Understanding Australia's Business and Consumer Environment: A Guide for Successful Business Down Under

Understanding Australia's Business and Consumer Environment

How will Australia's economy, business environment and consumer trends impact the success of your business? This e-book examines the fundamentals businesses must understand to successfully expand or operate in Australia.

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Heralded as the success story among advanced economies for weathering the global economic downturn of 2008-2009, Australia’s high income levels and steady growth offer good opportunities for consumer goods and services in a wide range of sectors.

Key Findings:

• At the height of the global slowdown, advanced economies as a whole contracted by 3.5% - contrasting with Australia’s 1.4% growth.
• Whereas incomes and consumer expenditure have stagnated across many advanced economies, Australia’s per capita disposable income and expenditure have expanded by 9.8% and 3.5% respectively in real terms since 2008.
• In 2012, Australia was ranked 15 out of 183 economies on the World Bank’s Ease of Doing Business Index, meaning it is the fifteenth easiest place in the world to start and operate a local firm.
• Australia has an educated population: 99.9% of adults (those aged 15+) were literate in 2011, but suffers from skills shortages.
• In 2011, the population aged 45-49 in Australia had the highest average gross income: A$77,810 (US$80,259).

Topics include:

• Ease of doing business rating
• Corruption index
• Literacy rate
• Future challenges
• Natural resources
• Media consumption
• Consumer trends
• More

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Unilever: Is Creating its Own Tea Pod Machine a Risk Worth Taking?

Analyst Insight by Hope Lee, Senior Analyst - Beverages, Euromonitor International

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As fresh coffee manufacturers look for growth opportunities from pod machines, tea giant Unilever can also consider creating its own branded system. In a Q1 2013 financial release, Unilever reported improved tea revenues, achieving mid-single digit growth. The company attributed its good results to “improved product quality, stronger mixes and improved in-market execution”. Analysts are asking if these factors are sufficient to maintain the long-term growth of its tea business. In a recent conference, Unilever’s Executive VP of Global Beverages was reported as saying that tea capsules and the out-of-home market offer a premium opportunity. Tea, a minor business for the fmcg giant, could make a positive contribution to its corporate financial objective of achieving revenues worth €80 billion by 2020 if this premium opportunity is seized at the right time.

Thinking Again… The Future of Coffee Pod Machines

Analyst Insight by Lorenza Della-Santa, Senior Analyst - Consumer Appliances, Euromonitor International

Last October I explored the striking differences between consumption of coffee pods and fresh coffee in Western Europe and the US, and what that meant for future sales of coffee machines. I came to the conclusion that “…perhaps by investing more in open coffee brewing systems, manufacturers could favour with consumers who might be willing to spend more for a coffee machine that offers them free choice rather than being tied to a brand for life’.

It might be time to think again…

Webinar Recording - Soft Drinks in 2013: The Quest for Growth in a Multi-polar World

In this valuable new webinar, Euromonitor International’s global soft drinks team takes a closer look at the many paths to growth in a fast-changing world, paying special attention to the trends and products which will define the next five years. Of interest to soft drinks manufacturers, retailers, foodservice operators, and all those with a stake in the global soft drinks industry, this presentation offers a fresh look at a highly complex global demand environment.

Beverage Ingredients: Trends and Influences

Analyst Insight by Cathy Boyle, Contributing Analyst at Euromonitor International

The global beverage market of the modern era is very different from that of the past, having moved way beyond the idea of simple refreshment to become increasingly diverse and complex. This situation is placing pressure on ingredients suppliers to satisfy the ever evolving needs of beverage innovators, while at the same time facing their own economic and sustainability challenges.

Perhaps the single most important theme in beverage innovation in recent times has been the need for more naturally healthy ingredients. For example, superfruit juices and flavours have taken hold in soft drinks NPD in recent times, while more recently coconut water has started to emerge as another botanical ingredient with significant potential. Aloe vera is also benefiting from the drive towards natural health, while energising botanicals are finding a place in the thriving energy drinks market. Naturalness is also impacting on the development of flavour and colour ingredients as product formulators look to exclude all artificial ingredients from their recipes, while stevia’s emergence as a new force in the sweeteners category is still largely centred on beverage applications and is opening doors to the creation of reduced-sugar and reduced-calorie options with a natural positioning.

Global Coffee 2013 Edition: A Year of Spin-offs

Analyst Insight by Hope Lee, Senior Analyst - Beverages, Euromonitor International 

Coffee multinationals saw a huge shake-up in 2012, reflected in the birth of Mondelez International from Kraft and DE Master Blenders 1753 from Sara Lee. Coffee marketers are thus assessing the changed competitive landscape, new challenges and new strategies.

Nestlé maintained its strong leadership with a 23% share while second-ranked Mondelez trailed way behind with 11% . Armed with three global brands, Nespresso, Nescafé and Nescafé Dolce Gusto, Nestlé is likely to maintain its leading position over the next few years. Nestlé, however, has no presence in Brazil’s standard fresh ground coffee category, which is forecast to be a key growth driver, and so should rectify this situation quickly. On a positive note, Nespresso currently dominates Brazil’s pod sales and is well positioned to grow the category. However, the expiration of some of Nespresso’s patents, combined with players attempting to cannibalise Nespresso’s share of coffee pod sales, will pose a challenge.

Global Tea 2013 Edition: Chinese Companies Move Up Their Rankings, while DE Master Blenders Likely Looks for Acquisition Targets

Analyst Insight by Hope Lee, Senior Analyst - Beverages, Euromonitor International

Compared to soft drinks and coffee, tea is a rather static market, with no major acquisitions stirring up the landscape in 2012. While a wide geographic coverage enables multinationals to generate revenue, Chinese companies’ success in focusing solely on the domestic market and on a single strong growth category (instant tea) highlight the attraction of operating in the world’s most populated country and exploiting the thirst of young consumers.

Dessert Cafés Shake Up South Korea's Competitive Coffee Shop Market

Analyst Insight by Elizabeth Friend, Analyst - Consumer Foodservice, Euromonitor International 

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South Korea’s specialist coffee shops category is one of the largest in the world, at US$1.4 billion in value and with explosive growth driven by rapid outlet expansion. Caffé Bene, the local outlet leader, went from 17 outlets in 2008 to over 600 in 2011, and plenty of local competitors have ramped up their own outlet expansion in order to keep up. This growth has also been driven by widespread appeal among urban demographics, from young professionals to retiring baby boomers, and just as demand has exploded, so too has the competition, with no less than ten major chains now battling for share of the vibrant market. While outlet expansion remains high, saturation is becoming a threat in premium locations, and operators are seeking out other ways to grow their revenue and differentiate themselves. Amidst this, a new kind of player is emerging: chained cafes with significant food offers, modern Western-style outlets and positioning that goes far beyond coffee and baked goods.

Coffee Pod Markets in Western Europe

Coffee pods continue to be the fastest growing coffee category in Western Europe, with pods accounting for over 50% of all fresh coffee retail sales in France, Spain and Portugal. While pods are often an example of growing premiumisation in many markets, the rise of them in Spain and Portugal is actually indicative of the economic crises across the region. As income levels of many consumers decline, many are having breakfast at home rather than in cafes; thus pods and pod machines continue growth. Meanwhile, markets such as Germany and Italy continue to post solid values across all fresh coffee categories. But there is opportunity in the Nordic nations where per capita coffee consumption is some of the highest in the world, but consumers have yet to fully embrace the single serve pod format.

Three Takeaways from the Lipton / Green Mountain Partnership

In early March 2013, Lipton announced a partnership with Green Mountain Coffee Roasters, manufacturer of the Keurig single serve coffee machine. Although Keurig does offer single serve tea already, Lipton is hoping that its well-known brand will turn coffee drinkers into tea drinkers. Jonas Feliciano, Beverages Industry Analyst at Euromonitor, offers three key takeaways from the deal, and how the partnership blurs the line between soft drinks and hot drinks.

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