented.
• Whilst ChAFTA* is reducing tariffs on Australian sheepmeat, improving market access remains a priority, particularly for chilled lamb.
* China-Australia Free Trade Agreement
14 MLA INDUSTRY INSIGHTS China February 2017
Consumers • China is a country of great regional cultural diversity and
variation in consumption habits and preferences, particularly in the context of discretionary items. Considering cuisine alone, there are at least 8 official Chinese cuisines.
• Sheepmeat consumption is generally higher in the cooler northern areas of the country and traditionally has a strong seasonality, as it is considered to generate “internal heat”, with consumption increasing during the cooler months.
Consumed in the past year
%
0
10
20
30
40
50
60
70Mutton
Lamb
Bei
jing
Shen
yang
Tian
jin
Xia
men
Shan
ghai
Qin
gdao
Han
gzho
u
Dal
ian
Shen
zhen
Nan
jing
Wuh
an
Che
ngdu
Cho
ngqi
ng
Gua
ngzh
ou
Cha
ngsh
a
Mutton Lamb Northern Cities
Source: MLA/Canadean China Attractive Cities Study, 2016
• Despite being the most populous country in the world, the proportion of consumers that can afford to regularly buy imported sheepmeat is comparatively small, although their number will double over the next 5 years.
Number of households earning >U$35,000 p.a.
mill
ions
0
20
40
60
80
100
2020
2015
Vie
tnam
Indo
nesi
a
Taiw
an
Chi
na
Aus
tralia
Sout
h Ko
rea
Japa
n
Ger
man
y
USA
2015 2020f
Source: BMI Research
• In 2016, 21% of consumers surveyed from the four tier 1 cities of Beijing, Shanghai, Guangzhou and Shenzhen said they had never bought lamb.
• Per capita consumption of sheepmeat in China is small compared to other proteins but is forecast to increase 23% over the next decade from 3.0kg in 2015 to 3.7kg in 2025 (Source: FAO-OECD).
• Whilst pork and chicken appeal for their low price, versatility and convenience, lamb is perceived to have strengths in being a superior protein of high nutritional value.
Perceptions of lamb vs average of all other proteins
The most superior meat
Has high nutritional value
It's becoming more popular
Willing to pay more for it
+10%
+6%
+6%
+6%
+6%Source: MLA Global Consumer Tracker, 2016
• Sheepmeat and sheep offal has traditionally been used in stew, hot pot and soup recipes and is a popular street food in the form of grilled spiced kebabs.
• The bulk (over 80%) of Australian sheepmeat exports to China are breast and flap, carcase and manufacturing, with rack and loin cuts comprising less than 1%.
Foodservice • As a less familiar protein, many Chinese consumers are more
likely to eat sheepmeat out-of-home than cook it at home themselves.
Reasons Chinese consumers don’t buy lamb
Don't buy/cook but eat it out
Don't know how to cook
Not available at shop
Don't like the taste
Not familiar
Too expensive
Too fatty
30%
29%
23%
22%
18%
12%
8%
Source: MLA Global Consumer Tracker, 2016
• Imported Australian lamb can be found on menus in high-end western style restaurants and 5-star hotels. The bulk of Australian sheepmeat is further processed in-market and goes primarily into the hot pot restaurant sector. Some reputable high-end hot pot restaurant chains offer Australian sheepmeat, where it features for its quality.
• Eating lamb at restaurants is also seen as an opportunity to try different cuisines.
Cuisine of last lamb dinner meal eaten out
Local – 75% Foreign – 25% Unknown/other – 1%
Source: MLA Global Consumer Tracker, 2016
MLA INDUSTRY INSIGHTS China February 2017 15
Retail • MLA estimates that currently a very small proportion of
Australian sheepmeat is directly sold through retail channels.
• Whilst Australian lamb does have a presence in some specialist high-end supermarkets that service expatriates and affluent Chinese who have lived overseas, more of it is sold as packaged hot pot rolls, and not necessarily with country-of-origin labelling.
• Despite its size – ranking globally No. 1 in total retail sales (U$1,231.3bn in 2017f) – China’s grocery retail sector is very fragmented (Source: IGD).
Market share of total grocery retail – 2017f
%
0
20
40
60
80
100Other
Organised Retail
Vie
tnam
Indo
nesi
a
Chi
na
Sout
h Ko
rea
Taiw
an
Japa
n
UA
E
USA
Sing
apor
e
Aus
tralia
Organised retail Other
Source: IGD f = forecast
• E-commerce is a well-developed channel in China, particularly for apparel, personal care and electricals and through which a variety of frozen and manufacturing sheepmeat products are being sold. Challenges with cold chain management remain significant for fresh food, including higher-end lamb product.
Other suppliers • China has the world’s largest sheep flock, estimated at 315
million head in 2015. Domestic sheepmeat production is expected to grow, though moderate, in coming years (Source: GIRA).
• China is a comparatively small exporter of sheepmeat now, as domestic demand has grown.
• Imports comprised only around 6% of the sheepmeat consumed in China in 2015.
• In 2016, Australia supplied around a third of China’s total sheepmeat imports.
• Key competitors: – New Zealand has long been China’s largest imported
sheepmeat supplier, in 2016 supplying 110,443 tonnes swt from Jan-Oct.
– Uruguay and Chile are smaller suppliers.
China sheepmeat imports
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2015
YTD
*
2016
YTD
*
‘000
tonn
es s
wt
0
50
100
150
200
250
300Other
Uruguay
Australia
New Zealand
NZ Australia Uruguay Other
Source: GTA, China Customs *YTD Jan-Oct
Trade access • Market access work is complex, time-consuming and
challenging and is a high priority for Australia.
• Australia has made some significant market access gains in the China sheepmeat market since 2012.
• The key issues that remain a priority for Australia to resolve relate to the limited number of plants approved to export to China (particularly for chilled sheepmeat) and restrictions on offal exports.
Live exports • China has been a significant market for Australian breeder
sheep exports. Some 6,456 head were exported in 2016, a significant decline of 61% on 2015 (Source: DAWR, ABS).
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.16
Market Access Overview Trade agreements Import tariffs Competitors Volume restrictions Technical access
ChAFTA China-Australia Free Trade Agreement (entered into force 20 December, 2015)
Under ChAFTA:2017: • Chilled bone-in/
boneless meat: 10% • Chilled carcases/
half-carcases: 10-15.3% • Frozen bone-in/
boneless meat: 8-10% • Frozen lamb carcases/
half carcases: 10%• Frozen mutton carcases/
half carcases: 15.3%• Sheep offal 11.3-14%2023: Meat: Zero2024: Offal: Zero
NZ import tariffs: Zero from Jan 2016
Uruguay, Chile & Mongolia import tariffs: • Frozen bone-in/boneless
meat: 12-15%• Frozen lamb carcases/
half carcases: 15%• Frozen mutton carcases/
half carcases: 23%• Frozen sheep offal: 18%
N/A Restrictions on the number of approved plants, chilled plants and restrictions on edible offals.
Best access Major challengesSource: Trade agreements, DFAT, MLA NB: China also applies a 13% VAT on most items (muscle cuts, offal) and 17% on processed
Australian sheepmeat exports to China – summary table volume – in tonnes swt 2016 % out
of total2015 % out
of total5 year average
(2011-2015)% out
of totalchange 2016 vs 5-yr av.
% in tonnes swt
Total 59,449 100 60,220 100 63,746 100 -7 -4,297
by storageChilled 2 0 - 0 24 0 -91 -22
Frozen 59,447 100 60,220 100 63,722 100 -7 -4,275
by meat typeLamb 39,096 66 31,326 52 32,092 50 22 7,005
Mutton 20,353 34 28,894 48 31,654 50 -36 -11,301
by storage/ meat type
Chilled lamb 2 0 - 0 15 0 -86 -13
Chilled mutton - 0 - 0 9 0 -100 -9
Frozen lamb 39,094 66 31,326 52 32,077 50 22 7,017
Frozen mutton 20,353 34 28,894 48 31,645 50 -36 -11,292 Source: DAWR
value – in A$ 000 % in A$ 000
Total 232,987* 100 248,943 100 264,488 100 -12 -31,500
by meat typeLamb 148,748* 64 141,242 57 142,787 54 4 5,961
Mutton 84,239* 36 107,702 43 121,701 46 -31 -37,462 Source: ABS/GTA. 2016* = Moving Annual Total (MAT), November 2015 to October 2016.
Australian lamb exports to China – by major cut (in tonnes swt) % in tonnes swt
Breast & Flap 24,635 63 21,744 69 20,082 63 23 4,553
Manufacturing 7,486 19 5,289 17 5,721 18 31 1,765
Neck 3,914 10 3,293 11 2,429 8 61 1,484
other 3,061 8 999 3 3,858 12 -21 -797
Total 39,096 100 31,326 100 32,092 100 22 7,005 Source: DAWR
Australian mutton exports to China – by major cut (in tonnes swt) % in tonnes swt
Breast & Flap 15,072 74 16,001 55 12,662 40 19 2,410
Carcase 2,091 10 6,976 24 11,129 35 -81 -9,038
Leg 1,393 7 3,467 12 3,196 10 -56 -1,803
other 1,797 9 2,451 8 4,667 15 -61 -2,870
Total 20,353 100 28,894 100 31,654 100 -36 -11,301 Source: DAWR
MARKET SNAPSHOT SHEEPMEAT
South East Asia (including Indonesia)
FOR FURTHER INFORMATION VISIT US ONLINE AT:www.mla.com.au or email us at: marketinfo@mla.com.au
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.
MLA INDUSTRY INSIGHTS South East Asia February 2017 17
South East Asia (SEA*) is a diverse region with vast differences in wealth, religion and economy across countries. Meat consumption is steadily rising in line with the region’s economic development and population growth. Key sheepmeat importing countries in SEA are Malaysia, Singapore, and Indonesia.Challenges and opportunities in SEA for Australian sheepmeat include:• Sheepmeat is a minor protein in the region, and some
markets do not distinguish between lamb and mutton.• Lamb awareness varies across countries with up to
55% of target consumers being aware of lamb in Malaysia vs only 11% in Thailand.
• Unlike pork or beef, sheepmeat is consumed across a range of religions – an ideal protein for multicultural consumers in SEA, as well as international visitors to the region.
• The period of strong demand for red meat is Ramadan.• Tourism is significant in the region and growing in
some areas. High end foodservice tends to follow this growth, which bodes well for chilled lamb growth.
* In this report, SEA includes the following countries – Indonesia, Malaysia, Thailand, Singapore, the Philippines, and Vietnam, as well as Brunei, Cambodia, Laos and Myanmar.
Population
Households earning US$15000+ p.a.
Households earning US$35000+ p.a.
639.5 in 2016
666.4 in 2020
16.0 in 2016
34.6 in 2020
3.5 in 2016
7.3 in 2020
In million In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection, total of 10 countries
Source: BMI Research, 2016 estimate & 2020 projection, total of 7 countries – Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam and Cambodia
Source: BMI Research, 2016 estimate & 2020 projection, total of 7 countries – Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam and Cambodia
Australian sheepmeat exports – volume
Australian sheepmeat exports – value
Reason not to buy lamb
Chilled lamb – 3% Chilled mutton – 1% Frozen lamb – 34% Frozen mutton – 62%
Lamb – 44% Mutton – 56%
Total 41,262 tonnes swt Total A$ 220.2 million Malaysia, Singapore, IndonesiaSource: Department of Agriculture and Water Resources (DAWR), CY 2016
Source: GTA, MAT (Moving Annual Total) November 2015 to October 2016
Source: MLA Global Consumer Tracker, 2016
Australia’s share of imports
Meat consumption
Malaysia
72%90%
99%
Singapore Indonesia Pork
6.888.14
6.176.90
2.23 2.560.26 0.28
Poultry Beef Sheepmeat
2016 2020
In million tonnes cwtSource: GTA, based on MAT volume of Malaysia, Singapore and Indonesia
Source: BMI Research, 2016 estimate and 2020 projection, total of 6 countries – Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Singapore data are GIRA 2016 & 2021 forecasts, sheepmeat data except Singapore are OECD and includes goatmeat
#1 Don’t know how to cook
18 MLA INDUSTRY INSIGHTS South East Asia February 2017
Consumers • The SEA region is diverse in many aspects, and there is a vast
difference in wealth (Singapore’s GDP per capita is almost 40 times Cambodia’s), in religion (Buddhist, Muslim, Roman Catholic and Hindu) and economic/political systems.
• Sheepmeat awareness and consumption vary across the markets in the region. In Malaysia and Singapore, sheepmeat is a common part of diets, although consumption volume is still low in comparison with other proteins.
Lamb – awareness
Malaysia 55%
Singapore 46%
Indonesia 39%
Philippines 24%
Vietnam 13%
Thailand 11%
Source: MLA Global Consumer Tracker, 2016
• In some markets, sheepmeat and goatmeat are not clearly differentiated. Similarly, there is little distinction between lamb and mutton among the majority of consumers in Malaysia, while lamb is an established protein category in markets such as Singapore, Thailand and Indonesia.
• Lack of knowledge/confidence in cooking is the major obstacle for consumers who haven’t bought lamb, rather than taste.
I don’t buy lamb because…
% A
gree
d
0
10
20
30
40
50
60
70
Indonesia
Singapore
Malaysia
Don’t knowhow to cook
Notfamiliar
Don’t buybut eat out
Don’t likethe taste
Not availablewhere I shop
Malaysia Singapore Indonesia
Source: MLA Global Consumer Tracker, 2016
• Sheepmeat demand surges during festive seasons, including Ramadan month. In Indonesia, serving imported lamb is becoming more popular than local goatmeat.
• Ramadan dates are based on a lunar calendar, and migrate throughout the seasons. Subsequently, the timing of the demand spike for red meat changes with it every year.
Ramadan schedule
Year First day Last day
2016 7 Jun 6 Jul
2017 27 May 25 Jun
2018 16 May 14 Jun
2019 6 May 4 Jun
2020 24 Apr 23 May
2021 13 Apr 12 May
2022 3 Apr 2 May
Note: Ramadan start day may vary by country as it depends on when the new moon is first sighted
Foodservice • Lamb is a minor protein but consumed in a most diverse way
in the SEA foodservice sector – from western style cuisine, to Malay, Chinese, Indian or Middle Eastern flavoured dishes.
• In Malaysia, sheepmeat is a popular protein when dining out during the annual Ramadan month banquets.
• In Singapore, there are over 15 million people who visit the country every year, and more than one third of these visitors come from countries where sheepmeat is commonly consumed – such as China, Australia, the US, Europe and the Middle East. Demand from Singapore locals, as well as these international visitors makes Australian sheepmeat indispensable on restaurant menus.
Total number of arrivals into Singapore, by country
15.5million arrivals
in 2016*
ASEAN Greater China Australia and NZ India US and Canada Europe (inc Russia) Middle East Other
Source: BMI Research, 2016 estimate
• In SEA, demand for chilled Australian lamb in the high-end foodservice sector is expected to grow steadily, underpinned by a rising number of tourists into the region.
Australian chilled lamb exports to SEA
2010
2011
2012
2013
2014
2015
2016
tonn
es s
wt
0
200
400
600
800
1000
1200
1400other
Loins*
Shoulder
Carcase
Leg
Rack
Rack Leg Carcass Shoulder Loins* Other
Source: DAWR. * Backstrap, shortloin, bone-in and bone-less loins
MLA INDUSTRY INSIGHTS South East Asia February 2017 19
Retail • A large proportion of the retail sector in South East Asia is
still dominated by traditional and locally owned businesses. That said, the modern retail format is quickly expanding, with imported lamb readily available at supermarkets in Singapore and urban Malaysia.
MalaysiaWhere do consumers in KL buy Australian lamb?
Supermarket – 46% Hypermarket – 46% Butcher – 4% Wet market – 2% Online – 0% Other – 2%
Source: MLA Global Consumer Tracker, 2016
Key retailers
Supermarket Cold Storage, Jaya Grocer
Hypermarket Jusco, TescoSource: MLA Global Consumer Tracker, 2016
What things do consumers look for on lamb retail pack?
Freshness 56%
All natural 52%
Date packed 50%
Colour of meat 42%
Country of origin 42%
Source: MLA Global Consumer Tracker, 2016
Meat sold at a local market (Vietnam)
Modern retail counter in Malaysia (Maxvalue)
• When buying lamb, consumers in both countries seek freshness and naturalness cues on a pack. In terms of image, Australian lamb is seen by these consumers to have good taste, consistent quality, and produced in an environmentally sustainable manner (Source: MLA Global Consumer Tracker, 2016).
SingaporeWhere do consumers buy Australian lamb?
Supermarket – 69% Hypermarket – 17% Butcher – 8% Wet market – 5% Online – 0% Other – 1%
Source: MLA Global Consumer Tracker, 2016
Key retailers
Supermarket NTUC FairPrice, Giant, Cold Storage
Butcher Hubers, CulinaSource: MLA Global Consumer Tracker, 2016
What things do consumers look for on lamb retail pack?
Freshness 49%
All natural 47%
Date packed 44%
Colour of meat 42%
Country of origin 42%
Source: MLA Global Consumer Tracker, 2016
Other suppliers • Australia is the largest supplier of sheepmeat to the SEA region,
followed by New Zealand.
• For New Zealand, Malaysia is the 9th largest export destination of sheepmeat (in volume, the 13th in value). New Zealand’s export volume to the region has been relatively stable, in comparison to its growth in exports to China.
Sheepmeat exports – Australia and New Zealand
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
YTD
*
‘000
tonn
es s
wt
0
20
40
60
80
100
120
140
160Australia to SEA
NZ to China
NZ exports to SEA
NZ exports to SEA Australia to SEA NZ to China
Source: GTA. SEA = total of 10 ASEAN countries (Indonesia, Singapore, Malaysia, the Philippines, Thailand, Vietnam, Laoc, Cambodia, Brunei and Myanmar) * YTD Jan-Oct
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.20
Market Access Overview Trade agreements Import tariffs Competitors Volume restrictions Technical access
AANZFTA* ASEAN-Australia-New Zealand FTA
0%**Except Indonesia, Cambodia, Laos and Myanmar
NZImport tariff – same as Australia under AANZFTA
N/A Indonesia, Malaysia and Brunei maintain import regulations in accordance with Halal
Best access Major challengesSource: Trade agreements, DFAT, MLA* Australia also has independent free trade agreements (FTAs) with Singapore, Malaysia and Thailand** Tariff will be 0% in Myanmar (2020), Cambodia and in Laos (2021). Cambodia will maintain 35% tariff on bone-less products. Indonesia = 5% for chilled bone-in and all frozen products, including goatmeat.
Australian sheepmeat exports to SEA* – summary table volume – in tonnes swt 2016 % out
of total2015 % out
of total5 year average
(2011-2015)% out
of totalchange 2016 vs 5-yr av.
% in tonnes swt
Total 41,262 100 40,195 100 31,517 100 31 9,745
by storageChilled 1,583 4 1,495 4 1,306 4 21 277
Frozen 39,679 96 38,699 96 30,211 96 31 9,469
by meat typeLamb 15,336 37 14,401 36 12,160 39 26 3,176
Mutton 25,926 63 25,793 64 19,357 61 34 6,569
by storage/ meat type
Chilled lamb 1,222 3 1,145 3 1,041 3 17 182
Chilled mutton 361 1 350 1 266 1 36 95
Frozen lamb 14,113 34 13,256 33 11,119 35 27 2,994
Frozen mutton 25,566 62 25,443 63 19,091 61 34 6,474 Source: DAWR. * Includes SEA 10 countries – Indonesia, Malaysia, Singapore, the Philippines, Thailand, Vietnam, Brunei, Laos, Myanmar and Cambodia
value – in A$ 000 % in A$ 000
Total 220,179* 100 229,285 100 169,262 100 30 50,917
by meat typeLamb 97,161* 44 98,236 43 82,038 48 18 15,123
Mutton 123,019* 56 131,049 57 87,224 52 41 35,795 Source: ABS/GTA. 2016* = Moving Annual Total (MAT), November 2015 to October 2016.
Australian sheepmeat exports to Singapore – by major cut (in tonnes swt) % in tonnes swt
Lamb
Leg 730 34 667 33 608 33 20 122
Carcase 357 17 353 17 289 16 23 67
Shoulder 319 15 269 13 213 12 50 106
other 735 34 738 36 714 39 3 21
Total Total 2,141 100 2,027 100 1,824 100 17 316
Mutton
Carcase 5,057 54 4,615 52 3,867 53 31 1,190
Leg 2,879 31 2,766 31 2,185 30 32 694
Manufacturing 1,102 12 960 11 917 13 20 185
other 295 3 542 6 304 4 -3 -9
Total Total 9,333 100 8,883 100 7,273 100 28 2,060 Source: DAWR
Australian sheepmeat exports to Malaysia – by major cut (in tonnes swt) % in tonnes swt
Lamb
Shoulder 7,332 75 6,427 72 4,391 67 67 2,941
Carcase 883 9 1,058 12 855 13 3 28
Leg 445 5 524 6 526 8 -15 -81
other 1,081 11 891 10 812 12 33 269
Total Total 9,741 100 8,901 100 6,584 100 48 3,157
Mutton
Carcase 8,138 54 8,875 59 5,274 52 54 2,864
Manufacturing 2,743 18 2,578 17 2,396 23 14 347
Shoulder 2,470 17 2,304 15 1,495 15 65 974
other 1,583 11 1,206 8 1,051 10 51 532
Total 14,933 100 14,963 100 10,216 100 46 4,717 Source: DAWR
MARKET SNAPSHOT SHEEPMEAT
European Union
FOR FURTHER INFORMATION VISIT US ONLINE AT:www.mla.com.au or email us at: marketinfo@mla.com.au
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.
MLA INDUSTRY INSIGHTS European Union February 2017 21
Population
Households earning US$15000+ p.a.
Households earning US$35000+ p.a.
505.9 in 2016
508.2 in 2020
196.7 in 2016
218.9 in 2020
104.9 in 2016
129.0 in 2020
In millions In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection includes EU-28 countries
Source: BMI Research, 2016 estimate & 2020 projection includes EU-28 countries
Source: BMI Research, 2016 estimate & 2020 projection includes EU-28 countries
Australian sheepmeat exports – volume
Australian sheepmeat exports – value
Proportion of key cuts
Chilled lamb – 31% Chilled mutton – 0% Frozen lamb – 39% Frozen mutton – 30%
Lamb – 74% Mutton – 26%
Leg – 58% Manufacturing – 15% Shank – 15% Chump – 7% other – 6%
Total 16,471 tonnes swt Total A$ 119.6 millionSource: Department of Agriculture and Water Resources (DAWR),
Source: GTA, MAT (Moving Annual Total) November 2015 to October 2016
Source: DAWR, CY 2016
Australian sheepmeat exports by country
Meat consumption
United Kingdom – 75% France – 13% Other – 12%
Pork
20.9 21.0
13.7 14.1
7.9 7.71.1 1.2
Poultry Beef Sheepmeat
2016 2020
Source: DAWR, CY 2016
In million tonnes cwtSource: European Commission, Prospects for EU agriculture markets and income 2016-2026, OECD-FAO
The European Union covers 28 European countries with the population size of some far greater than others. Consumption of red meat is expected to increase on the back of slightly improved economic conditions and lower meat prices. Ireland, Greece, Spain, France, Romania and UK accounted for 72% of sheepmeat consumption in EU in 2016. The UK is the largest destination in the EU with sheepmeat exports accounting for approximately 75% of Australia’s total exports.
The challenges and opportunities in the EU for Australian sheepmeat include:
• A growing population and an increase in private consumption are expected to continue. Consumer demand for lamb is expected to remain steady driven by lamb consumption within the Muslim community.
• Tightening supplies are expected to support Australian lamb prices this year with New Zealand sheep meat production also set to slightly decline.
• Social factors such as health concerns for an ageing European population, animal welfare and environmental issues will be challenges for the red meat industry.
• Market access restrictions will continue to hinder exports and therefore improving market access remains a priority.
This report covers EU28 unless otherwise stated. EU28 – Austria, Belgium, Bulgaria, Croatia, Cyprus Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.
22 MLA INDUSTRY INSIGHTS European Union February 2017
Consumers • There is growing importance of social concerns and the source
of origin of meat products among European consumers. Strong interest in lamb from ethical production systems which is raised with a high degree of animal welfare, sustainable carbon footprint and of reliable eating quality is a high priority amongst EU citizens.
• Sheepmeat consumption in countries such as UK, Ireland and Greece is traditionally linked to production cycle. In other EU countries, purchasing decisions are motivated by consumer demand at culturally significant times and food trends in emerging markets.
• Total EU meat consumption has shown a recovery since 2014 attributed to improved economic conditions and growth in population.
EU meat consumption by meat types
201
0
2011
2012
2013
2014
2015
2016
f
2020
f
‘000
tonn
es c
we
0
10000
20000
30000
40000
50000Poultry meat
Pig meat
Sheep and goat meat
Beef and veal meat
42,013 41,913 41,451 41,038 42,059 43,374 43,756 43,992
Beef & Veal Sheep & Goat Pork Poultry
Source: European Commission
• Sheepmeat is the least consumed protein in the EU (in comparison to Beef, Pork & Poultry) with sheepmeat consumption in some countries greater than others. The protein accounts for only 3% of total meat consumption at 2.1kg per capita in 2016.
• EU sheepmeat consumption per capita has declined more rapidly than consumption of other meats, down 26% between 2005 and 2016, compared with -10% for beef, -5% for pigmeat and +16% for poultry due to decreased supply and affordability. Among important consumers of sheepmeat, only Romania registered a rise in consumption per capita. (Source: GMC 2016).
• Ireland, Greece, Spain, France, Romania and UK accounted for 72% of sheepmeat consumption in EU in 2016 (Source: GMC 2016). Overall sheepmeat consumption in EU is forecast to increase slightly over the next few years.
Sheepmeat Consumption 2016
‘000
tonn
es c
we
0
50
100
150
200
250
300
Aus
tralia
Irela
nd
Gre
ece
Spai
n
Fran
ce
Rom
ania UK
Source: Gira GMC16, FAO-OECD EU countries include goatmeat.
• United Kingdom is the biggest consumer of sheepmeat in the EU, consuming 26% of EU’s total sheepmeat in 2016. The majority of Australian lamb exported to the United Kingdom primarily goes into foodservice.
Production • The EU produced 929,000 tonnes of sheepmeat in 2016
(Source: European Commission). The United Kingdom remains the largest sheepmeat producer in the region, accounting for over 30% of total EU sheep production in 2016.
• EU sheepmeat production registered a slight 1% increase in 2016 compared to 2015 (Source: European Commission). Increased numbers were processed by France, Romania and Spain whereas poor seasonal conditions affected turnoff from the UK, Ireland and Greece. (Source: GMC 2016).
• The EU is not self-sufficient in sheepmeat production as demand outstrips domestic production capabilities. By 2026 the EU will require an additional 229,000 tonnes from overseas markets to meet domestic requirements.
• In the next five years, the EU sheep flock and production rates are expected to rise marginally with a higher concentration in fewer countries. (Source: GMC 2016).
EU Sheepmeat Production by country – 2016
UK – 32% France – 12% Ireland – 6% Romania – 10% Spain – 14% Greece – 10% Other – 16%
Source: Gira GMC16, Incl. estimated unofficial production
EU Sheepmeat Production and Consumption
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
‘000
tonn
es c
wt
0
260
520
780
1040
1300Imports
Exports
Consumption
Net Production
Net production Consumption Exports Imports
Source: European Commission Prospects for EU agriculture markets and income 2016-2026
MLA INDUSTRY INSIGHTS European Union February 2017 23
Opportunities • European consumer confidence is improving with private
consumption* within the EU forecast to increase from USD8.8 billion in 2016 to USD9.6 billion in 2020, up 9% (Source: BMI Research).
Across key member states, economic growth and household spending on meat is expected to increase. * Private consumption is the sum of all household spending on goods and services within the economy.
Annual meat sales, USDmn
‘000
USD
mn
0
10
20
30
40
50
Australia France Germany Italy Spain UK
2016 2020
Source: BMI Research
Macroeconomic variables
Country GDP Per capita
2016
GDP Per capita 2020
% growth
Population (millions)
Population 2020 % growth
Germany 42,260 3% 80.7 0%
UK 40,192 12% 65.1 2%
France 37,747 1% 64.7 2%
Italy 30,043 -1% 59.8 0%
Spain 26,021 6% 46.1 0%
Source: BMI Research accessed January 2017, estimates
Market Access • Australia’s current red meat access is limited by the EU’s highly
restrictive import regime – involving low volume import quotas and high out of quota import tariffs. The EUs regime is in stark contrast to the majority of other Australian export markets.
• Current trading arrangements between Australia and the EU (including the UK) will remain unchanged for the next two years (until April 2019) while Brexit negotiations are carried out.
• It has been announced that Australia and the EU will begin procedures to secure a closer bilateral trade partnership – the precursor to launching formal free trade agreement (FTA) negotiations between the two parties.
Sheepmeat quota allocation by country
New Zealand
Australia
Argentina
Uruguay
Chile
Iceland
Others
228,254
19,186
23,000
5,800
7,600
1,850
1,020
Source: European Commission
Other suppliers • Australia’s sheepmeat competitors have a distinct market
access advantage in the EU.
• New Zealand has the largest share of EU sheepmeat imports under a 228,254 tonne quota.
• As a consequence of tighter New Zealand meat supplies expected in 2016/2017 and the weak pound against the New Zealand dollar, New Zealand sheepmeat exports are likely to be impacted in 2017.
Imports by major supplier
2010
20
11
2012
2013
2014
2015
2015
YTD
*
2016
YTD
*
‘000
tonn
es s
wt
0
500
1000
1500
2000OtherArgentinaFalklandsIcelendUruguayMacedoniaChileAustraliaNew Zealand New Zealand Australia Chile Macedonia Uruguay
Iceland Falkland Islands Argentina Other
Source: GTA * YTD Jan-Oct
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.24
Market Access Overview Trade agreements Import tariffs Competitors Volume restrictions Technical access
EU FTA currently being scoped.
In quota: 0%; above quota: 12.8% + 90.2-311.8 euro/ 100 kg
New Zealand has a quota of 228,254, far greater than Australia’s quota.
Access remains limited to 19,186 tonne quota (carcase weight equivalent; calendar year).
Technical barriers to trade for the sheepmeat in Europe largely derive from Member States differing interpretation of EU legislation. These are not as prevalent barrier to trade as the economic barriers facing Australian sheepmeat exports to the EU.
Best access Major challengesSource: Trade agreements, DFAT, MLA * European Commission also applies a 13% VAT on most items (muscle cuts, offal) and 17% on processed
Australian sheepmeat exports to EU – summary table volume – in tonnes swt 2016 % out
of total2015 % out
of total5 year average
(2011-2015)% out
of totalchange 2016 vs 5-yr av.
% in tonnes swt
Total 16,471 100 16,195 100 16,800 100 -2 -328
by storageChilled 5,145 31 5,910 36 5,848 35 -12 -704
Frozen 11,327 69 10,285 64 10,951 65 3 376
by meat typeLamb 11,512 70 10,656 66 12,301 73 -6 -789
Mutton 4,959 30 5,539 34 4,499 27 10 460
by storage/ meat type
Chilled lamb 5,145 31 5,910 36 5,848 35 -12 -703
Chilled mutton - 0 0 0 1 0 -100 -1
Frozen lamb 6,368 39 4,746 29 6,453 38 -1 -86
Frozen mutton 4,959 30 5,539 34 4,498 27 10 461 Source: DAWR
value – in A$ 000 % in A$ 000
Total 119,537* 100 140,286 100 130,874 100 -9 -11,337
by meat typeLamb 88,315* 74 98,990 71 99,774 76 -11 -11,459
Mutton 31,222* 26 41,296 29 31,101 24 0 121 Source: ABS/GTA. 2016* = Moving Annual Total (MAT), November 2015 to October 2016.
Australian lamb exports to EU – by major cut (in tonnes swt) % in tonnes swt
Leg 6,689 58 6,170 58 7,069 57 -5 -380
Manufacturing 1,676 15 1,182 11 1,223 10 37 453
Shank 1,673 15 1,829 17 2,372 19 -29 -699
Chump 749 7 882 8 811 7 -8 -62
Boneless Loin 211 2 148 1 242 2 -13 -31
other 513 4 445 4 584 5 -12 -71
Total 11,512 100 10,656 100 12,301 100 -6 -789 Source: DAWR
MARKET SNAPSHOT SHEEPMEAT
MENA (Middle East & North Africa)
FOR FURTHER INFORMATION VISIT US ONLINE AT:www.mla.com.au or email us at: marketinfo@mla.com.au
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.
MLA INDUSTRY INSIGHTS MENA February 2017 25
MENA* (Middle East and North Africa) is a large, complex region with varied consumer markets. Consumer confidence and spending are impacted by factors such as oil & gas prices and conflict but long-term socio-economic drivers bode well for imported sheepmeat demand in a number of countries. Challenges and opportunities in MENA for Australian sheepmeat:• Sheepmeat is an important protein in the region,
with consumption and import demand forecast to increase in a number of markets, particularly GCC** countries.
• Whilst imported mutton goes mostly into the lower tier foodservice sector, regional growth drivers of imported lamb demand are: increasing disposable incomes, urbanisation, westernisation, a young population, large expat professional populations and a developing tourism sector.
• The retail sector remains fragmented, even in GCC countries, but retail development growth is expected to increase, accompanied by growth in chilled red meat sales.
• Markets with developing tourism sectors are experiencing growth in demand for premium lamb cuts in the high-end foodservice sector.
• Technical barriers to trade are significant and differ between countries.
Population
Households earning US$15000+ p.a.
Households earning US$35000+ p.a.
430.0 in 2016
459.8 in 2020
16.8 in 2016
31.4 in 2020
3.8 in 2016
7.3 in 2020
In million In million households In million householdsSource: BMI Research, 2016 estimate & 2020 projection *Countries: Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, UAE, West Bank And Gaza, Yemen
Source: BMI Research, 2016 estimate & 2020 projection*Countries: Bahrain, Egypt, Iran, Jordan, Kuwait, Morocco, Qatar, Saudi Arabia, Tunisia, UAE, Israel, Iraq
Source: BMI Research, 2016 estimate & 2020 projection*Countries: Bahrain, Egypt, Iran, Jordan, Kuwait, Morocco, Qatar, Saudi Arabia, Tunisia, UAE, Israel, Iraq
Australian sheepmeat exports – volume
Australian sheepmeat exports – value
Proportion of key cuts
Chilled lamb – 47% Chilled mutton – 6% Frozen lamb – 10% Frozen mutton – 37%
Lamb – 66% Mutton – 34%
Carcase – 67% Leg – 15% Shoulder – 6% other – 12%
Total 111,016 tonnes swt Total A$ 636.6 millionSource: Department of Agriculture and Water Resources (DAWR), CY 2016
Source: GTA, MAT (Moving Annual Total) November 2015 to October 2016
Source: DAWR, CY 2016
Australia’s share of imports
Meat consumption
Saudi Arabia
62% 69%
UAE
10.88
4.172.42
Poultry Beef Sheepmeat
2016
In million tonnes cwtSource: GTA, based on MAT volume per country Source: GIRA, 2016 estimate and 2020 projection (20 countries: Morocco, Algeria, Tunisia, Libya, Egypt, Saudi Arabia, United Arab
Emirates, Bahrain, Kuwait, Qatar, Oman, Yemen, Jordan, Palestine, Lebanon, Israel, Turkey, Syria, Iraq, Iran.)
* Unless otherwise stated, in this report MENA includes 29 countries: (Middle East) Afghanistan, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Pakistan, Palestinian Auto Zone, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, Yemen; (North Africa) Algeria, Ivory Coast, Gambia, Guinea, Liberia, Libya, Morocco, Nigeria, Senegal, Sudan, Tunisia. ** Gulf Cooperation Council countries are highlighted above in blue.
26 MLA INDUSTRY INSIGHTS MENA February 2017
Foodservice • In some markets that are developing their tourism sectors, such
as Dubai, Saudi Arabia and Qatar, demand in the high-end foodservice sector is expected to continue to grow for chilled lamb cuts such as boneless loin, rack and shank.
• The bulk of Australian frozen mutton imports, which are chiefly carcase and leg, is used in the lower-tier catering sector.
• In Bahrain, lamb carcases go from butchers into the foodservice sector. However, since the lifting of government subsidies from late 2015, mutton has replaced lamb.
Australian chilled lamb exports to MENA – selected cuts
2011
2012
2013
2014
2015
2016
tonn
es s
wt
0
1000
2000
3000
4000
5000SHOULDER
RACK
BONE-IN LOIN
SHANK
BONELESS LOIN
Shoulder Rack Bone-In Loin Shank Boneless Loin
Source: DAWR
Consumers • Although economic growth prospects in the MENA region are
strongly impacted by external factors, such as oil prices and conflict, increasing urbanisation, growing disposable incomes, westernisation, a young population and large expatriate population are key growth drivers for imported red meat demand.
• Sheepmeat is an important part of MENA diets, though per capita consumption in some countries is higher than others.
Per capita sheepmeat consumption, 2016f
kg/h
d/pa
0
4
8
12
16
20
24
28
Bah
rain
Qat
ar
Kuw
ait
UA
E
Om
an
Jord
an
Aus
tralia
Alg
eria
Saud
i Ara
bia
Tuni
sia
Liby
a
Isra
el
Source: GIRA, FAO-OECD
• Demand for sheepmeat imports also varies, with greatest demand from Saudi Arabia and UAE, followed by Jordan and Qatar. Australian lamb has a high profile and is well-regarded in these markets.
• Sheepmeat is the most loved protein in the hearts and minds of Gulf States consumers, although actual consumption is dominated in volume and frequency by chicken due to its price advantage.
“I feel very positive about…”
UAE
SaudiLamb
Chicken
Beef
65%
65%
50%
46%
42%
32%
Saudi Arabia UAE
Source: MLA Global Consumer Tracker, 2016
• Along with a traditional regional preference for lean meat, some consumers are developing a stronger health awareness, which may impact on their meat and lamb consumption.
• Utilisation of Australian sheepmeat varies somewhat by country. In UAE, our product goes into both retail and foodservice, whilst in Oman and Saudi Arabia, a significant proportion (especially frozen mutton) goes into foodservice, particularly low end catering. In Qatar and Bahrain, carcases go into butchers, where they are cut up for sale to consumers.
Trade access • For Australian sheepmeat exporters, tariff barriers are generally
not onerous but there are significant technical barriers to trade. Those associated with product age and expiry dates have the biggest impact on Australian red meat exports.
• The majority of Australian sheepmeat exported to MENA is to GCC countries, which generally have zero tariffs on chilled meat and 5% on frozen and processed meat and offal. Some countries (Morocco, Israel, Egypt, Jordan) have more severe tariff barriers for some product categories.
• Religious slaughter is an official requirement for import of meat and meat products into most MENA countries.
• There are currently no protocols for green runners (except with Jordan, Bahrain, Egypt and Lebanon), casings (except Lebanon), edible tallow, gelatine and collagen, skins, hides or rendered products for most MENA countries.
Key technical barriers to trade: • There are regional inconsistencies for shelf life expiry dates.
• The GSO sets GCC standards for shelf life which limits vacuum packed sheepmeat to 70 days, 21 days for chilled, 9-12 months for frozen meat and 4-9 months for frozen offal. However, UAE and Jordan recognise a 90 day limit for vacuum packed meat.
• There are onerous document legalisation requirements and inconsistent labelling and packaging requirements across the region.
• For Jordan, the net weight of sheep carcases must not exceed 20kg.
MLA INDUSTRY INSIGHTS MENA February 2017 27
Retail • MENA lamb product imports are primarily sold through the retail
channel, with chilled lamb carcase being most in demand, as well as smaller but significant volumes of leg and shoulder. Small volumes of premium cuts are available in tier 1 retail with demand expected to grow.
• Apart from the few wealthier GCC markets, the MENA region’s mass grocery retail sector is quite fragmented, with only a small proportion classified as organised.
Organised retail as a proportion of total retail, 2017f
%
0
25
50
75
Aus
tralia
Qat
ar
Bah
rain
UA
E
Om
an
Isra
el
Saud
i Ara
bia
Leba
non
Mor
occo
Source: IGD
• Reflecting their differing levels of development and cooking preferences, consumers in Saudi Arabia are more likely to buy lamb from butchers and wet markets, whilst more UAE consumers use hypermarkets. They are also somewhat different in their sheepmeat purchase decision-making.
I mainly buy lamb from…
Saudi Arabia UAE
Hypermarket – 40% Wetmarket – 30% Butcher – 27% Convenience – 4% Supermarket – 4%
Hypermarket – 52% Wetmarket – 26% Butcher – 11% Convenience – 5% Supermarket – 5% Other – 1%
Source: MLA Global Consumer Tracker, 2016
Influences me when buying lamb…
Saudi Arabia UAE
Display/leaflet in store TV show/cooking show
Friend/relative word of mouth Celebrity chef endorsement
An advert on TV Radio show/cooking segement
Newspaper, magazine article Friend/relative word of mouth
Radio show/cooking segement An advert on TV/Radio
Source: MLA Global Consumer Tracker, 2016
• Key food retailers in the region where consumers purchase Australian sheepmeat from include Carrefour, Lulu, Panda and Sultan Centre.
• In the MENA region, home-cooking of sheepmeat dishes like stews and slow cooking, grilling of cubes for kebabs and mince as a filling for pastries and kofta are widespread. Grilling of prime cuts is also popular in the region.
Other suppliers • Sheepmeat import demand in MENA is expected to continue
to grow as urbanisation, desertification and conflict negatively impact domestic sheep rearing.
• Australia has traditionally been the region’s main source of sheepmeat and live sheep, accounting for around two-thirds of imports in 2016 (Source: GTA).
• Other key suppliers: – NZ: export significant volumes of lamb, particularly
forequarter, mostly to Jordan and Saudi Arabia and smaller quantities of mutton.
– India and Pakistan: India supplies mostly chilled but also some frozen mutton to carcase UAE, Saudi Arabia, Qatar and Kuwait.
Sheepmeat exports to MENA by supplier
2007
2008
2009
2010
2011
2012
2013
2014
2015
2015
YTD
*
2016
YTD
*
‘000
tonn
es s
wt
0
50
100
150
200Other
India
NZ
Australia
Australia NZ India Other
Source: DAWR, GTA *YTD Jan-Sep (NB: Includes Lamb and Mutton; Excludes ovine offal and goat meat)
Live exports • In 2016, Australia’s key live sheep export markets in MENA
were Kuwait and Qatar, both seeing significant growth on 2015. Other important markets were Jordan, UAE, Israel and Oman.
• In 2016, Australia exported just over 1.85 million head of live sheep to the region (Source: DAWR, ABS).
• Live sheep imports generally increase in the second half of the year as an important element in festival celebrations.
• Australia’s key competitors in the live export market are India, Somalia and Sudan, as well as Romania, Georgia and Spain.
© Meat & Livestock Australia, 2016. ABN 39 081 678 364. MLA makes no representations as to the accuracy of any information or advice contained in MLA’s Market snapshot and excludes all liability, whether in contract, tort (including negligence or breach of statutory duty) or otherwise as a result of reliance by any person on such information or advice. All use of MLA publications, reports and information is subject to MLA’s Market Report and Information Terms of Use. Please read our terms of use carefully and ensure you are familiar with its content.28
Market Access Overview Trade agreements Import tariffs Competitors Volume restrictions Technical access
Australia-GCC FTAUnder negotiation since 2007. Four rounds of negotiations have been held to-date, the last one in 2009.
GCC countries generally:• 0% for chilled meat,
5% for frozen• Average of 2.5% for
chilled carcases/half carcases, 5% for frozen
• 0% for chilled ovine offal, 5% for frozen
Morocco: • 200% duty on sheepmeat,
54% on offalTurkey: • 225% duty on sheepmeat
and offal
• NZ & India access currently same as Australia
• NZ announced late 2016 re-newed efforts to verify, ratify & sign the NZ-GCC FTA, after negotiations concluded in 2009. This would result in 0% duty on frozen meat.
Quota restrictions in Tunisia and Palestine are not currently significant impediments
• Numerous technical barriers to trade that vary by country
• Key barriers relate to: shelf life, importer labelling, product coding, document legalisation and quality inspections
Best access Major challengesSource: Trade agreements, DFAT, MLA
Australian sheepmeat exports to MENA – summary table volume – in tonnes swt 2016 % out
of total2015 % out
of total5 year average
(2011-2015)% out
of totalchange 2016 vs 5-yr av.
% in tonnes swt
Total 111,016 100 119,954 100 105,113 100 6 5,903
by storageChilled 59,250 53 56,059 47 45,773 44 29 13,477
Frozen 51,766 47 63,895 53 59,340 56 -13 -7,574
by meat typeLamb 62,853 57 69,805 58 57,541 55 9 5,312
Mutton 48,162 43 50,149 42 47,572 45 1 591
by storage/ meat type
Chilled lamb 52,053 47 54,166 45 40,866 39 27 11,187
Chilled mutton 7,197 6 1,893 2 4,907 5 47 2,290
Frozen lamb 10,801 10 15,640 13 16,675 16 -35 -5,875
Frozen mutton 40,965 37 48,255 40 42,665 41 -4 -1,699 Source: DAWR
value – in A$ 000 % in A$ 000
Total 636,643* 100 710,382 100 544,961 100 17 91,681
by meat typeLamb 421,819* 66 465,401 66 343,446 63 23 78,373
Mutton 214,824* 34 244,981 34 201,515 37 7 13,308 Source: ABS/GTA. 2016* = Moving Annual Total (MAT), November 2015 to October 2016.
Australian lamb exports to UAE – by major cut (in tonnes swt) % in tonnes swt
Carcase 12,877 62 12,123 64 9,814 63 31 3,062
Leg 3,651 17 3,198 17 2,566 16 42 1,085
other 4,376 21 3,713 20 3,205 21 37 1,171
Total 20,904 100 19,034 100 15,586 100 34 5,319 Source: DAWR
Australian lamb exports to Qatar – by major cut (in tonnes swt) % in tonnes swt
Carcase 15,240 96 13,196 95 7,179 91 112 8,061
Leg 278 2 272 2 308 4 -10 -30
other 386 2 472 3 405 5 -5 -19
Total 15,904 100 13,941 100 7,893 100 101 8,011 Source: DAWR
Australian lamb exports to Jordan – by major cut (in tonnes swt) % in tonnes swt
Carcase 8,487 69 10,058 68 7,139 56 19 1,348
Shoulder 1,534 13 2,053 14 1,801 14 -15 -266
other 2,235 18 2,627 18 3,785 30 -41 -1,550
Total 12,256 100 14,738 100 12,725 100 -4 -468 Source: DAWR
Recommended