VIEWS ON BEEF
QUESTION: What sort of market trends are we likely to see in the decade of the 2020s?
ANSWER: Imagine a world where your fridge does your shopping, delivery is done by drones, or you print your food in any form or nutritional value you want. This is happening now. Yet if you go back 10 years, these things were not on the radar. So what market trends are on the horizon for the Australian beef industry in the decade of the 2020s?
Predicting the future is not an exact science but here are some of the trends likely to have an impact on the Australian beef industry in the 2020s.
At a global level, beef production growth is expected to be driven by the South America’s. This will not only be in volume terms but development of genetics and access to improved pastures and feed grains will see changes to their product offering and position them closer to where Australia is today, but on a larger scale.
On the consumption side, growth is expected to continue to come from China and the South East Asian countries. Their current low per capita consumption will grow as cold chains and household incomes increase. While a positive, given Australia’s geographic location, the growth of online shopping, improved packaging and transport will erode this geographic advantage and ensure growing competition in the area.
The challenge lies in being able to adapt to the new market trends and take advantage of the new opportunities.
E-commerce will continue growing and the retail landscape will continue to evolve. Although not becoming the dominant form of retail; online sales, meal kits and other channels to market will shape the packaging and product mix for beef and it will also bring the consumer closer to the producer. The ability to connect directly will prompt greater awareness and interest by consumers and provide greater avenues for specialisation or market selection by producers.
This also has the potential to drive supply chain change, with reduced use of general marketing options such as cattle auctions to more tailored, collaborative supply chains designed around more specific product lines. This has the potential to favour Australia given the comparatively smaller and therefore more flexible beef operations compared to competitors such as the US and Brazil.
Quality and nutritional value will become more important. Growing global volumes and the ability to objectively measure traits will drive the requirement for improved quality as suppliers look to differentiate their products. As the ability to measure improves and awareness increases, consumers will demand more specifications. Just as grassfed, organic, HGP free and other requirements around sustainability and welfare are current trends, consumers will start seeking nutritional values of their food to match their requirements.
Domestically, increases in automation, robotics and sensor technology will support improvements in efficiencies and accuracy right through the supply chain. Current challenges such as access to labour and labour costs could be ameliorated, improving Australia’s cost competitiveness. Greater automation may also support smaller, more flexible operations that could lead to a “micro” beef industry driven by producers with specialised products.
While some or all of these may come true, the test for the Australian beef producer is how they position themselves to take advantage of such change. Initiatives such as NLIS, welfare protocols, biosecurity, and genomics have positioned the Australian industry well, however these advantages will be eroded over time. The challenge lies in being able to adapt to the new market trends and take advantage of the new opportunities.