Emerging Industry Sector Analysis
Associate Professor Dawn Birch
MKG721 Food Marketing
The report main purpose is to examine the competitive challenges and opportunities facing the Australian Plant based milk industry. With the help of the Porter’s five forces, PEST and secondary data analysis was conducted to fulfill the reports purpose. Main findings derived from the analysis showed that Plant-based milk such as soymilk shows a rapid growth in the Australia plant based milk industry. Sales of plant-based milk are on the rise while dairy is in decline, and emerging as the alternative of Dairy industry. Furthermore, conclusion display the position of plant based milk as the alternative of dairy milk, but could create its own identity besides calling it as substitution of milk. Moreover, Australian plant based milk industry is new emerging industry because of the health awareness among the Australian people which lead it to grow, so there is less threat of substitution in current period and has wide varieties of Opportunities in coming time.
Table of content
Executive summary 2
Australia plant based milk industry market overview 4
Competition in the industry 4
Potential of new entrance in the industry 4
Bargaining power of supplier 5
Threat of substitute products 5
Political analysis 5
Economical analysis 5
Challenges and opportunities 6
The main objective of this report is analysis about the Emerging Industry sectors in Australia. In this regards Soy Plant based milk production industry seem gain popularity among the people of Australia. The soy plant-based milk production industry has benefited from rising consumer demand over the past five years. Industry revenue is expected to increase at an annualized 4.1% over the five years through 2018-19, to $165.8 million. This includes expected growth of 3.5% in the current year. CITATION IBI18 l 16393 (IBISWorld, 2018) So for deeper understanding about challenges and opportunities about the Emerging plant based milk industry (soymilk) in Australia, The Porter 5-forces Framework CITATION INVESTOPEDIA2018 l 16393 (INVESTOPEDIA, 2018) and PEST analysis CITATION wik18 l 16393 (wikipedia, 2018) may work as appropriate tool with the help of the tool can be easy in collecting information ; data regarding above industry, help us to find out the result from which a conclusions can be derived based on the findings.
Australia Plant based milk industry market overview.
So called “alternative milks” are rising in popularity, and new research shows consumers are increasingly lapping them up. Supermarkets now stock a range of plant-based milk such as Soy, almond coconut, hazelnut, rice oat and more recently, macadamia milk. The estimated worth of the plant based milks focusing on soy and almond milk is about $150 million. Over the past five years popularity of alternative milks has grown and expected 6% annum growth over the past five years. CITATION Mar16 l 16393 (Marty Mccarty, 2016) plant based milk represent 20% of global sales by 2021 while the popularity of animal milk declines globally, as Australia emerges as the second most popular product as ‘alternative milk’. CITATION Ins17 l 16393 (InsideFMCG, 2017).
Competition in the industry
There are various brand that are producing plant based milk ( soy ; almond milk) such as Pure harvest organic soy and almond milk, Vitasoy, BONSOY CITATION PET18 l 16393 (PETA AUSTRALIA, 2018) As plant based milk (soy milk) dairy alternative so its main competition is dairy industry. Increasing in consumer health consciousness the continuing promotion of the benefits of alternative milk that lead to gradual increase in milk consumption and revenue for the plant based milk industry. CITATION IBI14 l 16393 (IBISWorld, 2014). There is little competition in the plant based milk industry such as white wave Foods Company and SunOpta Inc. is some of the major player operating in the global dairy alternative market globally. CITATION mor18 l 16393 (mordor intelligence, 2018) 4 Potential of new entrants into the industry
The plant based milk has been progressively gaining popularity, as it is in emerging stages and as regarded as the substitution of the dairy milk. Soy milk has been the oldest option available to replace dairy milk. CITATION mor18 l 16393 (mordor intelligence, 2018) Although, there is no stated definition and classification regarding the alternatives of plant based milk in literatures, so general classification of the plant based milk is categories into five categories. Cereal based, legume based, nut based, seed based, pseudo-cereal based. CITATION JFo16 l 16393 (J Food Sci Technol, 2016).
5 Bargaining Power of suppliers
There are fewer suppliers in the plant based milk industry in Australia. Thought plant based – milk were rising rapidly rising popularity there has been a really small- increase in that non- dairy industry over the last few years. CITATION IBI18 l 16393 (IBISWorld, 2018) Statistics from the Australian health survey show that around seven in 10 are having cow’s milk with only 3 % having that alternative milk. CITATION IBI14 l 16393 (IBISWorld, 2014). Though it gaining popularity in the recent year supplier bargaining power of the suppliers is restricted as it mainly suppliers depend upon the giant’s supermarket Woolworths and Coles to sell the products. Overall, supplier power is considered to be moderate.
6 Threat of substitute products.
As the plant based milk is emerged as the substitute products of the dairy milk industry. Cow milk allergy, lactose intolerance, calorie concerned prevalence of hypercholesterolemia, more preference to plant based milk has influenced consumers towards choosing cow milk alternative. CITATION JFo16 l 16393 (J Food Sci Technol, 2016) Plant- based milk alternative are in rising trend in Australia and it is represented as the alternative of normal dairy product .In this context there are fewer possible threat of substitution of plant based milk in current scenario. CITATION Ins17 l 16393 (InsideFMCG, 2017)Such as
Cereal based: Oat milk, rice milk, corn milk spelt milk
Nut based: Almond milk, coconut milk, hazelnut milk
Seed based: sesame milk, flax milk, hemp milk
7 Political Analysis
Main challenges come from the dairy industry. The word milk is pronounced we think of white liquid that’s come from an animal. Anything that’s derived from plant is called juice. CITATION Cli17 l 16393 (jasper, 2017) So a new online petition being run by farmer lobby group dairy connect, to tighten the definition and use of the word milk in labeling in Australia. CITATION Cli17 l 16393 (jasper, 2017) So the main challenges regarding the plant based milk is the named itself. If a consumer is walking down the supermarket and sees a soy or almond product that is called ‘milk’ they may falsely believe that they are helping the dairy industry. CITATION jul17 l 16393 (sansone, 2017). People are consuming towards it due the health conscious and health benefit to be gained from drinking soymilk including lower cholesterol, lower blood pressure and protection against various cancers. CITATION Ang l 16393 (Tufvesson, 2016) So the opportunities may to creating own identity besides calling as alternative milk.
8 Economical Analysis
Plant – based or non dairy milk alternative (soymilk) is the fast growing segment in newer food product development category of functional and specialty beverage across globe and in Australia. The diary free milk has seen growth of more than 150% in the past five years and all the forecasts suggest this upward trend will continue. CITATION luc18 l 16393 (Marrett, 2018) The economical challenges of the plant-based milk are to maintain the growth with the passage of time.
9 Challenges and opportunities
Table 1.challenges and opportunities of Australia plant based milk industry
Australia plant based milk industry
The growth of the plant based soymilk industries in upward trending and expected to grow future. Challenges arise to maintain the growth as per the forecasting.
Plant based soymilk is said to be the substation of the dairy. But it possible challenges are creation of new substitution of its own thought it is few in current scenario.
Industry is in initial stage and its growing.
So supplier power to sell the good is in limited as it depend only in the Giant’s supermarket
The main challenges plant based milk come from the Dairy industry. As term MILK is used only when it derived from animal. The thing that derived from plant is said to be juice. So it main challenges is to creates its own identity apart of it calling as Alternative milk
Growth provides the industry to expand it resources and area. It is slowly replacing Dairy milk and considered as alternative
Of milk. With the decline of the dairy industry it Opportunities is to grab the market and create its own identity.
It has less substitution in the markets it Opportunities is grab the market gaps by making awareness about the benefit of the emerging product and hold strong position and may slow the process of new substitution.
So it Opportunities is grow the production facility and supply and advertise about the product benefit lead to increased in the demand, which decreased the dependency on the supermarket to sell the product.
So people are attracted toward the Plant based milk due to its benefit that derived from its. So with the growing popularity among the people industry chances is to create its own identity besides calling as a alternative milk.
Source: own illustration
With the increase in the health consciousness and the continuing promotion of its benefit gradually increase both the consumption and revenue of the plant based soy milk industry However, rising rapidly popularity there has been a small increase in the plant based milk industry over few years. Though the challenges of the plant based milk are moderate as there is less substitution as it is itself emerging as the alternative of the Dairy industry in the current scenario .On the other hand there is vast opportunities for the plant based milk industry. With the growing popularity due its benefit industry can creates its own identity beside it calling as Alternative milk.
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