While Cheerios and chicken may be popular today, business information analysts IBISWorld have released their forecast for what consumers will be piling into shopping trolleys in five years’ time.
With slower economic growth encouraging more frugal supermarket spending, and increasing health consciousness at the forefront of many a shoppers’ mind, the way we fill our trolleys is changing, according to IBISWorld’s senior analyst, Linda Dougherty.
Demand for dairy
Dairy consumption is on the rise, and yoghurt is high on the shopping list for many Australian families – a trend that is expected to continue.
“Yoghurt is a convenient food because it’s relatively portable and suitable to take to the office as well as to include in kids’ lunch boxes. Over the next few years we can expect to see an increased market share for functional yoghurts, such as those with added Omega-3, antioxidants, vitamins and pro-biotic cultures; as well as organic versions,” said Dougherty.
An ageing population should encourage greater dairy consumption due to concerns about osteoporosis, and we can also expect to see stronger demand for cheese. “Reduced fat and specialty cheeses will be in most shopping baskets of the future, particularly fortified and organic cheeses,” she tipped.
More red meat
Pork is likely to be less popular in coming years due to lower production and higher relative prices compared to beef, lamb and poultry, which will all enjoy increased consumption.
“Meat prices should fall slightly as meat production increases due to the rebuilding of herds. However, it would be a different story if grain prices were to rise and agriculture were included in the emissions trading scheme. Then we’d see rising meat production costs, lower output and consumption, and higher prices.
“Under an emissions scheme, demand is forecast to shift away from lamb and beef towards poultry and pig meat products, as poultry and pigs are lower emitters,” explained Dougherty.
Organic red meat and poultry will continue to increase their market share, and IBISWorld expects meat producers will invest further in promoting their products based on their companies’ livestock qualities and characteristics to distinguish their meat from the competition.
Favouring fish
Boosted by concerns about healthy eating, overall demand for seafood is set to increase by 2013. However, while seafood prices have declined in real terms in recent years thanks to increased imports from South East Asia and NZ, they are now set to rise. Higher seafood prices and greater increases in production from fish farms relative to wild-caught seafood will lead Australians to consume more seafood from farms, particularly bluefin tuna and barramundi.
IBISWorld also expects increased awareness of seafood products with environmental sustainability credentials, both for aquaculture and wild-caught species, such as the Marine Stewardship Council logo for wild-caught species.
Bread is back with wholegrains
After some time in the wilderness, bread is back. The popularity of low and no-carb diets, such as Atkins, is waning as more people realise the importance of wholegrains in a well-balanced diet.
Specialty bakers, such as Philippa’s and Laurents will continue to expand their market share with premium products and those perceived to offer additional health benefits, but prices will remain relatively high due to the ongoing demand for grains to produce biofuels.
The rise in per capita consumption of wholegrains is predicted to exceed that of meat products and be similar to dairy products over the next five years, said Dougherty.
Craving confectionery
Overall, our consumption of confectionery is declining because of health concerns and an ageing population, since teenagers are the major consumers of sweets and chocolates.
There are, however, a number of product categories bucking this trend. Chewing gum will continue to be popular, particularly as a result of promotions boasting dental health benefits. We can also expect to see more of chocolate, but only the premium, dark, organic and fair trade varieties.
According to Dougherty, “confectionery may also weather an economic downturn better than some other food products as people who purchase sweet treats will often scrimp and save on other grocery items to be able to afford them. People also tend to eat more junk food in stressful times.
“Customers are reading labels and buying more products which support their views on ethical consumerism, whether that’s items that are not genetically modified, or products that haven’t been exposed to pesticides or antibiotics, or those from a sustainable agriculture or fair trade environment,” said Dougherty.
“The result is good news for products which address those concerns, such as Green and Black label chocolate, fair-trade chocolate, or chocolate made from beans produced in a particular country in the confectionery aisle.”
Eating extra eggs
IBISWorld expects we’ll be eating more eggs in five years time as consumers become increasingly aware of the new positive health message about eggs, aided by strong promotion by the Australian Egg Corporation Limited. Dougherty has also anticipated the expansion of private label share in free range and organic eggs lines, which will increase price competition and reduce the price of non-caged eggs.
Oil over dairy
Product innovation is driving the success of oilseed products in this category, with spray-on oils and cholesterol-lowering spreads growing in popularity, despite their higher price points, when compared to butter and traditional margarines.
“Over the next five years we expect oilseed prices will remain high, but that won’t stop consumers from making the switch from dairy-based fats to oilseed products,” said Dougherty.
Forgetting fruit?
While in many categories Australians are selecting healthy products over traditional favourites, we’re still lagging behind when it comes to the recommended daily intake of fruit. Over the past five years our expenditure on fruit fell, but IBISWorld expects that situation will reverse over the coming decade.
“Campaigns such as ‘Go For 2 and 5’ will start to sink in and clear up the mixed messages some consumers have taken on board because of the high sugar content of some fruit, and the fact a number of popular low carbohydrate diets condoned severely restricted fruit intake,” said Dougherty.
“We believe price growth for fruit and nuts will accelerate and expenditure will rise by around 2% a year for the next five years. The most popular fruit choices are likely to be staple items such as apples, bananas and stone fruits, as well as some increase in the consumption of berries (high in anti-oxidants) and tropical varieties, such as pawpaw.”
Versatile veggies
Over the past five years, our spending on vegetables has risen 2.8% a year as a result of increased consumption, as well as higher prices. “The health benefits of eating vegetables have contributed to their growing popularity,” explained Dougherty.
“Innovative and more convenient packaging is also a major factor, such as the availability of pre-cut vegetables, pre-prepared salad leaves and mixed bags of stir-fry vegetables or soup ingredients which eliminate the onerous task of washing, peeling and chopping veggies – making them much more appealing for today’s time-poor shoppers.”
IBISWorld forecasts household vegetable consumption will grow at around 1.9% a year between now and 2013.
Thirst vs thrift
In the future we’re likely to spend more on alcohol and less on every other drink category. Our love affair with soft drinks will come off the boil somewhat as prices rise moderately and health concerns mount, and yet we’ll boost our spending on alcohol by around 1.3% a year.
“The price of beer and spirits has climbed consistently over the last five years, while wine prices have fluctuated. Over the next five years beer and spirits will continue their upward trend, while wine prices will also grow because of more constraints on domestic supply. However, while prices rise, per capita alcohol consumption is expected to remain steady,” said Dougherty.
Ready meals
Bucking the trend towards healthy eating elsewhere in the shopping basket is the processed food category – currently growing faster than most other categories.
“Despite the fact that it’s often not that healthy, the convenience of processed foods means this category is unlikely to decline any time soon. In addition, the current economic slowdown will cause people to dine out less often and switch to lower priced options,” said Dougherty.
The green light for GM?
Already, some processed foods containing GM ingredients are on our shelves, made from crops grown overseas. They include corn chips, breakfast cereals, bread, cakes, margarines, biscuits, soups, soy products and oils. <[
Though some genetically modified fruits and vegetables (such as tomato and rockmelon) are already approved for sale in the US, the EU, Canada and Japan, IBISWorld doesn’t think we’re likely to see them for sale in Australia within five years because of the time it takes to commercialise new products and to gain approval for mass production and trade.
“Having said that, it will happen. Currently trials of genetically modified pineapples, papayas and grapevines are being undertaken, with banana trials beginning later this year,” said Dougherty.
“People are coming around to the idea of GM foods, especially as they learn more about the way GM crops can address environmental concerns such as drought, climate change, rising salinity levels and fuel shortages.
“Another appealing aspect of GM ingredients is the potential to enhance the nutritional properties of some foods by adding vitamins and minerals, such as Omega-3 fatty acids. However, there are also likely to be enhanced fruit and vegetables from selective breeding practices available.”
— Robert Bryant is the general manager of IBISWorld Australia.