Opportunities aplenty for Australian consumer products industry

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Opportunities aplenty for Australian consumer products industry

  • World’s 250 largest consumer products companies now generate nearly US$3.1 trillion in sales
  • Just one Australian consumer product company features in the top 250
  • But, Australia is well positioned to benefit from regional opportunities on its doorstep.

25 June 2015: The world’s 250 largest consumer products companies generated sales of nearly US$3.1 trillion in the fiscal year 2013 (which encompasses fiscal years ended through to June 2014). This resulted in an average company size of US$12.3 billion, according to the 8th annual Global Powers of Consumer Products 2015 report* issued by Deloitte.

“The fall in the price of oil is having a considerable impact on the global economy, with increased disinflationary pressures, especially in developed markets such as the US, Europe, and Japan. It is boosting consumer purchasing power in oil-consuming nations such as Japan, India, the US, and much of Europe, and contributing to faster economic growth than would otherwise be the case,” said Katie McNamara, partner and consumer products industry leader, Deloitte.

Just one Australian consumer product company resides in the Global Top 250 (Coca-Cola Amatil, 151st), however almost a third of the companies have business operations in the country. The world’s largest meat processor, JBS, joined the Global Top 10 as it completed its acquisition of Australian-owned small goods manufacturer Primo.

McNamara explained the attractiveness of the Australian market is being driven by positive business conditions where macroeconomic factors, such as the falling value of the Australian dollar and new free trade agreements, are increasing our global competitiveness.

“Firm consumer confidence levels remain a key positive driver for the consumer product sector. The strong showing by Asian companies in the Global Top 250 highlights the regional opportunities on our doorstep. Given the growing Asian middle class and their desire for fresh, clean and safe produce, Australian consumer goods is a strategically appealing industry, with significant opportunities in consumer products, food and beverage, manufacturing, dairy and other agribusiness,” she said.

This growing appetite for high end, premium product was reinforced by the identification of value-added food processing as one of 25 compelling growth opportunities for Australia over the next 20 years in Positioning for Prosperity? Catching the next wave, the third in Deloitte’s Building the Lucky Country series. Value-added food processing is an extension of agriculture – already identified as one of the ‘fantastic five’ sectors that could be worth an extra AU$250 billon to the economy.

“In Positioning for Prosperity? we suggested the opportunity for Australian producers is the need to move from producing commodity products to growing, processing and supplying premium produce,” McNamara added. “We’re beginning to see a shake-out of the well-established players occurring alongside the emergence of specialists operating in the premium space where they are in a great position to exploit new market growth.”

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Australian trends in the consumer products industry

Sector performance within the consumer products industry has been significantly varied (see Figure 1):

  • The apparel, print and machinery subsectors have struggled with low to negative growth rates over the last couple of years and are forecasted to deteriorate even further
  • The transport and logistics industry has performed well and is forecast to continue to benefit from social and demographic trends, the growth of online retail and the shift towards direct-to-consumer channels
  • Agribusiness has experienced growth thanks to increased global opportunities. However, market fragmentation remains the key constraint to increased production, greater cost efficiencies and higher earnings
  • Food and beverage manufacturing has faced moderate growth due to higher cost of doing business in Australia in the face of strong internal competition.
Figure 1: Please select the image above to enlarge.

Figure 2

Top 10 consumer products companies fiscal 2013 (fiscal years ended through to June 2014)
Figure 2: Please select the image above to enlarge.

* The Global Powers of Consumer Products provides an outlook on the global economy, a look at merger and acquisition activity in the consumer products industry and a discussion on the importance of connecting with the connected consumer.

† Source: published company data.

†† Nestlé’s sales for 2010 – 2013 reflect an accounting change. Comparable sales figures for years prior to 2010 are not available.

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.

About Deloitte Australia
In Australia, the member firm is the Australian partnership of Deloitte Touche Tohmatsu. As one of Australia’s leading professional services firms, and winner of both the Australian Financial Review/CFO Audit Firm of the Year and Accounting Firm of the Year awards 2013, Deloitte Touche Tohmatsu and its affiliates provide audit, tax, consulting, and financial advisory services through approximately 6,000 people across the country. Focused on the creation of value and growth, and known as an employer of choice for innovative human resources programs, we are dedicated to helping our clients and our people excel. Formore information, please visit Deloitte’s web site at www.deloitte.com.au.

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