Trends in the Trends in the

Food Industry and Implications for Food Industry and Implications for

Australian OilsAustralian Oils

Daniel Jenshel - Marketing and International Sales ManagerPeerless Foods

Agenda

• Current National Trends - Key Influencing factors

• The oils and Fats market - Segmentation

• Education and future trends

• Bakery & Retail markets

• Industrial Market Trends

• Influence of the consumer on Foodservice Trends

• Foodservice Market Trends

The Oil Market - Segmented

Industrial

Export

Foodservice

Bakery

Retail

Growth

Stable

Growth

Decline

Opportunities

Current Trends

a) Consumer / sociological trends - Dinning out, health, attitudes to fast food, home cooking, time poor etc

c) Regulatory Factors - Food Labeling and endorsements, increased consumer knowledge additives and allergens

b) Economic Factors - Positive or Negative attitude to economic future and proportion spent on dinning out

d) New Cuisine and Dinning experiences - Easy meals, New Cuisine with less oils required

• Need to observe and evaluate the following factors effecting food industry growth and trends:

• Little ‘Hard’ data available as per Retail market (I.e Nielsen Data)

e) Distributor / Retailer power and influence on product offered

Industrial Market(Food Manufacturing)

• Increase interest in uniquely Blended oils to achieve competitive edge through health claims and functionality improvements I.e omega, GMO free, Trans free, Vitamins

• Move away from animal fats: Dietary (Halal, Kosher & Vegetarian) as well as consumer backlash re: saturated fats

• Increased usage in vegetable oils such as canola, cottonseed, soy and sunflower for processed food production - vegetarian and Health reasons

• Overseas trends - Intentional move away from Trans Fatty Acids and Hydrogenation (Esp. USA)

• The search for high performing and healthy oil alternatives

Industrial Market(International Trends)

Foodservice Market(Catering venues, restaurants and cafes)

• Strengthening of centralised national distributors in Foodservice with a focus on price and support for ‘house-brands’ over branded products - often cheaper imported products..

• Cottonseed oil volumes have stabilised creating a premium usage category vs blended vegetable oils and cheap imports, High oleic oils are maintaining premium pricing with low volumes (supply still an issue!).

• Influx of cheap imported vegetable oils with a low barrier to entry, AUD dollar dependant.

• Price sensitive, product becoming a generic ingredient in some venues - hard to differentiate products!

• Important: Oil is seen a ‘hidden ingredient’ and hence is more influenced by cost savings opportunities.

• Niche oils - Grapeseed, avocado, rice bran, tea and selected nut based oils with a culinary and health marketing platform - Have had limited success and impact due to cost.

• Olive oil continues to be adopted as a multi purpose cooking medium (multi-usage)

• Increased awareness of Non Allergenic oils I.e move away from peanut and soy oils

• Increased demand for All purpose vegetable oils for cooking and non frying usage (salads, dressings etc)

Foodservice Market(Catering venues, restaurants and cafes)

• Organic oils still niche market - Venues and consumers still not willing to pay more for Organic produce and oils

Bakery(chains and artisan outlets)

• New Trends include low fat products & VTF (Virtually Trans Free) - I.e low fat pies and muffins - although will consumers accept these offerings? (indulgent and impulse purchasers)

• ..Influenced heavily by costs of ingredients and product functionality which to date has supported Tallow based products

• Labeling laws have created increased interest in this sector and may increase oilseed based products

• Products still dominated by Tallow ingredient.

• Can bakeries increase pricing to cover increased costs of oilseed products and value add ingredients? (low fat etc)

Retail( Oils and Margarine Spreads)

• Age old debate on Butter vs Margarine (Butter industry growing faster than Spreads and ADB better at promoting industry than AOF members)

Influences• Healthier more active lifestyle - Diet and Exercise• More aware and concerned of our Health - Internet information • More educated on health concerns, fears and causes• Association influences and persuaders - NHF, Diabetics Aust.

Trends

• Moving away from blended vegetable liquid oils to canola, sunflower and olive oils

• Consumer support for low fat products and Trans free products

• Decline in margarine spreads due to diet, health and potentiallyhealthier product substitutes - I.e dips, cheese spreads etc

• Nutrition advice - Is fat in the diet good or bad?..media scare campaigns!

Future Trends

• Increase in palm oil prices worldwide will still allow Australian Oilseed market to develop - I.e canola & sunflower, although supply..?

• Increase demand for High Oleic oils as the price becomes more competitive with standard canola and sunflower oils.

• Growth in Industrial and Bakery markets, but stable volumes in Foodservice and possible further decline in retail markets.

• Further R & D into nutritional benefits of oils and the transfer of additives through oils I.e the next plant sterol (functional food) revolution!

• Move away from animal fats and tallow will grow the oilseed market

• Consumers will continue to pressure manufacturers and food establishments to provide cleaner and healthier products such that AOF members need to educate industry and customers in the benefits of Australian Oilseeds

• How will Bio-diesel effect the oilseed market long term (supply and price?

Promoting the Oilseed industry

• Refining

• Free Fatty Acids• Bleaching• Deoderising

• Intersterification

• Filtering

• Fractionation• Triglycerides

• Peroxides • Fats and Oils

The oilseed industry is not seen as a ‘health friendly’Industry and has an identity crisis which we are addressing

via the AOF in the following way!

Introducing theThe Journey of Oilseeds

An AOF -Education Initiative

• Initiative of AOF, Unilever, Goodman Fielder and Peerless Foods

• Education resource developed for primary schools grade 3-4.

• Provides overview of Oilseed process from field to tub / table!

• Utilises NEW characters developed to help explain and educate children on the health benefits of Oilseeds in a fun and unique manner. The resource books contains teachers notes, activities and information for the children to work on and take home.

• Aim: To provide a better overview of oilseed products so children will know and discuss this with parents and hopefully influence purchase

decisions in the long term, based on more accurate information, knowledge and understanding.

• Developed in conjunction with the State Education Bodies

The Journey of OilseedsBackground

• Developed in response to poor consumer knowledge and understanding benefits of fats and oils

• Generally the Dairy Industry do a better job at appearing as a unified body and promoting their industry and products than the Oils and Fats industry

• Need to address the decline in some key Oils base product markets (spreads)

• Need to develop an understanding of the benefits of Oils in our Diets from an early school age

• As an industry, its our responsibility to work as a united body to increase awareness and recognition of Oilseed based products

The Journey of OilseedsCourse Structure

Introducing Olly and Polly

Who take the kids on an Oilseed learning tour…..

The Journey of OilseedsCourse Structure

Teacher’s Story Book

The Journey of OilseedsCourse Structure

Teacher’s Notes / Manual

The Journey of OilseedsCourse Structure

Student Worksheets

The Journey of OilseedsCourse Structure

Lesson Activity Plans

The Journey of OilseedsCourse Structure

Student Wall Chart

A thought to leave you with...

Edible Oils & Oilseeds….

...Will they run Cars or continue to run Human Enginesin the future?

Daniel JenshelMarketing and International Sales Manager

Peerless Foods