Dr Katherine Wynn, senior economic advisor at CSIRO Futures, the strategic advisory arm of national science agency CSIRO, said of the AU$25 billion market, health and wellness would make up more than half (54%) of the market.
Alternative protein and sustainable products are forecast to make up 18%, with the remaining 28% being premium products like convenience meals and luxury products.
She told FoodNavigator-Asia: “The health and wellness, sustainable solutions, and premium segments will see higher growth (3.6% per annum) compared to the food and agribusiness industry as a whole (2.4%).”
The food and agribusiness sector currently contribute about AU$138 billion to the economy.
“We expect Australia’s brand for safe and high quality food and agribusiness products to help industry capture growth in these growth markets,” she added.
Fortified, functional, and personalised nutrition
“As consumer demand for healthy foods and foods with added health benefits increases, foods such as enriched yoghurt and fortified breakfast cereals are likely to claim a larger chunk of the $25 billion pie,” said Wynn.
The domestic consumption for fortified and functional products is expected to reach AU$5.5b (US$3.7b) by 2030, while the opportunity for exports is expected to reach AU$4.2b (US$2.8b). The growth is estimated at 3% p.a.
Perhaps the biggest opportunity within the health and wellness trend is personalised nutrition, which is estimated to increase 19% p.a from US$44m in 2018 to US$370m in 2030.
As consumer awareness improves and the price of services fall, weight-loss programmes, gyms and fitness centres, private health insurance providers, grocery stores and specialty stores are expected to be important channels for personalised nutrition solutions.
Wynn also said that continued global population and real income growth, particularly across the Asia-Pacific, would drive total food demand over time.
On top of increasing food demand, ethical, cultural, religious, environmental and dietary factors are expected to increase consumer demand for alternative protein sources over the next decade.
Wynn added that the meat alternatives market, such as plant proteins and insect-based ingredients, would fuel the growth.
The alternative protein market is expected to increase 5% p.a. both domestically and export as demand increase from export markets with large vegetarian populations.
“For example, India has a relatively larger population that eat predominantly vegetarian and may exhibit relatively greater demand for alternative proteins sources over time.”
Market research has also shown that consumers are more willing to pay a premium for sustainable brands, which could see greater economic as well as environmental benefits.
Wynn called for the industry to take action to capitalise on these growth opportunities.
She said it was important to understand how consumer trends and preferences are changing, which can help the industry to innovate accordingly.
“Continued improvements to food safety and systems is also important, especially as Australian produce needs to travel long distances to key export markets,” she added.
Investments in traceability systems can also help the industry to further leverage Australia’s brand in agribusiness and improve consumer trust.
Adding that these high growth opportunities would also attract significant global competition, “but investment in the right skillsets can help industry to participate in future food markets more successfully.”
“Continued efforts to strengthen linkages within the local supply chain will also support industry’s overall capacity to deliver high quality products and innovations to market.”
She added that if Australia harnessed these opportunities, the food and agribusiness sector could successfully become a growth orientated, de-commoditised, value-adding and differentiated sector.
“Achieving this growth will depend on continued innovation and investment by all players in the food industry,” Wynn said.