Food touted as Australia's biggest export prospect

Thursday, 21 November, 2013

Australia’s high food standards and quality ingredients are the driving forces behind export growth in emerging markets. IBISWorld forecasts manufacturing subsectors - including baby food, dairy and beer manufacturing - to shine in the next five years.

Australia is expected to generate $317.6 billion in export revenue in 2013-14, rising as a percentage of GDP over the past decade. Bulk commodities such as iron ore, coal, gold and natural gas have been our biggest exports and Asia is Australia’s most significant export market, accounting for the majority of exports. But Australia’s export landscape is evolving and information analysts at IBISWorld have revealed the five biggest export prospects - beyond mining commodities - in years to come.

Topping the list is food manufacturing, followed by oil and gas extraction, beer manufacturing, education services and related travel services, and legal services.

According to IBISWorld General Manager (Australia) Karen Dobie, macroeconomic factors are tipped to favour exporters over the next five years, particularly as a result of growing demand from Asian trading partners. Australian exports will become increasingly price competitive as the value of the dollar softens against the currencies of Australia’s major trading partners.

Food manufacturing - baby food and dairy

“Revenue for Australia’s baby food manufacturing industry is forecast to grow by 2.9% per year over the next five years to reach $206.7 million, while revenue for dairy product manufacturers is forecast to grow by 2.1% to reach $12.8 billion”, said Dobie. “Exports are playing a key role in driving growth in both of these sectors. Baby food exports are anticipated to rise by 6.5% per year to $22.5 million by 2018-19, while dairy product exports are expected to rise by 5.2% per year, with milk powder and cheese exports performing particularly well.”

Key markets driving growth include China and India, which are exhibiting growing demand for a greater variety of high-quality products. Population growth and increasing wealth in the growing middle classes of Asian trading partners have made these products more accessible to a wider market.

Beer manufacturing

IBISWorld expects Australian beer manufacturers will place an increased focus on new export markets in the Asia-Pacific region over the coming five years as domestic consumption of traditional beer products - such as VB and Carlton - continues to fall as Australians opt for alternative beverages such as craft beer, cider and wine.

“Exports as a share of total industry revenue are expected to grow from 0.8% in 2008-09 to 1.4% by 2018-19, assisting to boost overall industry growth from a sluggish 0.9% per year over the past five years to 1.7% per year in the next five years,” said Dobie.

In 2013-14, IBISWorld expects total beer manufacturing industry revenue to be $4.7 billion, and this is forecast to rise to $5.1 billion by 2018-19.