In 2014 there was a flurry of inbound investment activity by Asian dairy companies, mostly from China, into the Australian and New Zealand dairy sectors. However Rabobank warns that ongoing growth in import requirements by Chinese and wider Asian dairy companies shouldn’t be taken for granted.
In a recently-released report ‘Magnetic milk – the lure of dairy investment down under’, global agribusiness banking specialist Rabobank said a specific focus for overseas investors in Australian dairy has been on securing access to liquid milk and infant formula.
Report co-author, Rabobank senior dairy analyst Michael Harvey said a quest to secure access to a high-quality, safe milk pool is driving international investment in dairy down under.
“Between 2014 and 2020 we expect China and South East Asia combined to account for almost one third of the increase in global dairy imports,” Harvey said.
“For the New Zealand and Australian dairy sectors – collectively known as the Oceania – preferential market access and geographical proximity are the magnetic forces supporting the investment flows into this region, and they will continue to do so.”
With demand growth in Asia expected to outstrip local supply growth capabilities, and hence drive global trade over the medium-term, many Australian and New Zealand dairy exporters are positioning themselves towards Asia, according to the Rabobank report.
“Many company strategies are heavily focused on capitalising on the growing opportunity presented by dairy demand in Asia,” Harvey said.
“For Oceania processors, the strategic desire is often about building extensive distribution networks and local knowledge to tap into key growth export markets. Strategic partnerships can help smooth market access and thwart the impost of regulatory trade barriers.”
For Australia, improved market access and the country’s competitive positioning are of benefit, but to extract full value, growth of dairy supply is also required to capitalise on opportunities, he said.
New Zealand has already successfully risen to this challenge.
“Australia must grow its milk pool to fully capitalise on the trade opportunity across Asia,” Harvey said.
For all dairy exporters looking to engineer export strategies towards dairy markets in China, a level of caution is now required particularly when it comes to nutritional powders and liquid milk markets.
Harvey said that spectacular rates in recent year’s growth have attracted significant investment both within Oceania and further afield as companies recognise the opportunity.
“Import volume growth is expected to expand, but the rate of growth will be slower over the medium-term as the dairy market matures and retail price points challenge consumers who are facing lower rates of income growth,” he says.
“At the same time, there is significant investment in capacity in many parts of the world generating intense competition and the risk of oversupply.
“Complicating matters, regulation has been tightened, particularly in the Chinese infant formula category, and is still proving unpredictable.”
Looking forward, Harvey notes companies both inside and outside of the Asian region will continue to deepen market relationships and boost cooperation.
Supply chain management and vertical integration is a means for all parties to offer integrated and secure supply chains in an era of heightened demand for food safety, Rabobank said.
While the supermarket code of conduct secured this week is good news, the squeeze on profit margins exists beyond a code.
The squeeze on profit margins can really only be alleviated by food producers that reduce their reliance on supermarket chains to unlock growth and revenue potential, according to Tony Pititto, National Head of Food & Beverage, Grant Thornton Australia.
Pititto said Grant Thornton is pleased to see protection mechanisms secured for Australian food producers “but for many Australian food and beverage companies, unlocking growth potential and increasing margins comes down to reducing reliance on the major supermarket chains.
“The key to reducing reliance on supermarkets is to develop additional distribution and customer channels in Australia. There is just no denying that multiple channels to market will increase profit because different channels will attract a range of profit margins. Consider options like direct selling to restaurants and cafes, or on line sales direct to the consumer.
“Developing overseas markets is another way to increase revenue streams. Tap into new markets, there is a world of growth opportunity in overseas markets, especially in the Asia Pacific region in the wake of the new Free Trade Agreements. Overseas expansion requires careful planning and lots of research; products will most likely need modifying to suit the needs of the new market.
“Innovate your offering to increase your margins. We’re seeing a lot of dynamic food and beverage companies achieving growth by developing product IP and creating new products, both locally and for overseas markets. Businesses can’t demand a greater margin on products that are overflowing on supermarket shelves with a similar offering from competitors.
“We’re also seeing success with food and beverage companies that are investing in their brands. Building up customer loyalty, not only commands a premium that supermarket chains will need to adhere to, but it also opens up the business’ ability to attract capital for growth from either local or overseas sources looking for iconic brands to leverage in new and existing markets,” Pititto said.
The Australian Agricultural Company has officially opened Livingstone Beef in the Livingstone Valley, about 50km southeast of Darwin.
According to ABC Rural, the new abbatoir has started exporting, with the first container sent out of Darwin bound for Hong Kong.
The new facility will process up to 1000 head of cattle a day at full capacity. It will produce export beef, hides and rendered products.
Stock will be sourced from the northern areas of Queensland, South Australia, Western Australia and the Northern Territory, supporting northern Australia's cattle industry where there are currently no processing facilities.
The facility will allow cattle to be processed in northern Australia, reducing transport and freight costs as well as carcase weight loss for northern producers who currently need to truck live cattle large distances to southern processing plants.
At the launch, Prime Minister Tony Abbott said the opening was “a sign of the new hope that has returned to agriculture in Northern Australia.”
“This is the biggest private sector investment in agriculture in Northern Australia for many a long year.”
“I'm also really pleased that thanks to the Free Trade Agreements put in place by Andrew Robb under this Government, that the prospects for our agricultural exports, particularly our beef exports, have never been better.
“Soon, thanks to these Free Trade Agreements, there will be a zero tariff on Australian beef exports to Korea, a zero tariff on Australian beef exports to China and a much reduced tariff on Australian beef exports to Japan, which is our largest beef export market and all of this means that Australian cattle producers have got a magnificent opportunity to export our clean, great produce to the wider world.
“There is so much that we can do for the wider world and what we do for the wider world in beef is obviously immeasurably boosted by the opening of this fine facility here near Darwin today,” Abbott said.
Australia has seen a rise of 1.9 per cent in both the volume and value of wine exports in 2014 according to the latest Wine Export Approval Report December 2014.
The report, released by the Australian Grape and Wine Authority (AGWA), revealed the total Australian wine export volume increased by 1.9 per cent to 700 million litres and total value increased by the same rate to A$1.82 billion. This is the first time exports have risen in value since the global recession took hold in 2007. The average value of exports remained steady at A$2.60 per litre.
Over the last 12 months, Australian wine was exported to 121 destinations by 1,329 exporters and in contrast to 2013, the majority (893 exporters) recorded volume growth. The increase in volume was aided to some degree by the depreciating Australian dollar but a huge Spanish crush in 2013 put downward pressure on bulk wine prices which continued to decline by 2 per cent to A$0.99 per litre. Bulk wine export volumes however increased by 8 per cent to 402 million litres.
In contrast, the average value of bottled wine exports grew 7 per cent to A$4.85 per litre, the highest it’s been in a decade and driven by both demand for Australia’s premium wines (above A$7.50 per litre) in North America, Europe, and much of Asia and a decline in bottled exports under A$5 per litre with more wine shipped in bulk containers to be bottled in-market.
AGWA’s Acting Chief Executive Andreas Clark said the premium price segments saw the strongest growth throughout the year.
“It’s encouraging to see the value of Australian wine exports in positive growth for the first time since 2007 and increasing demand for our premium wines was a major contributing factor to that growth.
“We’ve seen rises in wine exports in all premium price segments: the A$7.50-$9.99 price segment increased by 5 per cent to 15 million litres and by 15 per cent in the A$10.00 and above segment to 17 million litres.
“The ultra-premium above A$50 segment grew 55 per cent, hitting a record A$107 million. While the segment only accounts for 0.8 per cent of the total volume, it contributes 8 per cent of the total value of bottled exports.”
Wine exports in the above A$10 were at A$356 million, just below the record high of A$371 million set in September 2007.
Key figures released in the report by market are as follows:
UK and Europe
The UK remains Australia’s biggest export market by volume dominated by bulk wine exports that are destined for Europe. Total volume increased by 4.5 per cent to 249 million litres.
In 2014, Australian wine exports to Europe increased by 4 per cent to 361 million litres valued at A$581 million. This increase was driven by bulk wine exports, up 8 per cent to 294 million litres, while bottled wine exports declined by 11 per cent to 67 million litres. Despite this decline, the average value of bottled wine exports increased by 6 per cent to A$4.25 per litre.
Two consecutive record domestic harvests have reduced the demand for imported wine in the US. Total Australian wine exports declined by 9 per cent to 164 million litres valued at A$423 million. The decline in exports was mostly seen in the lower price segments, a reflection of the large US harvests.
Bulk wine exports declined by 9 per cent to 54 million litres and bottled wine exports under A$2.50 per litre declined by 79 per cent to 3.1 million litres.
However growth continued in the higher priced segments for the third consecutive year. The US emergence from recession and more buoyant stock markets mean wine consumers may have greater purchasing power to spend more on premium wines, a category that was hit hard during the recession. Exports above A$10 per litre increased by 3 per cent to 1.6 million litres while exports in the A$7.50-$10 segment also increased by 3 per cent to 2.6 million litres.
With a relatively small domestic wine industry, Canada relies heavily on imported wines and Australia was a major source of bulk wine for the market increasing by 48 per cent to 31 million litres during 2014.
However the average value of Australian bulk wine declined by 8 per cent to A$0.82 per litre, likely to be the result of price competition with European and US producers.
Bottle exports weakened down 3 per cent to 30 million litres but average value rose by 2 per cent to A$5.22 per litres.
The austerity measures introduced by the Chinese Government in late 2012 have had the biggest impact on the Chinese imported wine market over the last two years. In 2014 however, total Australian wine exports increased by 8 per cent to 40 million litres valued at A$224 million. In volume terms, bottled exports have almost recovered to the levels recorded before the full effects of the austerity measures took hold.
The A$2.50-$5 segment was the key driver of the turnaround increasing 15 per cent to 20 million litres.
More than 90 per cent of Australia’s ultra-premium wine exports (above A$50 per litre) were exported to Asia and total exports to Asia (excluding China) increased by 7 per cent to 36 million litres valued at A$299 million.
Average value of exports to Hong Kong grew 43 per cent to A$14.57 per litre and exports in the ultra-premium segment grew 127 per cent to A$52 million.
Exports to Singapore rose 37 per cent to A$59 million and exports in the ultra-premium segment grew 123 per cent to A$12 million. Malaysia also performed strongly up 33 per cent to A$35 million with exports in the ultra-premium segment rising 60 per cent to A$10 million.
The Australian Made Campaign has welcomed the Government’s
moves to expand Australia’s access to the burgeoning Chinese market.
“A China-Australia Free Trade Agreement makes real sense
when you look at the scale of the Chinese market and its growth trajectory,”
said Ian Harrison, Chief Executive of the not-for-profit Australian Made
“While some industries will gain more and some will always
miss out in any of these types of deals, manufacturers of premium quality
Australian products, and of course our food producers, should enjoy significant
benefits, just as our resource industries have in recent years.”
The Australian Made Campaign is encouraging current and
prospective exporters to China to aggressively leverage country-of-origin
branding in their marketing and sales strategies.
“Australia has a great reputation as a supplier of high
quality, healthy, safe products and produce. This can often lead to a premium
price in the marketplace for genuine Aussie products, and that is why
country-of-origin branding is so important,” Mr Harrison said.
“The Australian Made, Australian Grown logo has been helping
sell Aussie products in export markets for nearly three decades, particularly
Furthermore, it is a registered certification trade mark in
China, and this gives vital protection, under Chinese law, for goods authorised
to carry the symbol.”
The Australian Made Campaign recently licensed ‘Australia
Made Shop Pty Ltd’ to use the green-and-gold kangaroo as branding for a chain
of stores across China that sell only genuine Aussie products, all of which
must be certified to carry the Australian Made, Australian Grown (AMAG) logo.
“This initiative will provide a significant
channel to the Chinese market for many Australian manufacturers and producers,
building on the benefits of the China-Australia Free Trade Agreement,” Mr
Australian craft brewers have made a request to the World Trade Organisation to take action against countries that provide subsidies to microbreweries.
Peak body representing Australian craft brewers, the Australian Real Craft Brewers Association say that Australian brewers are at a significant disadvantage when compared to brands that are imported. The association says that a number of Australian brewers have lost taps in hotels, and retail space in favour of subsidised craft beers such as California’s Sierra Nevada, ABC News reports.
David Hollyoak, chairman of the industry group, says that independent Australian brewers are finding it increasingly harder to compete.
"Australia is in a very unfair position because in 22 out of the 33 Organisation for Economic Cooperation and Development [OECD] countries are providing substantial reduced tax rates for their small brewers, and under the general agreement of trade and tariffs that is deemed a government subsidy," Hollyoak told ABC News.
The Australian Competition and Consumer Commission (ACCC) launched a separate investigation that seeks to determine whether major brewers are engaging in anti-competitive behaviour within the country’s pub industry including attempts to lock out competing brands. The watchdog is also questioning the validity of ‘craft beer’ claims made by the major brewers.
In January this year, consumer watchdog Choice together with the Australian Real Craft Beer Association said that major brewers are controlling hotel taps through their ability to offer attractive contracts inclusive of kickbacks such as rebates or installation and maintenance of lines and taps by the brewery, leaving smaller breweries unable to compete.
Hollyoak told ABC News that the association sees such practices as a restraint of trade, adding that it is illegal to have one tap contracted in the United States.
Chobani has launched a food incubator in New York in an effort to step away from overly processed foods and towards healthy, innovative products.
The Greek yoghurt company announced yesterday that it will open a new food incubator in New York where it will be accepting business plans and proposals from start-up companies. Companies selected by Chobani will receive investment capital as well as use of a commercial kitchen rent-free.
Hamdi Ulukaya, Chobani's founder and CEO said that the chosen products will be in line with Chobani’s ethos of making delicious, nutritious, natural and affordable food.
“Today we’re opening our doors to entrepreneurs who share our vision for better food for tomorrow—food that’s natural and affordable,” said Hamdi Ulukaya, Founder and CEO, Chobani.
“Making a product the right way is not always easy, but we’ve proven that the model works. I’m excited to work with entrepreneurs who share our goal and who can benefit from our experience.”
Food Magazine recently caught up with Chobani Australia’s CEO, Peter Meek to discuss the brand’s recent export endeavours, together with the success of the brand in Australia to date.
Fleurieu Milk and Yoghurt Company has decided to drop its Halal certification due to an aggressive anti-Halal social media campaign.
The South Australian company received a spate of calls, emails and social media posts from people suggesting that the fee that company paid to certify its products as halal were used to fund terrorism, ABC News reports.
Nick Hutchinson, sales and marketing manager of the company told ABC News that the decision to remove the certification meant that it would also have to end its $50,000 yoghurt supply deal with Middle-Eastern airline, Emirates.
"The publicity we were getting was quite negative and something we probably didn't need and we decided we would pull the pin and stop supplying Emirates Airlines," Hutchison told ABC News.
"Ninety per cent of it has been social media, but I have received calls from people that are quite unhappy, I guess, about our decisions and so forth, and [we have also received] a lot of emails."
The company which has been in operation since 2006, has been supplying Emirates for the past two years. A condition of securing the Emirates contract was that the Fleurieu Milk and Yoghurt Company paid a $1,000 fee to become Halal certified.
"We thought this was a great coup for the company, it would bring great publicity, great advertising and we decided to go ahead with it," said Hutchinson.
"It's been quite successful for the company, but unfortunately over the last few days, a lot of negative publicity has come in about this Halal certification and where this money, where we are paying fees is being spent."
Hutchinson said that a significant proportion of the complaints came from interstate and overseas, however the company made the executive decision to pull the certification to avoid negative publicity locally.
Hutchinson admits that the move will impact on the company financially, however he remained hopeful that Fleurieu could save its supply contract with Emirates as yoghurt does not have to be Halal certified by law unless it contains gelatine.
"What we are going to try and do is get our products tested, get some certificates that prove that our products don't contain gelatine and try to continue to supply Emirates, if they'll give us permission without the certification, but I mean that is unlikely,” he said.
Hutchinson said that since the company announced that it would be dropping its Halal certification, it had received feedback from customers expressing their disappointment that the company had bowed to the anti-Halal campaign.
In addition to the Fleurieu Milk and Yoghurt Company, another Australian manufacturer, The Byron Bay Cookie Company faced a spate of criticism via social media in October this year for having their Anzac biscuits certified as Halal.
Byron Bay Cookie Company is seeking legal advice and told SmartCompany it had been dealing with a “small but well-orchestrated anti-halal campaign” for the past six to eight months.
Provenance is increasingly important to consumers in Australia – more and more they are becoming interested in where the food they are buying has come from.
This reflects a growing awareness of health and safety issues surrounding what we eat and also the positive consequences of ‘buying local’; and driven by concerns about health and safety, the issue of provenance is even more pronounced amongst the bourgeoning Asian middle class.
This is all good news for Australia’s farmers, manufacturers and food processors because there is no question being Aussie is an advantage in the marketplace. Our clean, green image, coupled with the recognition of our high health and safety standards for growing and processing food, gives the ‘Australian brand’ a flying start in the marketplace.
Research shows that country of origin branding has a direct impact on purchasing behaviours – both here and overseas. While many Aussie businesses are competing against cheaper products, particularly in the Asian marketplaces, those selling genuine Aussie products have a card up their sleeve that can help them get ahead – and that is country of origin branding. There is very often a premium that consumers will pay for genuine Aussie products and getting this can be crucial for our exporters and import competitors alike.
Aggressive country of origin branding can also reinforce corporate philosophies – boosting staff morale and demonstrating corporate social responsibility. It can open up new business opportunities when tendering for government contracts and major projects.
The green-and-gold Australian Made, Australian Grown (AMAG) logo is the only registered, certification trade mark in Australia across all 34 classes of goods. It instantly establishes the connection of the product carrying it with Australia; and this happens both here and overseas.
According to Roy Morgan Research, over 98 percent of Australians recognise the logo, and 89 percent trust it to identify genuine locally made and grown goods. Research by YSC Online also found that products carrying the logo in export markets were more likely to have increased sales than those which did not.
Today more than 2,000 Australian businesses are registered to use the logo on over 15,000 products sold here and around the world. Indeed for many small businesses involved in export, the logo, with its proven, established links to Australia, becomes their strongest brand in the marketplace.
The same can also be said for state, territory and local government branding activities overseas, where the AMAG logo creates the overarching connection to Australia and therefore the framework for their ‘sub-brand’.
The Australian Made Campaign has welcomed the private industry initiative being championed by Andrew Forrest of Fortescue Metals Group – the Australian Sino Hundred Year Agricultural and Food Safety Partnership (ASA 100), to position Australia as a primary food and fibre supplier to China. The ASA 100 proposal, with its emphasis on a collaborative, cohesive approach to export marketing incorporating a single brand and a single logo, is a fantastic opportunity for consistency in labelling and a global approach for our food exporters.
The idea of the public and private sectors working together to build the global impact of ‘brand Australia’ is an exciting one. The power of consistent branding, both here and overseas, cannot be overstated. There is definitely a pivotal role for the Australian Made, Australian Grown logo in that strategy.
It is also important to be aware of the legal requirements. All country of origin claims must meet the following criteria:
• Australian Made: The product has been substantially transformed (made) in Australia and at least 50 percent of the production cost has been incurred in Australia.
• Australian Grown: All significant ingredients are grown in Australia and all significant (if any) processing has been carried out in Australia.
• Product of Australia: All significant ingredients come from Australia and all or almost all of the manufacturing/processing has been carried out in Australia.
• Australian Seafood: All significant ingredients are grown/harvested in Australia and all significant (if any) processing has been carried out in Australia.
It is also important to note that, for food products, the rules for using the AMAG logo with an ‘Australian Made’ claim are more stringent than those applying under the government’s Australian Consumer Law. A stricter set of criteria about what actually constitutes ‘substantial transformation’ was introduced several years ago to reduce any confusion about a food product’s true country of origin.
It is for this reason that consumers look for the AMAG logo when they shop so they can be sure that they are buying genuine Aussie products and produce.
A number of European countries are looking to restrict the use of cheese names such as parmesan and feta under geographic locations.
The move is being proposed under the Lisbon agreement which is a pact between 28 countries which aims to protect a general list of food names. Should the restrictions pass, it would see cheese products take a similar route as Champagne and Scotch Whisky, meaning that only products from specified geographic locations can be sold and marketed under particular names.
An Australian federal government delegation was present at a meeting of the World Intellectual Property Organisation in Geneva last week where the issue was discussed, The Weekly Times reports.
The Australian dairy industry says that such restrictions would have serious implications on the nation’s cheese exports and although Australia is not a signatory to the Lisbon agreement, officials are requesting for a right to vote on the proposal.
Together with Australia, Israel, Chile, New Zealand, Singapore, South Korea, Panama, US, Canada, Japan and Uruguay have all expressed concern at the proposed changes, and backed Australia’s voting request.
If you’re considering growing your business internationally, there’s never a “safe bet” when it comes to timing, but ensuring you’ve ticked the right boxes definitely helps.
When getting ‘export-ready’, research is the first step and is also an ongoing process.
It’s how you find out if the country you’d like to receive your goods will trade with you at all, and who you need to get approval from to get the ball rolling.
It’s how you know what certifications you need to get to be successful in the receiving country, and gauge a market interest or gap for your product.
And it’s how you balance the risk and make sure that the investment you’ll make to see your product go international is worthwhile.
“Do your research. There’s a wealth of information available online and once you contact the various industry bodies, there seems to be no end to the amount of resource material that’s available to you,” says Sean Garlick, managing director of Garlo’s Pies.
“I remember printing out pages and pages of requirements and reading them and trying to ingest them all. It wasn’t until we engaged a consultant that it put it all in perspective and you sort of get an idea of what it’s going to cost, as well.”
DIY, or call in an expert?
Once you’ve done some research, the next step to getting export-ready is deciding whether or not to bring on a consultant.
“Right at the start we acknowledged that there’s a whole lot we don’t know anything about and so we engaged a consultant…though it comes at a cost,” Garlick says.
“You either learn it for yourself or you pay for someone to come in and teach you. It all depends on how much time you’ve got and how quickly you want to get it done.
“It’s probably the first step [getting a consultant] because you need to get your premises right and you need to find out if you premises is ever going to be right and what the cost is to get it right and then your processes, whether you have the budget to be able to employ the people that you need to, in order to be on top of it every step of the way.
“It’s not just to ensure that you do it right, but you’ve got to demonstrate that you’ve done it right, you’ve got to be able to show through your record that every single aspect of your production, of your receival, your production, your dispatch has all been at the right temperatures, according to the right plan that’s been written and it’s all auditable.”
Resources – have you got what it takes?
Before a business can even consider export, they have to ensure they have the resources to meet demand. Your facility needs to have the capacity, meet the requirements of export and the requirements of the receiving country.
“It came at a time where we were contemplating building new premises anyway; we were bursting at the seams at our old place and we figured the new place was going to be built from scratch so we might as well make it compliant with the regulations of having a meat export licence,” says Garlick.
“There are some facilities that just don’t comply. For example, the whole drainage system of your premises has to be separated from your raw goods to your finished goods, so if you were to get a break out of listeria or something like that, it can’t be transmitted from raw ingredients to finished goods. It’s about the complete isolation of your staff from the various sections of your facility. It’s about constant monitoring and recording of all your temperatures and your cook-chill processes. It’s basically drilling down every conceivable opportunity for contamination, which far exceeds HACCP.”
Many manufacturers are prompted into export by inquiries, but ensuring inquiries turn into business deals is all about getting involved. You’ve got to get people talking and get talking to the right people.
Garlo’s Pies started the conversation by attending an international trade show and giving out pies for five days straight.
Chobani Australia managing director, Peter Meek, says the best advice for manufacturers looking to export is to “get started.”
“You can over research it and worry about if you’ve got it right, but you’ve really got to get into the market and talk to the distributors and they’ll help you craft what you need to do to enter those markets.”
Above: Chobani's Australian facility
Coconut yoghurt and ice cream manufacturer CO YO currently exports to New Zealand and recently won the Richard Joel Award for Emerging Exporter of the Year at the Premier of Queensland’s Export Awards.
CO YO co-founder and director, Henry Gosling, does a lot of the ground work himself.
“You’re the one with the passion and you know how to sell it, you know how to promote it and you know how to talk to people about it,” Gosling says.
“If you’re a small little business like ours, you need to get really personal, and the only way to do that is to go and do the work yourself.”
Matching product to market
So you’ve got your facility, and all the necessary paperwork – but is your product right for the market?
Mitchell Taylor, managing director of Taylor’s Wines says a manufacturer looking to export has to make sure they’ve “got a high quality product that deserves to be exported.”
“You don’t want to be going over there with a product that doesn’t stand out, you need to have something that is unique, and something that reflects the regionality and tells a good story…It’s not a quick sell. You don’t enter the market and walk away, you’ve got to invest a lot of time in continually going back there and revisiting the market and making sure that you start to build some of those relationships.”
Above: Mitchell Taylor
Although there may be international interest in your product, some small tweaks may help its success, or perhaps even be essential before exporting can commence.
For Garlo’s Pies, it was knowing that it’s illegal to import poppy seeds into the UAE.
“We used to decorate the top of our pies with poppy seeds for certain flavours. It’s about knowing those sort of individual country requirements that can be a deal breaker,” Garlick says.
Chobani Australia recently entered into the Singaporean and Malaysian markets.
Peter Meek says Chobani’s initial strategy in these new markets is to use existing flavours.
“It’s fascinating if you go into Malaysia and Singapore, the top flavour in both of those markets is still Strawberry. So while the palettes are very different within this category, certainly a lot of the flavoured products that we’ve already got are absolutely relevant to them so we don’t want to introduce any complexity in the first stages, but in the longer term and as the markets reach a critical mass of course, we will look to localise flavours and bring local propositions to them.”
Doing it differently
Going internationally does not always mean you have to export.
CO YO sells the licence to manufacturer to overseas interested parties and then helps them set up production units.
Gosling says CO YO has a simple formula after getting an international inquiry to distribute.
After initial contact, Gosling passes the inquiry onto a consultant, who communicates with the interested party, answers any of their questions and sends them a contract. From there, the CO YO co-founders (Henry and Sandra Gosling), the consultant and the interested party will have a Skype session, after which, the Goslings may fly overseas and have a face-to-face meeting. If CO YO decides the interested party is suitable, they will charge them a licence. In the case of the US, CO YO sent a duplicate of its Yandina manufacturing plant to the manufacturers in New Mexico. They also sent their yogurt maker for the installation of the plant, and to give assistance and advice on how to set up and begin manufacturing. From then on, CO YO is in communication with the new manufacturers on a regular basis.
Above: CO YO's mixed berry coconut milk yoghurt alternative.
CO YO began exporting to New Zealand as a way to “test the waters”.
“The New Zealand market was a toe in the water, that’s why we set up our own company and thought ‘well let’s give it a go and see whether there is a market for this product,’ because we want people [who buy a licence] to succeed, we weren’t too sure whether there was in fact a market for our product,” Gosling says.
“At some stage, that operation in New Zealand will be sold off as a licence, but at the moment, it’s been going now for 12 months, we had a record shipment, just last week and it’s going extremely well.”
Export consumes time, money and requires a strong managerial commitment, but if executed correctly, it can be a great opportunity to grow your business to new heights.
So do the research, crunch the numbers and make the right decision for your business.
CO YO has taken out the Richard Joel Award for Emerging Exporter of the Year at the Premier of Queensland’s Export Awards.
The Sunshine Coast-based company was also named a Finalist in the Small Business category.
Frosty Boy Australia was a finalist for the Manufacturing Award and a finalist for Regional Exporter Award.
Cardinal Seafoods was named a finalist for the Online Sales Award and Capilano Honey Limited a finalist for the Agribusiness Award.
Launched in 2010, CO YO’s domestic success has attracted international investors and it is now produced and distributed under license in the United Kingdom and United States, and is exported to New Zealand.
CO YO founders and directors Henry and Sandra Gosling said the rapid global expansion of their brand had taken them somewhat by surprise.
“To see the business we started in our kitchen grow to be recognised as one of the State’s leading exporters is quite overwhelming, but extremely satisfying” Sandra Gosling said.
“We knew there was a market for delicious and healthy non-dairy alternatives to yoghurt and ice-cream, but the demand is even greater than we expected.
“We now have passionate CO YO consumers all around the world who are very vocal in their support of our products, particularly on social media, and that has really seen the international market come to us.”
Judging panel chairwoman Wendy McMillan said CO YO was a worthy winner.
“Their product is niche and reflects features that are valued in a range of applications and global markets,” she said.
“Their marketing strategy is comprehensive and well integrated, with flexible in-market strategies for distribution and or manufacturing.”
Sunshine Coast Mayor Mark Jamieson congratulated Henry and Sandra Gosling on their hard work and innovative ideas.
"CO YO is the epitome of bold thinking and real action, the foundations of success in any business," Mayor Jamieson said.
"These awards recognise the best of the best in the export industry and CO YO has shown it is up there with them and helping put Sunshine Coast on the world map,” he said.
CO YO's latest win comes on the back of the company taking out the Ingredient Innovation category at the Food Magazine Awards for the third year running in August.
Australia is in a prime position to take advantage of the growing global demand for seafood, a new industry report has found.
Seafood is the most consumed animal protein in the world, and with an estimated 30 to 40 million tonnes of additional seafood required globally to meet consumer demand by 2030, Australia is in a ‘box seat’ to take capitalise on this opportunity, it says.
Titled Smooth Sailing for Australian Seafood, the report, by agribusiness banking specialist Rabobank, says that while Australian seafood accounts for only a small proportion of world seafood production and trade, it plays an important role globally, given the range of premium aquaculture and wild caught products produced here.
Australian animal proteins analyst Matt Costello said Australia’s reputation for producing high quality, sustainable seafood puts us in an enviable position.
“With one of the strongest reputations globally for producing high value, world class, sustainable and environmentally friendly seafood products, the Australian seafood industry is very well positioned to supply seafood hungry consumers internationally and domestically,” he said.
Growth in Asia
Asia in particular presents a strong opportunity for Australia’s industry, Costello said.
In 2014, Chinese per capita annual consumption of seafood is forecast to reach 37.7 kilograms per head, a rise of 57 percent since 2000. The global average is expected to reach just under 20 kilograms per head this year.
“Currently, most of the Chinese seafood consumption is still based on low-value domestically-raised product. But more significant is the expected growth in demand from Chinese consumers for higher-end seafood products, many of which will need to be imported. This is a key opportunity for export-oriented aquaculture and fisheries, such as in Australia, which can supply premium items,” Costello said.
Globally, the major consumers of seafood include Korea, Norway and Japan with per capita per annum consumption in 2014 expected to reach 57.7 kilograms, 57.65 kilograms and 52.6 kilograms respectively.
Aquaculture versus wild-catch
The rise of aquaculture is also playing a significant role in driving global growth in seafood consumption, the report says, thanks to its ability to sustainably and efficiently convert feed to protein while also keeping prices affordable.
“The ability to produce more with less is going to be the challenge to the future of food production and the aquaculture sector is the most efficient converter of feed in comparison to all animal proteins,” he said.
Farmed salmon, for example, requires approximately 1.2 kilograms of feed to produce one kilogram of protein, while an estimated eight kilograms of feed are required to produce one kilogram of beef.
“With wild-catch seafood production growth remaining close to stagnant over the past 15 years, global seafood production is growing through increased aquaculture,” Costello said.
“Between 1990 and 2012, wild-catch seafood production increased just eight percent. And with rising environmental and sustainability pressures coming from all participants along the supply chain – including consumers, companies and governments – it is likely there will be no growth in wild-catch production in the future. Assuming that wild-catch remains at current levels, it is estimated that the extra 30 to 40 million tonnes of additional seafood will be required from aquaculture to meet global demand by 2030.”
Globally, aquaculture now accounts for more than 50 percent of seafood produced for human consumption, surpassing wild-catch in 2012, the report says. However here in Australia, seafood production is still dominated by wild-catch, accounting for 87 percent of production in 2012, with aquaculture making up a relatively small, yet increasing, share of production.
Ten years on from the Australia-US Free Trade Agreement, Australia is entering another round of negotiations towards the new and controversial Trans-Pacific Partnership. In this Free Trade Scorecard series, we review Australian trade policy over the years and look at where we stand today on the brink of a number of significant new trade deals.
A combination of dumb luck, geographical isolation and a zealous stance on quarantine has kept Australia relatively free of the many pests and diseases that can be spread by international agricultural trade. As a result, it has been spared many of the health threats and extra farming costs – not to mention irreversible damage to native wildlife – that come with the arrival of these pests, or with changes to food safety.
Strict food safety standards are often seen as market protectionism or barriers to trade, rather than what they also are: important protection measures for the consumers who will eat the food. Yet within the current round of trade negotiations it is likely that the United States will continue to put pressure on Australia to water down its regulations.
While Australia’s current regulations are not perfect, it is important that any discussions about reforming them are conducted with an eye first and foremost on the health and safety of Australians, and are not unduly influenced by trade concerns.
Australia’s clean reputation
More than 70% of Australian agricultural income is from exports. Consequently, our exports must meet importing countries’ expectation of being “free” of pests and residues – meaning that no living pests (plant, animal, or disease-causing microbes) are found in the product, and that any chemical residues are within agreed international limits.
Australia has an excellent international reputation for clean and green production. Because we are free of many trade-hampering pests, and because we specialise in low-input, low-output production systems, this freedom has allowed Australia’s process for regulating chemical use in agriculture, veterinary products and humans, to differ from many other countries.
In many cases, this has raised the costs an individual farmer faces when using chemicals, and given them fewer choices for how to manage crops and livestock. But for some industries this combination of costs and choices has slowed the rate at which pests develop resistance to chemicals, and as a result total production costs are lower than their international competitors. It has also helped those same farmers meet international safety standards and maintained the pristine reputation of their products.
As shown below, Australia and the United States use antibiotics at about the same rate, yet the resistance level is more than 30% higher in the latter.
Australia’s relative pest- and disease-free status gives its exporters a significant market advantage, and allows them to demand a price premium amid increasing public awareness about food safety. For example, in 2004 and 2005 Australia dominated the lucrative Japanese market for beef and veal when Japan halted US imports in response to the BSE outbreak.
As food can be contaminated anywhere from paddock to plate, each stage of the process needs to be monitored. Although consumers' preference for safe food may not always translate to higher prices, their refusal to buy food identified as potentially unsafe can be immediate and catastrophic for any exporting country that is identified (even incorrectly) as a source.
Watering down regulations?
Australia has a clear interest in maintaining the integrity of its regulations for plant and animal health and food safety. But its more stringent regulations have long been in the sights of our trading partners, who would prefer that our high standards be “harmonised” with their less stringent ones, to “facilitate trade”.
With Australia now embarking on increased economic integration with the US thorough the Trans-Pacific Partnership negotiations, the question of Australia’s stringent food safety standards will no doubt be a key topic of discussion.
The United States has often argued that, in the absence of international standards of chemical use, American standards should be used. In 2007, this approach led Canada to lower its standards to match US settings.
Bringing chemical and food standards into line with the United States is clearly in America’s interest. But there is little evidence that harmonising Australia’s more stringent standards with America’s less stringent ones would benefit Australia, either economically or socially.
It is true that higher regulatory standards can often cost more. But the economic and social consequences of leaving Australians open to new and unknown food safety risks are likely to be much worse.
This article draws on research prepared for the 2014 Workshop “Ten Years since the Australia-US Free Trade Agreement: Where to for Australia’s Trade Policy?”, sponsored by the Academy of the Social Sciences in Australia and Faculty of Arts and Social Sciences, UNSW Australia.
In the past David Adamson has received funding from the CRC's for Tropical Pest Management (1994-1999) and the Emerging Infectious Diseases CRC (2009). He is currently part of a COST-ACTION proposal looking at the evaluation metrics of one-health issues.
According to the latest report from the Australian Grape and Wine Authority (AGWA) Australia has experienced a small rise in wine exports together with growth in the average value of bottled wine.
The report titled, Wine Export Approval Report September 2014 found that total Australian wine exports increased by 0.7 percent to 688 million litres, representing a total value of A$1.78 billion.
The average value of bottled wine exports grew by six percent to A$4.83 per litre, representing six years of consistent growth. According to AGWA’s Acting Chief Executive Andreas Clark, this reflects a slow, but increasing demand for wines in the premium category.
In contrast to the premium category, bulk wine exports fell in value by one percent to A$1.00 per litre. Bottled wine exports declined by seven per cent to 283 million litres which was offset by an increase in bulk wine exports by seven per cent to 399 million litres.
“Growing interest by consumers in premium wines was a contributing factor in wine exports in the A$7.50-$9.99 price segment increasing by eight percent to 15 million litres, and by six per cent in the A$10.00 and above segment to 16.7 million litres,” said Clark.
“Total Australian wine exports increasing in volume were helped in part by the stronger performance of the white wine category which offset declines in red wine."
Clark says that white wine exports increased by five percent to 290 litres with exports of Pinot Gris increasing by 32 percent to 38 million litres. Chardonnay however remained flat at 166 million litres.
In the red wine category, overall exports fell by three per cent to 383 million litres with Shiraz, Cabernet Sauvignon and Merlot all recording falls.
The report states that the UK remains Australia’s biggest export market by volume which is dominated by bulk wine exports that are destined for Europe. The total volume increased by one percent to 245 million litres. Just 15 percent of wine exported to the UK is bottled – a fall from 19 percent of the previous year.
In the US, total exports declined by eight percent to 164 million litres, however bulk wine exports and bottled wine exports both increased in value up four percent to A$0.96 per litre and up six percent to A$3.49 per litre respectively. The A$7.50 – $9.99 price segment performed the strongest with an increase by 19 percent to 2.8 million litres, followed by the A$10.00 and above segment which recorded growth of 14 percent to 1.7 million litres. Exports under A$2.49 per litre dropped substantially, down 85 per cent to 2.4 million litres.
Canadian exports figures have experienced growth of 20 per cent to 60 million litres as a result of a significant increase in bulk wine exports, and Chinese export figures continued to decline albeit at a slower rate with total wine exports down five per cent to 37 million litres.
The reports states that Chinese austerity measures continue to impact the premium wine segment with the average value of bottled wine exports to China down 8 per cent to A$6.13 per litre.
Other Asian markets had strong results including Singapore, Malaysia, Taiwan and in particular Hong Kong which returned a record A$94 million in Australian wine exports.
The halal food market is expected to be worth US$1.6 trillion globally by 2018. With an average growth rate of 6.9 percent a year, it’s a sector that cannot be ignored, especially by food manufacturers keen to make their mark internationally.
While many manufacturers may question the value of gaining certification in Australia, where the Muslim community represents a relatively small proportion of the nation’s population, those companies looking to broaden their horizon beyond Australia’s shores would be well versed in the importance of meeting halal’s criteria.
What is halal?
Derived from the Koran, Islam’s book of faith, the word ‘halal’ literally means ‘lawful’ or ‘acceptable’.
Dr Muhammad Khan, chief executive officer at Halal Australia, a certification and accredidation company, told Food mag the best way to understand what halal is, is to understand what halal is not.
“As a general rule of thumb, everything is halal except what has been described as not halal.
“’Haram’ means ‘prohibited’ or ‘unlawful’, so products like swine or pork and its bi-products, and animals which are not properly slaughtered or they die before slaughtering, are not accepted as halal. So the blood is prohibited. Obviously alcoholic drinks and intoxicants are also not halal; carnivorous animals such as lions, tigers and monkeys are not halal, and certain other animals like scorpions, snakes and things like that – they are not halal.
“However, when it comes to processed foods, if it is contaminated with any of the products that I’ve mentioned, or their derivatives, including emulsifiers like 471 or 472, and also gelatine, they are not halal,” Khan says.
Certification is about ensuring these ingredients aren’t included in the manufacture of food products, and haven’t contaminated the manufacturing process in some way, for example, by being used on the same production line as non-halal products or ingredients.
With halal certification being more about what isn’t included in the product than what is, a product could be deemed halal without the manufacturer even realising or intending it to be. However, if that product is – or one day could be – destined for an export market, certification is worth considering, if not essential.
Why gain certification?
Similar to organic and kosher certification, halal certification guarantees Muslim consumers that the product has been grown/reared, processed and manufactured in a certain way.
Dalene Wray, general manager at OBE Organic, a certified organic and halal producer and exporter of beef, says certification allows companies to access new markets around the world.
“From a manufacturing point of view, it gives the manufacturer or the producer of the product more opportunities for sales of their product globally, if it’s halal certified.
“There are markets around the world that you can’t export to unless you have halal certification. So those would include the Middle East, Indonesia, Malaysia and to some extent Singapore. However, what we’ve found is that our halal certification is advantageous to all markets we export to around the world, even though to clear customs you don’t need it.
“For example the US. We don’t need halal certification to clear the US government customs, however we’ve found that the end users of our product in retail in America are Muslim consumers and they want our product to be halal certified,” Wray says.
She adds that certification allows OBE Organic to capitalise on the Australian government’s efforts to build relationships with certain export markets.
“We can take advantage of a lot of the activities that the federal and state government is doing to build relationships in those markets … and also we’ve got the Queensland government doing trade visits to the Middle East, so [we’re] really capitalising on a huge growth trend in opportunities in the Middle East markets.”
According to a report commissioned by the Dubai Chamber of Commerce, the global halal market is expected to be worth US$1.6 trillion by 2018, up from US$1.1 trillion in 2013. Halal food made up 16.6 percent of the total world food market in 2013, and by 2018 this is expected to rise to 17.4 percent.
The Muslim population represents roughly 23 percent of the global community – or 1.8 billion people – and is growing at a rate of about three percent per annum, says Halal Australia’s Mohammed Khan.
But certification isn’t all about servicing Muslim consumers or benefiting export markets; Australians – regardless of their faith or background – can benefit from the growing halal market too, he says.
“A lot of companies are happy to seek certification because they see it as adding value to the company, something that bring a lot of money and that also can increase the employability of Australians. Companies can sell a lot more products than they would normally sell [if they’re halal] and that obviously increases the demand for employment.
“It’s a win/win situation for everybody. Even if one person is employed by a company, and that person is a bread winner and either he or she can support their family in the halal way – halal means in a lawful way – it’s good.”
Spreading the word
Gaining certification is only one half of the equation, says Lisa Mabe, founder of Hewar Social Communications, a PR consultancy specialising in the global specialty food market.
“If you make the effort and spend time and money to earn certification, why would you not target the very people who are looking for that certification?” she says.
Mabe told Food mag that manufacturers exporting to regions with Muslim populations tend to focus on their relationships with retailers rather than the end users. They’re relying on distributors in foreign markets to market the product’s certification on the manufacturer’s behalf, but the message often doesn’t get through, she says.
“In terms of reaching consumers, I don’t see many products doing much at all … I really think there’s a lack of understanding of the potential of those markets,” she says.
“A lot of business that we do is private label, which means that the retailer puts their own label on the product, and they may or may not choose to identify the product as halal certified. Our job then is a little more difficult, and we have to articulate that message through our marketing, which is mostly done through social media,” Wray says.
“So we have a dedicated Facebook page just for marketing to Muslim consumers. We don’t know of any other food or beef company in Australia that has two Facebook pages: one for marketing to the world and one specifically for communicating with and sharing content that’s relevant to Muslim consumers.”
Content includes recipes, conversations about the Islamic holy month, Ramadan, and discussions regarding festivals celebrated in Middle Eastern communities.
Wray agrees with Mabe that Australian manufactures which have gained certification aren’t promoting it as effectively as they could, or should.
“OBE is one of the few companies in Australia that is leveraging and marketing the fact that our product is halal. We make a big deal of it; it’s all over our homepage,” she says. “There are not many other companies around the world that can produce certified organic beef that’s also halal certified.
“I don’t know if I could even count the number [of brands] on one hand that actively promote the fact that their product is halal,” she says.
Mabe came to Australia from the US about 18 months ago, and was surprised by the number of brands that had certification, however very few of them were communicating it to consumers.
“It’s a missed opportunity,” she says, especially considering Australia already has a reputation overseas for being a clean, safe food manufacturer.
Put the trust that this ‘clean and green’ reputation creates together with the reassurance that certification provides to a growing, potentially lucrative demographic, and Australian manufacturers are in an enviable position.
“[Muslim consumers] trust that if it’s from Australia, it’s safe. With its reputation of producing clean and safe food, Australia is in a unique position to not only participate in, but also lead in the halal food market,” Mabe says.
Food Innovation Australia Limited (FIAL) has released an interactive eCatalogue of Australian food and beverage suppliers and overseas buyers.
The tool is aimed at giving Australian food and beverage producers greater access to overseas buyers and more opportunity to expand their supply chains beyond Australian shores.
It was developed in response to frustration from both Australian producers and international buyers with the industry’s past methods of fostering valuable international relationships.
With more than 350 Australian suppliers already on board, including major brands such as Arnott’s, Bundaberg Brewed Drinks and Weis, FIAL is calling on Australian food and beverage producers interested in export opportunities to register.
The eCatalogue will give suppliers access to valuable information on why their business may or may not appeal to overseas buyers through its unique rating system, which allows buyers to rate suppliers on their unique selling proposition, product range and company website.
FIAL general manager market development, Najib Lawand says the benefits of buyer feedback to Australian businesses are invaluable and could help remove the barriers many Australian suppliers face when initiating their export business.
“Buyer feedback helps our producers improve their ability to sell products in international markets, and understand exactly what buyers, particularly in key Australian export markets throughout Asia and the Middle East, are looking for,” Lawand said.
“Often our suppliers don’t understand why overseas buyers aren’t interested in working with them, and it could often be something as simple as improving their website that helps change that.
“Through the eCatalogue, FIAL wants to provide the mechanism that will help Australia’s suppliers grow their markets internationally, and also help Australia appear more attractive to overseas buyers.
“Increasing interest in our food and beverage industry from high-end Asian and Middle Eastern supermarket buyers means now is the time to make the connecting process between them and our suppliers as seamless as possible.”
The eCatalogue currently covers 24 industry categories ranging from dairy, meat and livestock, to fruit and vegetables, chocolate and confectionary, nuts and seeds, even cat and dog food.
With support from Austrade and various state government agencies, Lawand says FIAL plans to expand the eCatalogue’s features to include online training resources and tutorials that will help suppliers identify and sell their unique offer, prepare winning presentations for export buyers, demystify free trade agreements and create websites that will generate buyer interest. The eCatalogue will also be optimised for mobile devices for easy access while travelling, include translation services for Chinese, Japanese and Korean buyers, and offer detailed reporting on buyer behaviour.
“We hope to give our suppliers as much information as possible to assist them in growing their business while making Australia as attractive as possible for overseas buyers in the food and beverage industry. The eCatalogue is an important step forward for the industry,” he said.
For more information or to register with FIAL’s eCatalogue, click here.
When it comes to exports in the Australian food and beverage manufacturing sector, dairy is one category that is showing no signs of slowing down.
A recent report from IBISWorld found that demand for milk and dairy is expected to post strong revenue growth over the next five years, reaching up to $4.2 billion by 2019-20 – a trend that yoghurt manufacturer Chobani is well placed to capitalise on.
Food magazine recently caught up with managing director of Chobani Australia, Peter Meek to discuss the brand’s recent export endeavours, together with the success of the brand in Australia to date.
Originating from the US, Chobani first launched its Australian arm two years ago and since then, Meek says that the business has essentially doubled, leading to an inundation of keen distributors wanting to take on the Chobani brand.
“We were very focused on entering Singapore,” Meek told Food Magazine. “Our view is that it’s the gateway to Asia so we made a very conscious decision to go into that market. We knew that there would be lots of other potential distributors within the broader region that would see Chobani and how well it’s selling… so Singapore was a very conscious decision. And of course the reality is that Malaysia is next door and relatively easy to manage at the same time.”
As far as catering to local tastes in the South East Asian region, Meek says that the brand hasn’t really needed to adapt any of its product offerings as yet, however once the market has matured, the development of more localised flavours may be on the cards.
“The initial point is to use our existing flavours. It’s fascinating if you go into Malaysia and Singapore as the top flavour in both of those markets is still Strawberry. So while the palettes are very different, there are certainly a lot of flavoured products that we’ve already got that are absolutely relevant to them. So we don’t really want to introduce any complexity in the first stages, but in the longer term and as the markets reach a critical mass, of course we will look to localise flavours and bring local propositions to those markets.”
In terms of the brand’s success, Meek credits it towards a number of factors; namely an excellent product. Chobani employs the traditional Greek method of making yoghurt which involves a straining process to remove up to two thirds of the liquid – an additional step that many yoghurt processors avoid due to the associated costs.
“In Australia we are literally the only large scale manufacturer that strains its yoghurt because it’s an expensive process," he says.
"We use over three litres of milk to make every kilo of yoghurt, whereas normal yoghurt uses about one, or one and a half litres of milk… Traditionally, (the Greek style) is how yoghurt has been made for hundreds of years and that’s another interesting point. It’s not as if it’s a new innovation. All we are doing is bringing back the process of how yoghurt was made, and how it should be made,”
“Word of mouth and referral is also such a big part of how we’re building the Chobani brand. Marketing today is really very different to perhaps five years ago… At the end of the day, if you’ve got a great product, people start talking about it, then all of a sudden you’ve got a market success and I think those are the new rules of marketing.”
In addition, Meek credits excellent suppliers to the company’s success. When asked about potential supply issues that could arise in the future due to the brand's continuing growth, Meek is optimistic.
“The South-East Asian market gives us quite a bit of scope. We’re still just one factory so we suspect that if we’re successful with these markets quite quickly, capacity is going to become a bit of an issue," he says.
"But obviously, if we find that we’re running out of capacity we will categorise that as a five star problem. Our business has been built so quickly because we’ve always invested ahead of the curb for capacity. So I’m sure if we got to the point where we’re saying ‘ok we can’t keep up with all of these new markets’, than we would just invest.”
For a well-established company such as Chobani, the idea of exporting product into new countries may seem like somewhat of a natural progression, but Meek says that smaller Australian manufacturers that are looking to export should simply get the ball rolling – providing that they have a good product.
“You can over research it and worry about if you’ve got it right, but you’ve really got to get into the market and talk to the distributors and they’ll help you craft what you need to do to enter those markets,” he says.
“You’ve also got to have a great product. If your product doesn’t deliver locally, don’t think that Asia is a target for a sub-standard product because it’s quite the opposite. You’ve got to have a great product to start with, and the third point is that you’ve got to be passionate about what it is that you’re doing. You need to find partners that are excited to work with you because then they are going to go the extra mile and make sure that they build that distribution, and represent your brand in a way that creates market success in the new market.”
Marc Soccio, senior analyst at Rabobank told ABC News that the impressive 2013 harvest has demonstrated that there is still capacity for the industry to produce large volumes of wine.
"There was a seasonal lull in production for around three years, but last year we saw that even though there has been some restructuring to try and realign supply and demand, the potential for the world to produce a hell of a lot of wine is still there," he said.
Although production in Australia has dropped by around 7 percent from 2013, Soccio says that there is still a great deal of wine available in the global market, meaning that export prices will remain depressed for some time yet.
"It's not a sharp enough drop to see immediate run up in demand for Australian stocks," he said
In October 2013, the Winemakers Federation of Australia said that Hunter Valley wine producers in particular were suffering a significant financial hit due to the oversupply of Australian wine.
"Well for Hunter wine growers, they've got to compete with wines from all across Australia," said chief executive of the Peak Body, Paul Evans at the time.
"If there is an over-supply of course that competition increases.
"That competition is extremely fierce at the moment and that reduces margins and profitability for everybody."