Expanding Australian beef’s market opportunities
09 August 2019
Extracting the most value from a limited supply is the ultimate opportunity facing Australian beef.
Australian beef accounts for under 5% of global beef production and 17% of global beef exports. Because we’re a small supplier by global standards, it’s critical that marketers of Australian beef find ‘the right consumer’ and understand the wants, needs and desires of that consumer. So how do we pursue ‘the right consumer’ of Australian beef?
MLA Managing Director Jason Strong presented on this topic at last week’s PGA Convention in Perth, WA. Here, he shares in this Q&A what he spoke about.
How have the markets for Australian beef changed over time?
There’s a wide variety of markets out there for Australian beef and cattle.
With Australia producing just 3% of the world’s beef, it’s more important than ever to understand each of the global markets and identify our target consumers.
For example, destinations for our boxed beef have diversified over the years. In 2004–05, the top two export markets accounted for 82% of global exports. In 2018–19, the top two only accounted for 47%.
The destinations for Australian live cattle have also increased in diversity. Vietnam in particular has become an increasingly important market over the past five years.
What are the opportunities for Australian beef in these more diverse markets?
To expand Australian beef’s opportunities in these markets, we have to narrow our focus.
At first glance, a country’s population may appear to be a good indicator of who we should be selling our beef to. Figure 1 reveals China to be the top ranked market, by population.
Figure 1: Global markets – population
However, if we’re going to extract the most amount of value from our limited supply of beef and cattle, we need to pursue a more ‘premium’ consumer.
A consumer’s ‘ability to purchase’ is a better indicator of who we should be selling our beef to.
Figure 2 reveals the number of households forecast to earn above $35,000 in key markets by 2023. It reveals a different ranking to that in Figure 1, where the EU, US and Japan are the highest ranking markets.
Figure 2: Global markets – ability to pay
In some of our key markets, we’re seeing this indicator increase rapidly. China is a prime example, with the nation’s number of households earning a disposable income above US$35,000 set to increase from 12 million to 33.3 million over the next five years. In the Middle East, numbers are also expected to rise – from 3.6 million to 6.6 million.
We need to understand more about this consumer and adapt to deliver what they want.
What part can producers play in meeting the needs of this consumer?
MLA’s market insight research reveals that consumers rate ‘taste’ and ‘high nutritional value’ as what differentiates premium beef from commodity beef.
But there are three ‘premium’ attributes that producers have control over: consistent quality, food safety and well cared for animals.
These are all must-dos for Australian beef producers if we want to target wealthier consumers.
A consistent, clean, green, quality product is a drawcard for quality customers.
It’s important we’re getting the right messages to the right people, which is why MLA’s marketing programs are focused on promoting the provenance, consistency and great taste of Australian beef.
What else is MLA doing to help producers capture more opportunities?
Australia produces superior beef, but there’s more that can be done to ensure we remain competitive on the world stage.
To meet the changing needs of our premium consumers, we need to understand where gains can be made on our properties and adapt practices to make those gains.
Accessibility to research and development is one of the areas MLA is working hard to improve so that producers can find R&D relevant to them, understand it and apply it on-farm.
MLA is currently reviewing ways to enhance the ability to search for R&D projects on the MLA website, access plain English summaries and improve the outreach of R&D learnings.
At MLA we’re keen to hear your feedback on how we can improve your access to R&D. Producers and other industry stakeholders can share their views either by emailing me (details below) or contacting MLA at email@example.com