Food Export Opportunities in China, Malaysia and Thailand

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1 Australian Food and Grocery Council Food Export Opportunities in China, Malaysia and Thailand Michael Rogers, Manager, Agribusiness Forum

2 Food Export Opportunities in Malaysia, Thailand and China Market Insight Reports Australian Industry Statements Webinars Newsletters Project supported by Austrade Asian Business Engagement Grants This activity has received funding from Austrade as part of the Asian Century Business Engagement Plan. The views expressed herein are not necessarily the views of the Commonwealth of Australia, and the Commonwealth does not accept any responsibility for any information or advice contained herein.

3 OVERVIEW Context for Australian food exports Market Insight Reports Specific Opportunities What next? 3

4 AUSTRALIA S GLOBAL POSITION Agricultural Production in Selected Countries Australia s rank as a global food exporter Country Australia Brazil Canada China European Union Japan United States of America Approximate Value of Agricultural Production in 2012 (USD) $45 billion $188 billion $50 billion $930 billion $473 billion $100 billion $396 billion Source: Calculations from OECD Producer Support Estimates Database Share of World Food Exports in 2011 Rank Country % 1 United States Netherlands Brazil Germany France China Argentina Canada Spain Belgium Italy Indonesia Malaysia Thailand United Kingdom Australia 2.2 Source: UN Statistics Division (2012) & DAFF Australian Food Statistics 4

5 70% INCREASE IN GLOBAL FOOD DEMAND BY 2050 Source: ABARES, Food Demand to 2050: Opportunities for Australian agriculture 5

6 (%) Australia's Global Competitiveness Ranking Australian Food and Grocery Council AUSTRALIA FALLING BEHIND Australia's falling global competitiveness undermines Food Exports Years 25 Food Market Share in Key Markets (LH scale) Australia's Global Competitiveness Ranking (RH scale) Source: World Economic Forum (2013): Global Competitiveness, & calculations from UN Comtrade Database (2014): Food market Share. 6

7 MARKET INSIGHT REPORTS China, Malaysia and Thailand Snackfoods Chocolate Sugar Confectionery Cereal-based Bars Baked Goods Biscuits Baking Mixes Beverages Fruit Juice Tea Premium Cold Beverages Condiments Premium Table Sauces Jams Research undertaken by Tradeworthy, Danny Burrows and Kathrin Kittler 7

8 METHODOLOGY Store checks/surveys Focussed on premium retail outlets in key centres China Shanghai Malaysia Kuala Lumpur Thailand Bangkok Key information on each category (i.e. chocolate, fruit juice, biscuits etc.) includes: price pack size key players and share of supermarket shelf product trends barriers 8

9 SUGAR CONFECTIONERY SHARE OF SHELF Tootsie 7% Veno 4% X-IT 5% Katjes 6% Fini 7% China Tayas 7% Haribo 13% Mentos 4% Fu Ji Ya 26% Perfetti Van Malle - Hard Candy 19% Four Seas (Si Zhou) 2% Mint Plus Chewy Candy (Kheesan) 5% Fruit Plus Chewy Candy (Kheesan) 5% Mentos 7% Sugus 6% Extra, 2% Malaysia Others 17% Markenburg 15% Sugus, 2% Trident, 4% Yupi, 4% Lot100 30% Yupi 10% Dentyne, 15% Kopiko 5% Thailand Others, 10% Haribo, 8% Werther's Original, 5% Fisherman's friend, 30% Mentos, 20% 9

10 SUGAR CONFECTIONERY PRICE, PACKAGE, PROMOTION 10

11 SURVEY DATA AVAILABLE Product & Brand Top 3 Flavours Package Size Price Promotions 11

12 SPECIFIC OPPORTUNITIES Across the three markets there is a growing focus on products with reduced sugar, salt and fat, allergen free and more natural ingredients. In China, there is an opportunity for premium chocolates and biscuits with appropriate packaging to be marketed as gifts In Malaysia and Thailand, wealthy consumers are seeking premium quality chocolate products and are willing to pay for imported product. In Malaysia and Thailand, demand for cereal bars and non-alcoholic beverages is expected to grow rapidly given the broad appeal to the large number of tourists, expatriates and increasingly wealthy locals. Market for table sauces is dominated by local products however Western style sauces are becoming more popular. Growing demand for new flavour combinations which build on local tastes. 12

13 SO WHAT? Opportunities - Despite a decline in Australia s market share in each market, and pricing pressures, foreign retailers and other buyers are seeking Australian product - Opportunities for small orders and production runs of processed food products such as for retailer promotion events Challenges - The strong Australian dollar coupled with high production costs means that Australian products are often some of the most expensive products in China, Malaysia and Thailand o product promotion, such as sampling and retail price promotions, is critical for success in each market. - Exporters need to navigate relevant product registration, retailer listing processes, and labelling requirements for each country given our strict domestic standards and processes, Australian companies and products are often viewed favourably by foreign regulators but exporters need to ensure that they meet often very specific requirements (such as documentation) of foreign regulators. 13

14 WHAT NEXT? Review the reports Available at or request from Talk to others about opportunities Exporters, freight forwarders, foreign importers, distributors State Governments Austrade Food Innovation Australia Limited Australian Food and Grocery Council Develop an export plan with adequate resourcing, long term perspective and commitment 14

15 Australian Food and Grocery Council Thank you

16 CHINA OPPORTUNITIES Chocolates: Gift giving is an important element of Chinese culture. Premium chocolate products with appropriate packaging can be marketed as gifts, particularly for festival celebrations. Sugar Confectionery: There is a trend toward sugar confectionery becoming a more regular snack in the market however there is a preference for less sweet products. Cereal Bars: Demand for healthy cereal bars is growing but currently in early phases of market development. Opportunity exists for Australian exporters to become established as part of growing market. Fruit Juice: Similar to Australia, there is opportunity for premium fruit juice products in coffee shops in China. Opportunity exists for carbonated juice products to be sold as non-alcoholic beverages. Tea: There is currently a strong focus on traditional teas and the market for other types of tea, including flavoured tea, is in the early stages of development. There is an opportunity to promote Australian products as clean and safe however it is a very price competitive market. Premium Cold Beverages: There is a consumer focus on healthy beverages with fruity flavours and vitamins. A strong opportunity for healthy and natural carbonated beverages exists in the market. Biscuits: In a highly competitive market, the opportunity for biscuits is in gift giving, particularly in association with festivals. Products need premium packaging and strong product promotion appropriate for the market. Baking mixes: The market for baking mixes is in the early stages of development as ovens are not yet widely available at home. Cake mixes are more popular than bread mixes and a specific demographic is increasingly baking cakes on the weekend. Premium Table Sauces: Soy sauce is the first choice for Chinese households, with increasing popularity of chili and black bean sauces given the familiarity of flavours. Of western style sauces, Worcestershire and mayonnaise are increasingly popular however new flavour combinations may have greater appeal in a saturated market. Jams: The market for jams is characterised for a preference for less sweet products. Jam products will benefit from heavy promotion, with orange, strawberry, and mixed fruits the current popular flavours. 16

17 MALAYSIA OPPORTUNITIES Chocolates: Single serve portions are popular among health conscious consumers. Wealthy consumers are aware of quality and willing to pay for imported product. Confectionery: There is growing demand for lower sugar candy, and a general preference for hard candy. Popular flavours include fruit mixes, coffee and mint. Cereal Bars: Increasing health consciousness is driving sales of cereal bars with strong demand from foreigners, students and the elderly. Fruit Juice: Orange, apple, pineapple, pink guava, and mixed fruit are popular juices in Malaysia with an increasing focus on health claims and benefits. Tea: Recently, fruit flavoured teas have been successful in the Malaysian market with a range of more traditional teas being widely available. Premium Cold Beverages: Isotonic, milk, and tea based beverages are popular in the Malaysian beverage market. Biscuits: Biscuits are a popular snack food in Malaysia. There is a range of opportunities in both sweet and savoury biscuits. Baking mixes: Home baking is increasingly popular due to the influence of cooking shows on television and has created opportunity for both cake and bread mixes. Premium Table Sauces: Traditional Asian style sauces are popular in Malaysia. There is opportunity to bring new flavours to market with consideration of Malaysian tastes and preferences. Jams: While jam is not a feature of the traditional Malaysian diet, there is demand among tourists, expatriates and young people in Malaysia. Popular flavours include strawberry, pineapple, grape, blackcurrant and mixed fruits. 17

18 THAILAND OPPORTUNITIES Chocolates: Premium retailers are seeking handcrafted boutique products that can be short and/or limited production runs. This creates opportunities for Australian producers to trial products. Confectionery: Thai consumers often prefer sweet candy and there is a growing preference for additive free confectionery. Cereal Bars: The market for cereal bars is expected to grow rapidly in the current market development phase. Cereal bars are increasingly seen by young and wealthy Thais as a healthy option for breakfast or a snack on the go. Fruit Juice: The fruit juice market is expected to grow rapidly in the short term as Thais consume juice as a healthy alternative to other beverages. Growth is expected in both single serve (e.g. 200 ml) and large litre containers. Tea: The largest market for hot tea in Thailand is expatriates and tourists. Most Western style hot tea is imported. Opportunity exists for a wide range of traditional and flavoured tea products. Premium Cold Beverages: Given the tropical climate and large numbers of tourists, there is a wide range of premium cold beverages available in Thailand. The large value of the market (AUD 1.26 billion) and significant growth (above 15 per cent CAGR to 2017) presents opportunity. Biscuits: Strong growth is expected in the biscuits category over the short term. Chocolate, strawberry and butter flavours are popular for sweet biscuits. For savoury biscuits, new and innovative flavours are increasingly popular. Baking mixes: The market for cake mixes is in the early stages of development with chocolate, vanilla and butter being popular flavours. Premium Table Sauces: Traditional Thai sauces (fish, ginger, and chilli) currently dominate the market however Western style sauces (including Worcestershire, mayonnaise and mustard) are enjoying strong growth. Jams: A growing trend is jam on toast for breakfast, with popular flavours being orange, strawberry and mixed fruits. 18