From hotpot to halal: how sheepmeat exports will grow over next three years

The trends are highlighted in Meat & Livestock's latest global snapshots.

Analysis shows lamb and mutton frozen cuts such as breast and flap, carcase and neck are being snapped up for use in hotpot restaurants across markets including China, Taiwan, Malaysia and Singapore.

While sheepmeat and sheep offal don't have much of a foothold in homecooking in China, they are a popular street food in the form of skewers and in thin-slice form in hot pot.

MLA category and market insights manager for global emerging markets Vivian Harris said hotpot was a great way of sharing a meal together over a long period of time and of trying different meats.

"I think during the COVID-19 people were also craving hotpot and particularly sheepmeat in hotpot but couldn't go out so there was a bit of a drive in hotpot sets in the home," she said.

"But hotpot isn't the only driver in demand for sheepmeat... there has been growth in demand for higher value cuts and the ones we have noted are cuts like rack, backstrap, bone in and boneless loin and short loin.

"I think we've seen that driven not only by high end food service... but also high end retail.

"One of the positive outcomes of African Swine Fever and the pandemic is that Chinese consumers became much more interested in having a greater variety of proteins but also high value, nutritious and healthy proteins that they could use to support their immunity.

"They also perceived that lamb became more affordable when the price of pork skyrocketed during that African Swine Fever pork shortage."

Around two-thirds of the sheepmeat in China is typically consumed outside the home, with China's total lamb sales forecast to grow at a CAGR of 5.8pc from U$15.3 billion in 2022 to U$18.6 billion by 2027.

Domestic tourism in China is another key trigger for lamb uplift, with a boom in demand for grilling cuts that can be eaten while camping or glamping, Ms Harris said.

"We've actually seen something similar in South Korea and Taiwan as well," she said.

In Hong Kong, sheepmeat consumption had been declining but MLA anticipates it will turn around to grow at a CAGR of 4.6pc from around 7000 tonnes in 2023 to about 9000 tonnes in 2027.

"What our data sources suggest is that international tourism is a particular growth driver of demand in Hong Kong," Ms Harris said.

"A data source we subscribe to suggested that in 2023 there were 14 million tourists visiting Hong Kong but this year in 2024 they're forecasting 24 million.

"Naturally mainland China is one of the single largest sources of tourists for Hong Kong so their enjoyment of sheepmeat is going to be reflected in the offering in Hong Kong to meet those needs."

Meanwhile the Middle East, the majority of lamb is imported in carcase form but premium lamb consumption and imports have been growing, suggesting further opportunities are available to get lamb on more high end menus.

With demand continuing to rise, boxed sheepmeat imports will need to increase from 173,000 to 205,000 tonnes from 2023 to 2027 to service the market.

Total consumption in Australia's main MENA markets is forecast to increase at a compound annual growth rate of 2.3 per cent from 2023 to 2027 from around 641,000 to 702,000 tonnes, with roughly half of sheepmeat destined for food service.

Research shows that consumers in key Middle Eastern markets associate Australian lamb as being consistent in quality, fresh, and being able to be trusted to be halal.

Ms Harris said Australia was well-placed to take advantage of burgeoning demand given the strong reputation of Australian sheepmeat in that market.

"Always a high proportion of our sheepmeat goes to MENA because they have strong demand for it and we just happen to have more of it at the moment and that makes the prices more favourable," she said.

Mulwarra Export commercial manager Angus Winterflood said there was definitely good potential for lamb to take up more space on menus, with growth in a number of Asian markets.

"It's hard to quantify the growth because of COVID-19 and the issues with food service and different cost of living pressures overseas but we are seeing a gradual increase in interest in lamb," he said.

"In Asia and South East Asia we're seeing a shift in the demographics of lamb as a protein... obviously we've got to be competitive price wise as compared to other proteins but we're seeing the younger generation move towards accepting lamb. "

Mr Winterflood said the Middle East was another market with good growth potential, with lamb traditionally playing a big part in diets there.

"An issue they have with a lot of markets is supply restrictions... Australia can supply 12 months of the year and in good volumes so they have a lot of trust in the consistency of our product and our supply," he said.

Mulwarra Export's portfolio of customers includes hotel chains, restaurants and catering companies.

"For us as a company we're seeing the bigger volume pulls from big hotels and catering companies for Australian lamb to use it on the menus, where fine dining restaurants can change the menus very seasonally two or three times a year," Mr Winterflood said.

"Generally fine dining will just want to focus on racks and the loin cuts where bigger hotels have the capacity to be a bit more versatile with your legs and shoulders... they've got the capability to diversify a little bit more with lamb.

"We're seeing in Asia now a lot of Middle East travellers going across to Thailand and Malaysia and places like that for holidays and they want lamb... so that's helping quite a lot [to boost demand in hotels]."