The global beef consumer A diverse and demanding beast Scott Tolmie Market Intelligence Manager MLA’s remit • Research, Development and Adoption • Marketing Source of Levies – Primarily producers, along with government, processors and external partners Producer Levy $5 per head Marketing per transaction Grassfed ~45% of spend $5 per head per transaction Grainfed 20c per head Research & per transaction Sheep Development $1.50 per head per transaction Lamb ~55% of spend 37.7c per head per transaction Goat The global beef consumer A diverse and demanding beast Varied role of beef Across a range of countries, consumers reflect diversity in their protein consumption Consumer Health Availability Income Perceptions Culture/ Religion National Environmental History Considerations Competition Trade Policy Social Dietary Concerns Preferences Natural Place of Resources Origin Role of beef around the world • Long history of consumption in many markets • Constitutes a major dietary protein globally • Encompasses a wide range of products (low value offal to high value Wagyu cuts) • In many western countries often considered the “prime” meat • This role changes as we shift to Asia and the Middle East Source: OECD-FAO Role of beef around the world Beef as a % of Protein Consumption (excludes Seafood) 30% 28% 22% 18% 13% 10% 9% US Australia Japan EU Asia Saudi Arabia China Source: OECD-FAO Although consumers’ protein intake varies across the globe, their perceptions of proteins remain relatively consistent T H E S TA P L E THE CURIOSITY • Unfamiliar, occasional purchase • Premium option • Cheap and easily available • Not sure what to do with it • Versatile and easy to prepare • Fatty • Bland T H E P R I M E • Taste is a barrier for some • Not very nutritious • In MENA and Australia, lamb is a ‘Prime’ • Good quality, good taste, superior meat THE SPECIALTY • Worth paying more for THE HEALTHY ALTERNATIVE • Nutritious • Few strengths or weaknesses • Nutritious • Weakly positive on animal • Low in fat welfare and sustainability • Fresh • Taste is a barrier • Tricky to use • Lean/tough • Welfare is not great • Unfamiliar and uncommon except • In SEA, fish is a cheap, low value amongst certain groups protein - elsewhere it is premium The global beef consumer A diverse and demanding beast Popular cuts and use Destination for Australian beef exports varies by grassfed vs grainfed Grassfed beef Grainfed beef 742,232 tonnes swt 27% 272,682 tonnes swt 73% Other Other 13% 19% US Europe 5% Indonesia 31% China Japan 6% 1,014,915 tonnes swt 10% 52% China 11% Korea Japan Korea 20% 13% 20% Source: DAWR Cuts also vary greatly… Saudi Japan US China Indonesia Arabia UK *Includes loin, tenderloin, shortloin, * Mostly trimmings and *Mostly trimmings *Includes mostly trimmings and * Mostly trimmings- forequarter rib *Loins include- tenderloin, shortloin, striploin and cube roll forequarter rib forequarter rib & finely textured beef striploin & cube roll ** Includes tenderloin, shortloin, **Includes minced beef and striploin and cube roll hamburger ground beef Source: DAWR Along with use within the market… Brisket Noodle Soup Gyudon Beef Rice Smoked Brisket Bowl Brisket Chilli Brisket Brisket Barbeque Soup Along with use within the market… Beef Pho Beef Bento Slow Cooked (Noodle) Box Beef Top Side Stir-Fried Philly Beef Cheesesteak Along with use within the market… Gyu Tan Slow Cooked Beef (Beef Tongue) Cheek Beef Skin Curry Offal Tripe in Soup Tail Soup The global beef consumer A diverse and demanding beast Attitudes towards fat Consumers have a broad range of views about fat in meat Each market spans multiple viewpoints about fat, often in the same person The choice they make will ultimately be determined by the occasion Size of “Fat Clusters” A u s t r a l i a 11% 15% Stage 1 - Lean Meat Eaters “Fat is unhealthy” Stage 2 - Fat Apologists “I prioritise health over enjoyment” 19% Stage 3 - Fat Appreciators “Fat adds taste and tenderness to meat” 28% Stage 4 - Fat Lovers “I love marbled steak” 27% Stage 5 - Fat Fanatics “I want more fat in my meat” The global beef consumer A diverse and demanding beast Challenges of a developed market Australia is still the largest market for our beef, but growth is difficult Beef is #1 of Australians value fresh meat protein 97% considering purchasing beef 3x the size of fresh pork Source: ABS Source: Beef Beef 1,000 1,500 2,000 2,500 500 - Mar-00 index to chickento index Oct-00 Chicken vs Pork vs May-01 220% Dec-01 Jul-02 Feb-03 Sep-03 Apr-04 Nov-04 Jun-05 Jan-06 Beef Aug-06 Mar-07 Oct-07 to chicken index Pork May-08 290% Dec-08 – Jul-09 Retail Price Retail Chicken Feb-10 Sep-10 Apr-11 Nov-11 Jun-12 Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 to chicken index Jul-16 360% Feb-17 Sep-17 Source: ABS Source: Beef Beef 1,000 1,500 2,000 2,500 500 - Mar-00 index to chickento index Oct-00 Chicken vs Pork vs May-01 220% Dec-01 Jul-02 Feb-03 Sep-03 Apr-04 Consumption Nov-04 Jun-05 Jan-06 Aug-06 Mar-07 index to chicken index Beef Oct-07 May-08 290% Dec-08 – Jul-09 2 per. Mov. Avg. (Consumption) Avg. Mov. 2 per. Retail Price Retail Feb-10 Sep-10 Apr-11 Nov-11 Jun-12 Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 to chicken index Jul-16 360% Feb-17 Sep-17 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 The challenge has been to better demonstrate beef’s value beyond price along with it’s versatility While not forgetting nutrition, provenance, sustainability and eating quality Easy Quality Healthy Versatile Sustainable The global beef consumer A diverse and demanding beast Global mega trends WHAT IS A MEGATREND “A global pattern of change in economic, social, technological or cultural context that produces changes in consumer behaviours and attitudes” TRENDS DO NOT OCCUR OR INFLUENCE IN ISOLATION Source: Kantar Milward Brown Mega trends: • More for less • Great expectations • Convenience • Health & Wellness • Reach of Technology Mega trend 1: More from less Organic / Natural Organic ticks a lot of boxes and is a ‘shortcut’ for many consumers Sources: Australian Organic Market Report 2017 Mega trend 2: Great Expectations Socially Responsible, Sustainable, Locally Grown Mega trend 2: Great Expectations Shoppers are very concerned about… Trends are reflected in Australian data Air Pollution Water Supply 32% 32% 26% 29% Climate Deforestation Source: Canadean 2015 Q1 Consumer survey Sources: NPD Group “Tracking Food Attributes in Australia (2016) The Farmer’s Daughter “Carefully looked after morning, noon and night to make sure they are happy” 100% Traceable Irish Beef Sourced from free roaming animals Grass based diet Mega trend 3: Need for convenience The majority of shoppers decide what to eat for dinner in the 24 hours before the meal. Eating and shopping habits are also changing, with the meal planning window shortening Source: Australian Tracker, Google Trends Mega trend 4: Health & Wellness Reflect increased awareness and taking control TRANSPARENCY HEALTH TRACEABILITY FUNCTIONALITY SUSTAINABILITY ORGANIC FREE RANGE GRASS FED CLEAN LABELS HORMONE FREE INSECTICIDE FREE Source: Kantar Milward Brown Healthy lifestyle habits are becoming a normal way of life - red meat has historically been villainised with a fear of fat front and centre But the world is changing and sugar is the new As fat makes a comeback, beef has the fat – 61% of people are avoiding sweet foods opportunity to revisit its place on global dinner vs. 36% meat tables much as butter has done in recent years GOOGLE SEARCH TRENDS BUTTER PRODUCTION – GLOBAL (MT) 120 12000 11500 100 low carb: (Worldwide) low fat: (Worldwide) 11000 80 10500 10000 60 9500 40 9000 8500 20 8000 2010 2014 2015 2020 0 21/04/2013 21/04/2014 21/04/2015 21/04/2016 21/04/2017 Source: Kantar Milward Brown Mega trend 5: Reach of Technology Frictionless ordering Smart Fridges and toilets Source: Kantar Milward Brown.