Knowing the beef customer is key, say bankers, industry leaders

Demand increases to 2035, by big agribusiness financer Rabobank’s books, are expected to be: Beef 30 per cent, seafood 30pc, poultry 65pc, pork 35pc and eggs 50pc.

“The other thing to keep in mind is that in five years time there may be a non-natural alternative for beef to compete with,” said Rabobank’s senior analyst animal protein Angus Gidley-Baird.

Already, seemingly in anticipation of this, a burger chain in the US was promoting “all natural beef”, he said.

Increased production, of course, means increased exports.

Rabobank does not see the make-up of the big exporters, where Brazil, India and Australia dominate, as changing greatly.

The unknown is India, with Mr Gidley-Baird saying it was difficult to obtain hard numbers from India.

Animal protein consumption growth would be dominated by Asia and Australia was perhaps the best placed to take advantage of that, he said.

Geographical advantages, trade agreements and well-nourished business relationships all added up to significant head start.

Meat and Livestock Australia’s general manager of international markets Michael Finucan said global demand for beef may be strong but it was an incredibly competitive game and Australia needed to continue to build on market intelligence and market access.

“Knowing what the customer wants is key,” he said, at MLA’s annual general meeting in Adelaide in November.

It had been a tough year in international markets for beef,  given the short supply due to rebuilding, and total exports were down 21pc, he said.

Understanding global megatrends began with looking at world populations and incomes and where meat was flowing but it was much more.

It was about drilling down to look at who beef’s customers are, where they live and why they purchase meat, Mr Finucan said.

It was also about keeping an eye on where competitors were infiltrating our markets.

MLA research had uncovered the key driver for preferencing red meat was reaching an annual income of A$35,000 – that was where the shift happened, he said.

“We are seeing good potential growth, particularly in developing nations, in that income bracket across the world,” he said.

“But we also need to look at what the consumer is thinking. We know that price and convenience is a major driver but attitudes are also important.”

Mr Finucan outlined MLA research which showed, for example, that in developing countries it was very much about whether a meat option was easy to prepare and familiar with customs.

In more developed markets, purchases are made  around whether it is a family favourite.

“To put that in perspective, Japan and Korea have strong domestic Wagyu products. Australian beef is cheaper and so is seen as an affordable everyday beef protein there.

“In China, however, we are the most superior product – the local beef sector is not as sophisticated.

“Understanding these things helps us position ourselves in these markets.”

Market access was also a key driver of growth, Mr Finucan argued.

“We hear a lot about the growing middle class in China but that opportunity comes with challenges,” he said.

“China’s cold chain is still developing so frozen product is preferred because they can manage it better.

“However, our research clearly shows the Chinese consumer’s number one driver for purchasing beef is freshness.

“We need to find ways to break the market access barriers to get chilled product in.”

Australia has solid strengths in China. For quality, guaranteed safe-to-eat and willingness to pay more categories in consumer research, we are number one.

“But it’s a competitive environment and others are right on our heels,” Mr Finucan said.

“We need to continue to build a better understanding of the consumer, and combine that with increased access, to narrow down the opportunities in China.”