Australian sheepmeat future looks positive, but not without it's challenges

And according to MLA’s global manager of industry insights and strategy, Natalie Isaac, speaking at the big industry event Red Meat 2018, the outlook is looking relatively positive with a continuation of growth around the world. 

The bulk of consumption has been happening in developing markets, driven by Asia, with exports doubling in that time.    

Similarly markets like the US have doubled, where sheepmeat is a niche protein.

But the industry is facing some challenges, and momentum must be maintained by driving awareness through education and differentiation, she said.

“The industry is facing some headwinds – some of these around price, competing proteins and lifestyle choices,” Ms Isaac said. 

“And the markets which we supply to are rapidly changing.” 

From a global production point of view, Australia is a relatively small producer of sheepmeat representing seven per cent of total production.

But Australia plays a big role when it comes to exports, representing around 40 per cent of total sheepmeat exports, in tight competition with New Zealand.

In the last 15 years, exports have grown by 15 per cent. 

But what is interesting is the lamb equation, which has changed considerably when talking about slaughter versus price. 

“What we saw 15 years ago was lamb production would go down, price would go up and vice versa,” Ms Isaac said. 

“Ten years ago was a similar story – lamb production would go up, price would go down. But in the last four years, the equation appears to have changed  – lamb production is going up in line with price.” 

So the question is, has the equation changed of are we nearing a tipping point?

Ms Isaac said the industry needs to maintain the momentum it’s had in the last four years and make sure it is not at a ‘tipping point’.

“In a market like Korea only 25pc of consumers surveyed have actually purchased sheepmeat compared to a market like Australia where nearly 90pc of consumers have purchased sheep meat,” Ms Isaac said.  

“So there is a real opportunity to drive awareness of sheepmeat in some of our more traditional markets.”

Education is the key according to Ms Isaac. 

“We asked consumers why they haven’t bought sheepmeat and the reasons that they gave us were centred around not being familiar,” she said. 

“We can educate on not being familiar and make it more familiar for them.”

She said there was also a group who don’t buy it to cook at home, but they will buy it in food service. 

“We can use food services to educate,” Ms Isaac said. 

“But the last piece of the equation the industry must focus on is around differentiation. 

“It is neck and neck between Australia and NZ so in those markets where they are established and we are established, we need to continue to differentiate.

“Similarly in some of the growing developing markets as well, you have a lot broader range of competitors and having that point of difference is important to maintaining the premium.”