L.ALS.2501 - A feasibility study into opportunities to capture additional value from Australian Lamb and Sheepmeat

Summary

This report project explored opportunities for Meat & Livestock Australia (MLA) to enhance the value of Australian sheepmeat across ten countries. Despite the Australian sheep flock reaching its highest levels since 2007, the industry faces significant price volatility, highlighting opportunities to rebalance the lamb and sheepmeat portfolio by introducing new non-lamb sheepmeat products. It is estimated this could strengthen industry resilience and have a potential value of $180m–$300m, contingent on addressing challenges within seasonal supply, consumer awareness and alignment of producer incentives. 

The analysis involved quantitative modelling of market sizing and market attractiveness and 20 qualitative consultations to identify and prioritise potential opportunities. Foodservice channels, particularly in the United States and the United Kingdom, are recommended as ideal environments for initial product testing due to their availability of innovative dining experiences, supportive industry infrastructure and consumers with demand for, and willingness to experiment with, new non-lamb sheepmeat products. 

Key initiatives are recommended to enable these opportunities, including sustained promotional efforts for Australian sheepmeat, and the commercialisation of a standardised eating quality-based grading system. Next steps are suggested for MLA and the Australian sheepmeat industry to commercialise this grading system, collaborate on new products, ensure consistent supply, and explore pilot opportunities.

Objectives

The objective of this project is to provide MLA with an assessment of opportunities to extract additional value from Australian non-lamb sheepmeat across 10 countries (being Australia, United States, United Kingdom, Japan, South Korea, United Arab Emirates, China, Saudi Arabia, Indonesia and Singapore), considering opportunities in three product categories, being further processed sheepmeat, cured sheepmeat and smallgoods, and premium MSA graded muscle cuts. These opportunities have been explored and assessed for both foodservice and retail channels.

Key findings

Within the existing supply constraints, the potential value of new Australian non-lamb sheepmeat products is estimated to be $180m–$300m. To achieve this value, the industry needs to address challenges that include the seasonal nature of supply, as well as broader sector and consumer awareness. 

Foodservices channels in the United States and United Kingdom have been identified as the preferred markets and channels for initial pilots, due to the availability of innovative restaurants and other industry players with the resources and capabilities to support the development and introduction of a new product.  

The pursuit of new opportunities needs to be underpinned by continuous promotional efforts for Australian sheepmeat, and the introduction of an industry-wide eating quality-based grading system.

Benefits to industry

The project outlines key considerations and initiatives that can benefit stakeholders along the sheepmeat value chain (e.g. growers, processors, importers, distributors, foodservices owners and retailers). By working together with producers, processors and stakeholders in key export markets, MLA can support the growth of demand for Australian sheepmeat, diversify the sheepmeat portfolio to strengthen industry resilience, and enable Australian producers to capture greater value.

MLA action

MLA has approached relevant supply chain partners to support those supply chains and brand owners seeking to pilot the commercial growth opportunities identified.

Future research

MLA to partner with stakeholders to develop a specific new product, explore opportunities for initial pilots and continue to invest in the promotion of Australian sheepmeat.  

Several data gaps, particularly around the consistent reporting of volume and value of Australian hogget have been identified during the process of this project. Therefore, there may be further opportunities to improve the data and reporting around non-lamb sheepmeat in Australia and better understand and align the definition and characteristics for premium non-lamb products.