Australia’s National

Science Agency

Growth opportunities
for Australian food
and agribusiness
Economic analysis and market sizing
About CSIRO Futures Copyright
CSIRO Futures is the strategic advisory arm of CSIRO. © Commonwealth Scientific and Industrial Research
We draw on our vast network of 5,000 science and Organisation 2019. To the extent permitted by law, all
technology experts, and 3,000 industry partners, to help rights are reserved and no part of this publication covered
Australian businesses and government organisations by copyright may be reproduced or copied in any form or
prepare for the future by answering the following questions: by any means except with the written permission of CSIRO.

• What emerging trends and technologies will re-shape

your sector in the coming decades? Citation
Please use the following details when citing this
• What opportunities are going to emerge from
report: Wynn, K., & Sebastian, B. (2019). Growth
these rapid changes?
opportunities for Australian food and agribusiness –
• What science and technology should you prioritise and Economic analysis and market sizing. CSIRO Futures.
invest in to maintain or create a competitive advantage?

We have a track record for helping senior decision Important disclaimer

makers tackle tough innovation challenges, from CSIRO advises that the information contained in this
identification through to implementation. Our range publication comprises general statements based on
of services include scenario planning, technology scientific research. The reader is advised and needs to
deep-dives, ideation workshops and strategic analysis be aware that such information may be incomplete or
reports. We work with businesses and government at unable to be used in any specific situation. No reliance
all stages along the innovation lifecycle, to achieve a or actions must therefore be made on that information
sustained competitive edge and continued growth. without seeking prior expert professional, scientific
and technical advice. To the extent permitted by
law, CSIRO (including its employees and consultants)
Acknowledgement excludes all liability to any person for any consequences,
CSIRO acknowledges the Traditional Owners of the including but not limited to all losses, damages, costs,
land, sea and waters, of the area that we live and expenses and any other compensation, arising directly
work on across Australia. We acknowledge their or indirectly from using this publication (in part or in
continuing connection to their culture and we pay whole) and any information or material contained in it.
our respects to their Elders past and present.
CSIRO is committed to providing web accessible
content wherever possible. If you are having
difficulties with accessing this document
please contact csiroenquiries@csiro.au.
Contents
1 Introduction.......................................................................................................................................................1
2 Valuations..........................................................................................................................................................3
2.1 Health and wellbeing products........................................................................................................................................ 10
2.1.1 Free-from and natural foods............................................................................................................................... 12
2.1.2 Fortified and functional....................................................................................................................................... 13
2.1.3 Vitamins and supplements...................................................................................................................................14
2.1.4 Personalised nutrition.......................................................................................................................................... 15
2.2 Sustainable solutions........................................................................................................................................................ 16
2.2.1 Alternative protein sources................................................................................................................................. 19
2.2.2 Organic waste conversion................................................................................................................................... 20
2.2.3 Sustainable packaging......................................................................................................................................... 21
2.3 Premium interactions........................................................................................................................................................ 22
2.3.1 Convenience without compromise..................................................................................................................... 24
2.3.2 Luxury and novel products.................................................................................................................................. 25
2.3.3 Experiences and tourism..................................................................................................................................... 26

3 Further reading............................................................................................................................................ 29
4 Methodology................................................................................................................................................. 33

i
1 Introduction
CSIRO produced the Food and Agribusiness Roadmap • Premium interactions: Products that yield a
(the roadmap) in July 2017 to support Australian food and premium price due to quality and convenience,
agribusiness in its transition to a collaborative, growth luxury status, novel attributes or their integration
oriented, high value-adding and differentiated sector. with food‑based experiences. Key opportunities
The roadmap discussed industry trends and opportunities, include convenience meals, luxury and novel
and identified key science, technology and business enablers products, agritourism and experiences.
for industry. In considering Australia’s competitive position
in this global market, three growth opportunity themes and This report builds on findings from the roadmap by
10 opportunities were identified as part of the roadmap: providing an outlook on the market size of the growth
opportunities described above. Economic analysis will
• Products for health and wellbeing: Foods and beverages focus primarily on domestic consumption and export
that provide specific health benefits above and beyond opportunities for Australia. For secondary markets such
basic nutrition, and target consumers who are either as sustainable packaging and organic waste conversion,
health conscious or have specific medical/dietary economic analysis will focus more on the value of waste
needs. Key opportunities include free-from and natural recovery and expected environmental savings.
foods, fortified and functional foods, vitamins and Figure 1 provides an outline of the Food & Agribusiness
supplements, and personalised nutrition. value chain and how opportunities identified in the
roadmap relate to it. Section 2 presents economic analysis
• Sustainable solutions: Environmentally and and commentary on each opportunity. Section 3 provides
socially responsible manufacturing processes and an outline of resources for further reading and Section 4
products, and the recovery of novel, value-added describes the research methodology used in this report.
products from waste streams. Key opportunities
include organic waste conversion, sustainable
packaging and alternative protein sources.

Global
Markets

Opportunities
• Free-from and natural products
Inputs and Food Manufacturers Retailers and Consumers • Fortified and functional foods
Raw Materials Producers and Processors Distributors
• Personalised nutrition
• Vitamins and supplements
• Alternative protein sources
• Convenience without
compromise
Waste • Luxury and novel products
Markets • Experiences and tourism

• Waste conversion
• Sustainable packaging

Figure 1: Simplified Value Chain of the Food and Agribusiness Industry

1
2 Valuations
In 2018, Australia’s gross domestic product (GDP) was There are several components that make up the total
$1.8 trillion.1 While the narrowly-defined Australian GDP figure, including domestic consumption, investment,
agriculture sector contributed 2.5% or $46B towards GDP government expenditure, exports and imports.
in 2018, the broader food and beverage manufacturing This report focuses on the domestic consumption and export
industry contributed another 1.5% or $27B,2 and the components of GDP as these are most relevant for Australian
food and beverage wholesaling, retailing and services businesses seeking to pursue growth and new markets.
contributed a further $65B or 3.6% to GDP.3 Combining These two components were estimated to contribute
these sectors, Australia’s food and agribusiness industry 11% or $187B towards Australia’s GDP in 2018. (Figure 2)
contributes approximately 7.6% or $138B towards GDP.
These can be compared with the contributions of other
large sectors such as mining (8%), building and construction
(8%) and electricity, gas and water supply (2.5%).4

a.
p.
.4%
$250B
+2
Industry is growing: Australian food and agribusiness,
$73B measured in terms of domestic consumption and exports,
(29%)
$187B +3.6% p.a. could reach $250B by 2030 if growth can continue at
$10B historical rates (~2.4% p.a.).
Export $52B $15B
Opportunity (28%)

$177B Sources of growth: Opportunities identified in the roadmap

Domestic $135B (71%) are projected to grow at around 3.6% per annum between
Consumption (72%) 2018-30, and may contribute to industry growth if domestic
and export opportunities are captured locally.

2018 2030 2030

Total Food and CSIRO Roadmap

Agribusiness Industry Opportunities

Figure 2: Australian Food and Agribusiness,

Domestic and Export Opportunity, 2018-20305

1 ABS (2018). 5206.0 Australian National Accounts: National Income, Expenditure and Product (Table 37).
2 Agriculture is measured in gross value-added terms under the ANZSIC code: Agriculture, Forestry and Fishing (A); while food and beverage manufacturing
refers to the ANZSIC code: Manufacturing (C); Food, Beverage & Tobacco Products. Source: ABS (2019). 5206.0 Australian National Accounts: National
Income, Expenditure and Product (Table 37).
3 Based on 2016-17 data due to availability of industry sub-division data. Source: ABS (2018). 8155.0 - Australian Industry, 2016-17. Economic Activity Survey.
4 ABS (2019). 5206.0 Australian National Accounts: National Income, Expenditure and Product (Table 37).
5 Estimates for total domestic consumption are based on Australian household expenditure trends in food, beverages and alcohol. This is broader than the
gross value of production in agriculture and includes expenditure items in food services (e.g. takeaway, restaurants, cafes). Exports refer to Australian food
and agribusiness exports in agriculture, fishery and forestry industries. Total values for the CSIRO Roadmap Opportunities are based on the summation of
individual market sizes of opportunities estimated in this report. The total sum is discounted by 30% to account for potential overlap in product and market
definitions. Estimates for sustainable packaging, waste conversion and international agritourism are also omitted from this calculation for comparability of
estimates to total industry values. Please see the methodology section for details on data sources and growth assumptions.

3
Opportunities in wellness, sustainability Demand from the Asia-Pacific is likely
and premium markets may contribute to underpin export growth in food
to industry growth and agribusiness

Australian domestic consumption and exports of food and Exports to the Asia-Pacific are likely to be an important
agribusiness products may reach $250B by 2030 if growth source of growth for businesses in wellness, sustainability
continues at historical rates (Figure 2). CSIRO analysis and luxury markets. Australian food and agribusiness
estimates that the opportunity for health and wellness exports to China, Japan, Indonesia, Korea, India and
foods, sustainable solutions and premium segments, as Vietnam has grown from 42% of total food exports in
identified in the roadmap, to grow at around 3.6% per 1997 to 57% in 2017 (Figure 3). These trends are likely
annum to a value of $25B by 2030. These markets are likely to continue, particularly with exports to China, India,
to be important sources of growth for Australian food and Indonesia, Philippines and Vietnam, based on projected
agribusiness over the next decade if industry can capture income per capita and population growth over the next
the opportunities. This can be compared to the National five years (Figure 4). Australia’s track record for quality,
Farmers’ Federation strategic target to reach $100B in safety and value in food and agribusiness, as well as current
farm gate output (defined as gross value of Australian farm and incoming free-trade agreements, should support its
production) by 2030, which similarly expects a growth rate competitiveness in global markets.
of approximately 4% per annum.6

100% 100% 100% Real GDP Per Capita Growth (CAGR)

7% 10
13%

25% Yemen
8
23%
20% Ethopia India
6 Bangladesh
10% Vietnam China
5% Philippines
5% Indonesia
5% 7% 4
2% 6%
1% 6% Pakistan

5% 2
4%

0
58%
53%
-2
43%

-4

-6
-4 0 4 8 12 16 20 24 28 88 92
1997 2007 2017
Population Growth (M)
China Japan Indonesia Republic of Korea
India Vietnam Other High growth Low growth

Figure 3: Australian Food & Agribusiness Exports Figure 4: Income and Population Growth Forecast by Country,
by Selected Countries, 1997-20177 2018-20238

6 National Farmer’s Federation & KPMG (2018). Talking 2030 – Growing Agriculture into a $100 Billion Industry.
7 DFAT (2018). Australia’s Merchandise Exports and Imports.
8 International Monetary Fund (2018). World Economic Outlook Database.

4 Growth opportunities for Australian food and agribusiness

5
 Common drivers

Global growth: Population growth

and real income per capita growth in
Australia and key export markets will drive
demand for food and agribusiness.
Forecast Annual Growth 2018–30 (%)
20.0
Emerging industries Changing preferences: Consumers seek
19.5 healthy and accessible foods that are
Personalised Nutrition
naturally, ethically and sustainably sourced.
5.0 Alternative Proteins

Agritourism
4.5 Brand and capability: Industry’s reputation for
clean and green, productivity in agribusiness,
4.0
Free-From and Natural
and integration with global markets
3.5 should support conditions for growth.
Vitamins and Supplements
Fortified and Functional
3.0 Convenience Meals Considerations

2.5 Luxury & Novel

Industry maturity: Emerging industries should
F&A historical industry Maturing industries experience relatively higher growth while
2.0
growth rate (~2.4%) maturing industries are more likely to converge
1.5 towards total industry growth averages.

1.0
0 2 4 6 8 10
Substitutes: Growth outlook is sensitive to
2030 Domestic + Export Opportunity ($B) relative changes in consumer preferences over
time (e.g. convenience meals vs fast foods).
Health and Wellness Sustainable Solutions Luxury Markets

Competition and innovation: Capturing growth

and global market share is dependent on the
supply and competitiveness of local industry.

Figure 5: CSIRO Food and Agribusiness Roadmap,

Estimated Domestic and Export Opportunity by 20309

9 CSIRO Futures (2019). See Section 4 for methodology.

6 Growth opportunities for Australian food and agribusiness

Trends in consumer preferences Important analysis notes
and industry maturity will influence It should be highlighted that 2018 to 2030 estimates of
opportunity size and growth domestic and export opportunities in this report are based
on underlying domestic and global demand-side drivers.
Opportunities within wellness, sustainability and premium The opportunity size for exports, where data is limited,
segments are projected to grow over the next decade also assumes that industry can capture market share of each
but may vary in magnitude due to trends in consumer global opportunity consistent with its historical average
preferences and/or differences in industry maturity market share across food and agribusiness in general.
(Figure 5). Strong demand for alternative proteins for
instance is expected to continue with rising consumer Opportunity sizes are not necessarily reflective of growth
preference for sustainable and ethical foods, and strong or realised value under business as usual. Attractive growth
population and income growth in key export markets with prospects are likely to attract significant competition
large vegetarian populations such as India. overseas. Hence, it is possible that some or much of
domestic consumption for each opportunity are met
Similarly, agritourism may be an increasingly important
by overseas imports. Likewise, the export opportunity
source of economic activity for rural and regional
may not be realised if local industry supply does not
Australia as international and local visitor numbers
exist or compete strongly with competition overseas.
grow. More mature industries such as vitamins and
Conversely, it is also possible that the value captured by
supplements, organic and free-from foods, and fortified
local industry exceeds what has been projected in this
and functional foods could experience moderate growth
report. This could occur for instance if demand is greater
as consumer demand for natural and healthy foods
than otherwise thought, or if Australian industry enjoys
increases, and if export demand from Asia continues.
an even stronger market share of the opportunity (due to
The outlook for other opportunities is slightly more superior product quality, innovation, cost advantages etc.).
conservative. Demand for convenience meals for
Comparing estimates with other public reports should
example will depend on how industry competes with
also be undertaken with care as estimates could vary in
alternatives such as fast-food, food delivery services
definitions, scope and methodology selected for each
and local eateries. For emerging opportunities such
opportunity. Similarly, while efforts were made to keep
as personalised nutrition, research and development
each opportunity mutually exclusive, estimates in this
rather than commercialisation is likely to characterise
report should be aggregated with caution due to potential
near-term spending. Personalised nutrition may grow
overlap. Finally, net environmental savings estimated in
into a significant opportunity by 2030 or beyond as
this report are not necessarily exhaustive. It is intended
its efficacy, affordability and accessibility improves.
to provide an indication of the positive externalities
Sustainable solutions in the form of organic waste (in orders of magnitude) that various opportunities
conversion and sustainable packaging will increase may create. See Section 4 for further detail on the
economic activity in secondary waste markets, deliver methodology and assumptions used in this report.
benefits across the value chain through new efficiencies,
and meet consumer expectations for sustainable and
ethical products (Table 1), see page 8. The opportunities
have the potential to deliver significant environmental
savings for Australia through net reductions in emissions,
water and electricity usage, and land impacts.

7
Table 1: CSIRO Food and Agribusiness Roadmap - Estimated Domestic, Export and Environmental Opportunity by 2030

DOMESTIC EXPORT
F&A ROADMAP CONSUMPTION OPPORTUNITY
OPPORTUNITIES 2030 $B 2030 $B DESCRIPTION

Free-From & Natural 2.6 1.6 Markets include free-from gluten, lactose, allergens, dairy and
meat products, as well as organic foods and beverages.

Fortified & Functional 5.5 4.2 Food and beverage products that contain added health
ingredients and nutrients for intended nutritional benefits.

Vitamins & Supplements 2.0 3.2 Products to enhance or supplement an individual’s dietary or
nutritional needs. This includes protein powders, energy boosters
and workout products.

Personalised Nutrition 0.6 NA Technologies that provide bespoke nutrition solutions unique
to individual’s needs. Examples includes phenotype nutrition
diagnostics and personalised nutrition e-tools.

Alternative Proteins 4.1 2.5 Foods that are consumed as substitutes to meat as part of one’s
diet. Potential products include plant proteins and emerging
opportunities such as insect-based ingredients.

Convenience Meals 3.7 1.6 Pre-prepared or frozen packaged meals sold by supermarkets,
grocery stores and other home delivery ready meal services.

Luxury & Novel Products 1.1 1.7 Food products purchased at a premium for desired characteristics
such as brand, quality or innovation. Examples include luxury
wines and high-end truffles.

Agri-tourism10 1.9 3.6 Experiences that allow visitors to experience regional Australia
and the agribusiness value chain. This includes tours and cuisines
at farms, wineries and farm-gates.

WHOLESALE ENVIRONMENTAL
F&A ROADMAP REVENUE SAVINGS
OPPORTUNITIES 203011 2030 DESCRIPTION

Organic Waste 0.4 0.6 Technologies at the primary production and processing stage
Conversion that generate useful inputs from organic waste streams. Examples
include extraction of nutrients from plant waste.

Sustainable Packaging 0.9 1.7 Packaging materials that have lower emission, resource and
ecological impacts than standard packaging materials. Examples
include bioplastics and biodegradable packaging.

Alternative Proteins See table above 5.4 Foods that are consumed as substitutes to meat as part of one’s
diet. Potential products include plant proteins and emerging
opportunities such as insect-based ingredients.

10 Agri-tourism estimates count expenditure in food, drinks and accommodation. It excludes broader items such as airfares and travel. Please see Section 2.3.3
for additional information and estimates.
11 This refers to the wholesale market value of secondary materials recovered through organic waste conversion and sustainable packaging.

8 Growth opportunities for Australian food and agribusiness

What has changed since the roadmap?

The 2017 roadmap focused largely on high growth Investment in food provenance
opportunities in final goods markets for the Australian and traceability
food and agribusiness industry. Since the report’s release,
Food provenance and traceability is expected to become
several trends have gained further interest from industry,
an increasing priority for industry and government over
governments and consumers, both domestically and
the next few years. Food fraud in the form of product
globally. These include growth opportunities within
adulteration, substitution, diversion, misrepresentation
Australia’s supply chain, investment in food provenance
and/or identify theft will create safety risks to consumers
and traceability, and the industry’s transition towards the
and reputation risk to the Australian industry.14 The
circular economy. While this report focuses on quantifying
economic cost of food fraud to Australian agri-food exports
the opportunities identified in the 2017 roadmap, brief
was estimated at $2.3B in 2017.15 This risk will increase with
commentary on these trends are summarised below.
global industry growth. Since product quality, trust and
security is critical to Australia’s reputation and competitive
Growth in Australia’s food supply chain advantage, industry is likely to invest more heavily in digital
and chemical identifier technologies, sensor technologies
Rising global food demand should translate to growth
and distributed ledger technologies over the next 5-10 years
opportunities across Australia’s food and agribusiness
to manage risks.16 Improved food system traceability will
supply chain. Australian business research and development
expenditure in agriculture and food product manufacturing help to validate sourcing claims; meet consumer demand
for instance has grown from $406M in 2005-06 to for transparency in food production; enhance the ability of
$723M in 2015-16.12 Increased demand for personalised government departments and industry to identify, respond
and prevent food safety issues; and create opportunities
nutrition or vitamins may increase business investment
to optimise supply-chains and minimise food loss.17
in research and product development as industry
looks for new innovations to meet changing consumer
preferences. Significant growth opportunities are also Transition towards a circular economy
expected in primary production, noting that the gross
Economies across the world will have to use their
value of Australian agricultural commodities produced
productive resources more effectively and sustainably to
grew from $43B in 2007-08 to $59B in 2017-18.13 Growth
manage the risks of climate change, resource scarcity and
in global food demand will increase demand for primary
broader supply chain pressures. Growth opportunities in
production, while demand in high growth markets such
organic waste conversion and sustainable packaging (as
as fortified and functional foods may create new demand
discussed in the roadmap and this report) should attract
and applications for raw ingredients. These opportunities
greater investment as businesses seek better mechanisms
will contribute to overall industry growth and provide a
to reuse, recycle, reprocess and recover waste and
source of diversification for the Australian supply chain.
secondary materials for production. It is estimated that
achieving circularity could yield $489B USD in net material
cost savings across global packaged food, fresh food and
beverages industries annually.18 Achieving circularity in
production would improve environmental productivity
through improved utilisation of waste and bi-products.

12 ABS (2017). 8104.0 - Research and Experimental Development, Businesses, Australia 2015-16.
13 ABS (2019). Value of Agricultural Commodities Produced, Australia, 2017-18 (Table 1).
14 FIAL (2017). Counting the Cost: Lost Australian Food and Wine Export Sales Due to Fraud.
15 FIAL (2017). Counting the Cost: Lost Australian Food and Wine Export Sales Due to Fraud.
16 World Economic Forum (2019). Innovation with a Purpose: Improving Traceability in Food Value Chains Through Technology Innovations.
17 World Economic Forum (2019). Innovation with a Purpose: Improving Traceability in Food Value Chains Through Technology Innovations.
18 WEF (2014). Towards the Circular Economy: Accelerating the Scale-Up across Global Supply Chains.

9
2.1 Health and wellbeing products
Health and wellbeing products refer to foods and beverages
that provide specific health benefits above and beyond basic
nutrition. Products typically target consumers who are health
conscious and/or have specific medical/dietary needs.

Demand for health and wellbeing foods and beverages is Today, more than 40% of Australians identify eating fresh
expected to grow with ageing and growing populations and fruit and vegetables as a top food priority, and around 24%
changing consumer preferences. Australia’s population is identify reductions in sugar and fat intake, and eating
forecast to grow from 25M persons in 2018 to 38M by 2050 healthier snacks as top health priorities.23 Growth in real
(1.3% per annum),19 while global population is forecast to expenditure per person in health and wellbeing has
grow from 7.6B persons in 2018 to 9.7B by 2050 grown at 1.7% per annum, a strong signal of society’s
(0.8% per annum). 20 Populations will also experience investment and emphasis in health and wellbeing.24
relatively greater ageing, with the projected number of These factors combined reflect consumer appetite and
persons aged 60 years and above expected to grow willingness to pay for health and wellbeing products.
from 0.9B persons in 2015 to 2.1B persons by 2050
(2.5% per annum).21 Consumer preferences for healthy foods
and beverages should improve as they become increasingly
knowledgeable and conscious of their wellbeing, and as
preventative healthcare measures receive increased priority.22

19 ABS (2013). 3222.0 Population Projections, Australia (Series B).

20 United Nations Department of Economic and Social Affairs (2015). World Population Projected to Reach 9.7 Billion by 2050;
The World Counts (2018). The Population of the World Today.
21 United Nations (2017). Global Issues - Ageing.
22 CSIRO (2018). Future of Health Report.
23 Australian Institute of food Safety (2016). Food Safety and Consumer Trends 2016.
24 AIHW (2016). Health expenditure Australia, 2015-16.

10 Growth opportunities for Australian food and agribusiness

However, global demand for Australian health and The following sub-sections present market analysis
wellbeing products are also dependent on market and and commentary on the following opportunities:
international trade factors, and how local industry fosters 1. Free-from and natural foods
its competitive advantage over time. Free trade agreements 2. Fortified and functional foods
such as the China-Australia Free Trade Agreement and the 3. Vitamins and supplements
Indonesia-Australia Comprehensive Economic Partnership 4. Personalised nutrition
Agreement should support export demand.25 Furthermore,
trends towards stricter regulation on international food
safety and quality, such as China’s restrictions on infant
formula,26 should increase barriers to entry and protect the
position of high-quality food producers and manufacturers
in Australia. However, competitive advantages over the
long term will depend on how Australian producers
deliver better food safety and quality, nutrition and
functional benefits, superior taste and freshness,
and convenience relative to international competitors.27

25 Department of Foreign Affairs and Trade (2018). Indonesia-Australia Comprehensive Economic Partnership Agreement: Outcomes.
26 Bloomberg News (2018). China removes 1,400 baby formula products from shelves. Accessed Jul 2018.
27 CSIRO (2017). Food and Agribusiness Roadmap; Austrade (2018). Food and Beverages to China.

11
2.1.1 Free-from and natural foods Demand for alternatives to milk, eggs, peanut, tree nuts,
sesame, soy, fish, shellfish and wheat should be strong
Free-from foods refer to products that are free from as 90% of food allergic reactions are attributed to these
gluten, lactose, allergens, dairy and/or meat; while nine food groups.31 Emergence of future products such as
natural and organic products encompass packaged foods natural sweeteners, natural preservatives and tolerable
and beverages that have been produced, processed and alternatives to lactose, gluten and allergenic free products
marketed in accordance with international standards may also contribute to this growth.32 The rise in demand
and certified as ‘organic’ by appropriate authorities. for natural, sustainable and ethically sourced foods, as well
as Australian industry’s global reputation for ‘clean and
Demand for free-from and natural foods is expected to
green’ food,33 should support growth in this opportunity.
continue with global population growth and higher rates of
food intolerances and avoidance. CSIRO analysis estimates
the domestic consumption and export opportunity for
free-from and natural foods to reach $4.2B by 2030 at
around 4% per annum growth.28 Key markets include soy
milk and milk alternatives, gluten-free bread and lactose-
free milk products.29 This reflects changing consumer
preferences and dietary requirements, where around
12% of Australians avoid wheat and/or gluten, and dairy/
lactose due to intolerances or dietary preferences.30

a.
p. $4.2B
%
+4
Preferences for naturally, sustainably and
ethically sourced foods, and Australia’s brand for
$1.6B
(38%) ‘clean-and green’ should contribute to demand for
Australian free-from and/or natural alternatives.
$2.7B

Export $0.9B
Opportunity (33%)

$2.6B Incidence of food intolerance and avoidance is

(62%)
on the rise, due in part to population growth.
Domestic $1.8B
Consumption (67%) 12% of Australians avoid wheat, gluten, dairy and/or
lactose due to intolerances or dietary preferences.

2018 2030

28 CSIRO Futures (2019). See Section 4 for methodology.

29 Euro Monitor (2018). Free-From and Organic Foods and Beverages.
30 CSIRO Health and Biosecurity (2016). CSIRO Healthy Diet Score 2016;
Note also for instance that the rate of food anaphylaxis admissions observed in Australia has also risen from 2 to 8.2 per 100K population between 1998/99
and 2011/12 respectively and reflect the rising prevalence of food allergies. Source: Tang, M., & Mullins, R. (2017). Food allergy: Is prevalence increasing?
Internal Medicine Journal, 47(3), 256-261.
31 ASCIA (2016). Food allergy, ASCIA Information for Patients, Consumers and Carers.
Broader demand is reflected in rising willingness to pay for free-from and natural foods. A recent study in Australia found that almost 70% of consumers are
somewhat or highly willing to pay a premium (20% or more than the average price) for products that contain all natural and/or organic ingredients. Source:
Nielsen (2017). Premium Potential: Grocery Categories Pacific Consumers Are Willing to Spend More On.
32 CSIRO (2017). Food and Agribusiness Roadmap.
33 Ibid.

12 Growth opportunities for Australian food and agribusiness

2.1.2 Fortified and functional Growing interest in sports nutrition and performance for
instance has increased demand for whey protein, energy
Fortified and functional foods refer to packaged food bars and related fortified/functional foods. However, the
and beverages that contain added health ingredients export opportunity is very much dependent on continued
and/or nutrients, where enhancements are intended demand from key overseas markets such fortified milk
to produce a nutritional benefit. Examples include formula to China and South East Asia. While Chinese
probiotics and omega-3 oils added to yoghurt and milk, consumers value Australia’s reputation for quality and
and antioxidant rich breads, cereals and beverages. food safety,36 Beijing’s announcement to increase local
production and supply of baby formula may translate
Market demand for fortified and functional foods is
to increased competition for Australian industry in the
expected to continue with global population growth
medium term.37 Emerging products such as high protein
and changes in consumer preferences. The industry is
yoghurts, omega-3 enriched grains and cereals higher
characterised by a diverse product mix, which range from
resistance starch may create new growth channels for this
foods for infant and child development, to nutritious
market over the next few years.38 Product development
meals for elderly digestive and cardiovascular health.
will also be affected by changes to mandatory and
Key segments in the domestic and international market
voluntary fortification standards set by domestic and
include functional milk formula, fortified breakfast cereals,
overseas regulatory bodies. For example, Australian millers
probiotic yoghurt and sports drinks.34 The domestic
must fortify wheat flour for bread-making with folic
consumption opportunity for fortified and functional
acid to help promote healthy growth and development,
products is expected to reach $5.5B by 2030, while the
particularly in babies during early pregnancy.39
opportunity for exports is expected to reach $4.2B.35
Lifestyle trends will shape consumer preferences.

Australia’s brand for ‘clean and green’ should

a.
p. $9.7B support growth in overseas markets, local industry
%
+3 could face greater competition in key export
segments such as fortified infant milk formula.
$4.2B
(43%)
$6.7B
Lifestyle trends will shape changes in consumer
preferences. Growth in demand for sports
Export $2.7B
Opportunity (40%) drinks and whey proteins reflect trends in
active living and sports performance.

$5.5B
(57%) Global food standards and regulation will
$4.0B
Domestic
Consumption (60%) influence growth. Changes in mandatory or
voluntary requirements to food fortification
would affect product and market development.
2018 2030

34 Euro Monitor (2018). Fortified & Functional Foods and Beverages.

35 CSIRO Futures (2019). See Section 4 for methodology.
36 Dairy Australia (2018). Market Brief China – October 2018.
37 Smith, M., and Thomson, J. (2019). China to Wean Middle Classes Off Foreign Infant Formula. The Australia Financial Review.
38 CSIRO (2017). Food and Agribusiness Roadmap.
39 FSANZ (2016). Folic Acid Fortification.

13
2.1.3 Vitamins and supplements With more than 40,000 Daigous operating across
Australia,41 how the Chinese government responds to
Vitamins and supplements describe manufactured Daigou sales 42 and how local businesses adapt their retail
pills, capsules, tablets and/or liquids designed to and e-commerce strategies to global consumers may affect
supplement an individual’s dietary or nutritional needs. near term growth in this export opportunity. For industry
Examples include health and wellbeing products in to meet consumer needs and compete effectively with low-
the form of pills, oils, tablets and powdered mixes. cost producers overseas, continued investment in evidence,
innovation and product development is important. Similarly,
Vitamins and supplements are a growing opportunity over
supplement and ingredient provenance and traceability
the next decade. Consumer health and wellness needs
will be important as the risk of product fraud can threaten
are wide-ranging. Current segments include vitamins and
the health and wellness of consumers, and the reputation
supplements for eye, gut, mobility and joint health, and
of local industry. Policy, regulation and education will
comes in various forms such as pills, liquids or powdered
also have important roles in guiding consumption
mixes. CSIRO analysis estimates that the opportunity
and industry growth in vitamins and supplements.
for vitamins and supplements may reach $5.2B by 2030
under current growth trends. Estimates are predicated on
continued demand for vitamins and health supplements
from Asia. Strong demand from China for authentic and
safe supplements has led to growth in Australia’s ‘Daigou’
network, where personal shoppers buy on behalf of
overseas consumers for resale in their home country.40

a.
p. $5.2B
%
+3

A significant export opportunity if demand

$3.5B
from Asia continues, and Australian industry can
$3.2B
(62%) maintain its leading reputation for quality, safety
and efficacy in vitamins and supplements.
Export
$2.0B
Opportunity (57%)
(incl. Daigou sales)
Evidence, innovation and traceability is important to
industry’s competitive advantage as competition with low
$2.0B
Domestic $1.5B (38%)
cost producers and the threat of counterfeit increases.
Consumption (43%)

2018 2030

40 Bloomberg News (2019). What’s ‘Daigou’ and What’s It to Gucci and Beijing?
41 Nielsen (2017). The Daigou Effect: How Brands Can Breakdown Chinese Borders and Drive Growth.
42 Bloomberg News (2019). What’s ‘Daigou’ and What’s It to Gucci and Beijing?

14 Growth opportunities for Australian food and agribusiness

2.1.4 Personalised nutrition However, current trends in overseas markets suggest that
high degrees of product and price differentiation will
Personalised nutrition describes the provision of likely exist to meet the diverse needs of each consumer.
targeted nutrition related advice, products and services For instance, personalised nutrition offerings in the
to individuals based on their personal characteristics. United States range from DIY home-test kits ($40 USD)
Emerging products and services include phenotype, to full program suites that combine genetics testing with
genotype and related diagnostic testing to identify personalised meal planning and coaching ($3500 USD p.a.).46,47
nutritional needs; personalised nutrition e-tools that draw However, realised growth and market share in Australia will
on mobile methods and real time sensor technologies. be sensitive to changes in willingness to pay and consumer
adoption rates. This includes the rate that Australia imports
Domestic demand for personalised nutrition is expected to
or develops such technologies.48 Other factors include how
gain significant momentum over the next decade.43 While the
service providers deliver and market personalised benefits;
market for non-personalised nutrition services is expected to
manage service effectiveness and information control;
grow at 2% per annum, driven largely by growth in population
and manage privacy risk, information intrusiveness and
levels and real health expenditure per capita, CSIRO analysis
their perceived integrity to consumers.49 Estimates in this
estimates domestic expenditure on personalised nutrition
report are also conservative as it describes expenditure
services and solutions to reach $550M by 2030 as consumer
on services and solutions by dietitians, nutritionists
awareness improves and the price of services fall.44 As an
and related specialists. Weight-loss programs, gyms
emerging opportunity, near term investment is likely to
and fitness centres, private health insurance providers,
focus more on research and development, proof-of-concept
grocery stores and specialty stores are also expected to be
and clinical trials than on commercialisation. International
important channels for personalised nutrition solutions.50
research has found that about 30% of consumers have
expressed a willingness to pay for personalised nutrition
services at an average premium of 50% relative to
non-personalised nutrition products and services.45

a. Growth will depend on how and when industry develops and

p.
9 % commercialises emerging science and innovation, and manages
+1
consumer concerns such as data privacy and service effectiveness.

Consumers exhibit high willingness to pay for personalised nutrition.

$550M Research found about 30% of consumers were willing to pay a premium for
personalised nutrition services over generic nutrition products / services.

$66M
Industry is characterised by a high degree of product
and price differentiation as businesses try to meet diverse
2018 2030 consumer needs. Products may vary from DIY home-test kits
Personalised nutrition, to personalised meal planning and coaching programs.
domestic annual retail sales

43 CSIRO (2017). Food and Agribusiness Roadmap; CSIRO (2018). Food for Health, Trends and Opportunities in Health and Wellness for the ASEAN Region.
44 Estimates have also excluded the potential export opportunity due lack of reliable data as an early-stage opportunity. The export potential for DIY home-test
kits for example might also be significant over the next decade and beyond. Source: CSIRO Futures (2019). See Section 3 for methodology.
45 Fischer, A., Berezowska, A., Van der Lans, I., Ronteltap, A., Rankin, A., Kuznesof, S., . . . Frewer, L. (2016). Willingness to pay for personalised nutrition across
Europe. The European Journal of Public Health, 26(4), 640-644.
46 LEK (2017). The Customized Diet: Opportunities in Next-Generation Personalised Nutrition.
47 For comparison, standard consultation costs with nutritionists in Australia can vary from $40 to $200+ per visit.
48 For example, CSIRO is developing a kit to predict food preferences based on someone’s genes. Source: Noakes, M., Cole, C. (2017). The future of food.
49 Berezowska, A., Fischer, A., Ronteltap, R., Lans, H., & Trijp, A. (2015). Consumer adoption of personalised nutrition services from the perspective of a risk–
benefit trade-off. Genes & Nutrition, 10(6), 1-14.
50 LEK (2017). The Customized Diet: Opportunities in Next-Generation Personalised Nutrition.

15
2.2 Sustainable solutions
Sustainable solutions describe environmentally and socially
responsible manufacturing processes and products, and the
recovery of novel, value-added products from waste streams.

Social, environmental and economic pressures are Internationally, governments and intergovernmental
expected to increase demand for sustainable products agencies are responding to such risks with targets and
and solutions from food and agribusiness industries initiatives to incentivise sustainable solutions. For instance,
over the next few decades. Australia generated the United Nation’s Sustainable Development Goals has
67M tonnes of waste in 2016-17, representing an set targets to halve per capita global food waste and
increase of 6% (3.9M tonnes) over an 11-year period.51 substantially reduce waste generation through prevention,
Australia also records a higher material footprint per reduction, recycling and reuse by 2030.54 Countries such
capita relative to other trade intensive economies such as as Sweden have since achieved a household recycling
China and the United States.52 This reflects the country’s rate of 99% and a renewable energy usage rate of 54%.55
higher use of biomass, construction minerals, fossil fuels Likewise, the Australian Government has committed
and metal ores for economic activities. 53 Such trends to reductions in waste production, transition towards
have increased the threat of climate change, resource sustainable packaging and related sustainable solutions.
scarcity and environmental productivity degradation.

51 Department of the Environment and Energy (2018). National Waste Report.

52 PNAS (2015). The Material Footprint of Nations.
53 PNAS (2015). The Material Footprint of Nations.
54 UN (2018). The Sustainable Development Goals Report 2018.
55 Sweden Institute (2018). Sweden Society Facts.

16 Growth opportunities for Australian food and agribusiness

17
However, the uptake of sustainable solutions in food This might be in the form of new productivity gains,
and agribusiness industries in Australia will depend improved supply chain efficiencies or through increased
also on various supply side factors such as the adoption brand equity due to more environmentally or ethically
rate of new technologies. Firms are more likely to pursue friendly practices. It should be noted that annual food
sustainable solutions if there is clear national or global and beverage capital investment has since fallen from
consumer demand. Improving consumer awareness of almost $3.5B in 2007-08 to $2.9B in 2016-17 in real
and desires to address global challenges such as climate terms, reflecting tougher trading conditions, economic
change should contribute supply-side developments. pressures and industry consolidations underway.57
A global survey conducted by Nielsen found that
66% of consumers around the world were willing to The following sub-sections present market analysis
pay more for sustainable brands in 2015, compared and commentary on the following opportunities:
to 50% of consumers in 2013.56 Similarly, industry 1. Alternative protein sources
incentives to adopt and commercialise more sustainable 2. Organic waste conversion
processes should improve if new technologies can 3. Sustainable packaging
provide net benefits and savings to businesses.

56 Nielsen (2015). The Sustainability Imperative – New Insights on Consumer Expectations.

57 Australian Food & Grocery Council (2018). State of the Industry 2018 – Resilience through Challenge.

18 Growth opportunities for Australian food and agribusiness

2.2.1 Alternative protein sources Research estimates that meat and dairy production
accounts for 60% of greenhouse gas emissions produced
Alternative proteins describe foods that are consumed by agriculture, and that even low-impact meat and dairy
as substitutes to meat and seafood as part of an products are likely to cause more environmental harm than
individual’s diet. This include plant proteins such as sustainably farmed vegetables.62 CSIRO analysis estimates
soy and pea, hemp seed and ancient grains such as that consumption of alternative proteins may create an
quinoa, and emerging products such as insect-based additional $5.4B in carbon emission and water savings
ingredients and meat products produced in vitro. annually by 2030.63 Although not quantified in this report,
significant savings in net land use could also be expected
Ethical, cultural, religious, environmental and dietary
from increased consumption of alternative proteins
factors are expected to increase consumer demand for
over traditional livestock products. In 2016-17, Australian
alternative protein sources over the next decade. The
livestock products required twelve times more land for
percentage of Australians that are vegetarian or eat
production than crop products per dollar of commodity
predominantly vegetarian foods has risen from 10% in 2012
produced.64 Noting that around half of marginal agricultural
to 11% in 2016.58, 59 Similarly, other major export partners
land in Australia’s intensive use zone can be used profitably
exhibit significant demand for alternative proteins.
for carbon sequestered forests, the Australian National
For instance, about 30% of India’s population are estimated
Outlook 2019 identified carbon plantations and farming
to be vegetarian.60 Based on current demographic and
as a significant environmental and economic opportunity
consumer trends, CSIRO analysis estimates that the
(in the form of sequestration exports) for Australia.65
domestic and export opportunity for alternative proteins
Land use saved through alternative proteins could help
could reach $4.1B and $2.5B respectively by 2030.61
to open such opportunities by 2030 or beyond.66

a.
p. $11.9B Large savings to emissions, water and land use.
+ 5%
For instance, livestock products require ~12x more land
than crop products per dollar of commodity produced.
$5.4B
(45%)

$6.8B Strong demand from growing export markets with large

vegetarian populations. ~30% of India’s population for
Environmental $3.1B $2.5B instance are estimated to be predominantly vegetarian.
Savings (45%) (21%)

Export $1.5B
Opportunity (22%) $4.1B Local demand for ethically and sustainably sourced proteins
Domestic (34%)
$2.2B is on the rise. Australia’s population that eats predominantly
Consumption (33%)
vegetarian has risen from 10 to 11% over the last 4 years.
2018 2030

58 Roy Morgan (2016). The Slow but Steady Rise of Vegetarianism in Australia.
59 Similar trends are expected across advanced economies globally, where countries in the OECD forecast almost zero growth in meat consumption per capita
over the next decade. Source: OECD (2018). Meat Consumption, OECD Data.
60 Based on average of three government surveys, including the National Family Health Survey. Source: Biswas, S. (2018). The Myth of the Indian Vegetarian
Nation. BBC News.
61 CSIRO Futures (2019). See Section 4 for methodology. Results are potentially conservative in that estimates might understate demand from a segment of
consumers who choose to eat more alternative proteins in place of meat but are not necessarily vegetarian.
62 FIAL (2018). Protein Market: Size of the Prize Analysis for Australia; Poore, J., & Nemecek, T. (2018). Reducing food’s environmental impacts through
producers and consumers. Science, 360(6392), 987-992.
63 CSIRO Futures (2019). See Section 4 for methodology.
64 ABS (2018). 4627.0 - Land Management and Farming in Australia, 2016-17; ABS (2018). 7503.0 - Value of Agricultural Commodities Produced, 2016-17.
65 CSIRO (2019). Australia National Outlook 2019.
66 This analysis excludes alternative proteins for animal feedstock as well which is a potentially significant opportunity, noting that revenue from agriculture
and aquaculture animal feed production was estimated at $2.1B in 2018. It also excludes long term health benefits (and savings) that consumers might
derive from alternative proteins, noting that around 40% of protein consumption today is obtained via processed meats, fast food and confectionaries.
Sources: IBISWorld (2018). Farm Animal Feed Production in Australia. Accessed 02/07/2019; CSIRO Health and Biosecurity (2018). Protein Balance, New
Concepts for Protein in Weight Management.

19
2.2.2 Organic waste conversion This would contribute to the Australian Government’s
National Food Waste Strategy to halve food waste by
Waste conversion describes practices and technologies 2030,69 and create annual net carbon emission, electricity
at the primary production stage and processing stage to and water savings in the range of $600M by 2030.
generate useful products and inputs from organic waste This analysis also excludes the potential impact on other
streams for agriculture and food manufacturing industries. organic waste producing sectors, noting that municipalities
Future products are likely to include higher value uses for and other commercial and industrial sectors accounted for
crop residue; extraction of nutraceutical ingredients from an additional 13M tonnes of organic waste in 2016-17.70
plant waste; extraction of immunity boosting compounds While waste conversion has potential to generate
from bovine blood for use in supplements and fortified significant economic and environmental benefits, industry
ingredients; and closed loop production processes where adoption rates will depend significantly on technology
waste streams are reutilised in other production processes. costs, market developments and behavioural changes.
To garner continued investment in waste conversion,
Greater adoption of organic waste conversion processes
new technologies and processes will need to deliver lower
and technologies within the agriculture and food
costs (and other efficiency and productivity gains) across
manufacturing industry has potential to generate strong
the waste extraction, processing, transportation and/or
economic and environmental benefits. The Australian
related stages.71 Further development of secondary markets
agriculture and fisheries currently produce about
to facilitate business improvements in waste conversion
16M tonnes of organic waste annually.67 While about
and/or facilitate better trading of recyclable materials might
half of organic waste produced today is recycled,
contribute to adoption.72 This is also dependent on policy
CSIRO analysis estimates that halving landfilled organic
support and expectations from consumers and shareholders
waste through conversion by 2030 could recover
to transition behaviour towards more sustainable solutions.
$400M in wholesale revenue of secondary materials. 68

National target to halve Australian food waste by 2030

should support investment and opportunity growth.
a.
p. Currently, only about half of organic waste created
% $1.0B
+4 is recycled annually.

$0.6B Significant potential to realise net environmental

$0.6B (58%)
savings in carbon emission, electricity and
water use by 2030 through increased recovery,
Net $0.4B
Environmental reprocessing and reuse of organic waste.
(59%)
Savings

$0.4B
Wholesale Value of $0.3B (42%) Continued innovation, investment, policy and
Secondary Materials (41%) behavioural change will be important to realising
benefits for society, industry and the environment.
2018 2030

67 Material categories here include food organics, fisheries organics, garden organics, biosolids, manure, timber, bagasse, cotton gin trash and other food-
derived wastes. Source: Department of Environment and Energy (2018). National Waste Report 2018.
68 CSIRO Futures (2019). See Section 4 for methodology.
69 Department of Environment (2017). National Food Waste Strategy, Halving Australia’s Food Waste by 2030.
70 Department of Environment and Energy (2018). National Waste Report 2018.
71 Hunt, D. (2018). An Investigation into Waste Management in Australian Production Nurseries; Department of Environment (2017). National Food Waste
Strategy, Halving Australia’s Food Waste by 2030.
72 Ibid

20 Growth opportunities for Australian food and agribusiness

2.2.3 Sustainable packaging Results also exclude potential gains from technological
spill over into other waste-generating sectors and
Sustainable packaging describes the use of packaging improved environmental conditions for global fauna and
materials that have relatively lower emission, resource flora. Only 10% of global plastic packaging produced
and ecological impacts than standard or traditional annually are recycled as secondary materials into similar
packaging materials. Current and emerging products or lower-value applications.75 Industry adoption rates
include bioplastics and biodegradable packaging. will depend on technology costs, market developments
and behavioural changes. For instance, while global
Adoption of sustainable packaging can deliver strong
production capacities for bioplastics is expected to
economic and environmental benefits to Australia. The
grow from 2.1M tonnes in 2017 to 2.6M tonnes by 2023
Australian Government announced its commitment to
at a growth rate of 3.6% per annum,76 it remains small
ensure 100% of packaging to be reusable, recyclable or
relative to total world plastic production (335M tonnes
compostable by 2025.73 The plan includes targets to ensure
in 2016).77 Current challenges include the limited supply
that 70% of plastic packaging is recycled or composted;
and high prices of raw materials such as liquid biofuels
increase the average recycled content of all packaging by
and bio-polymers for production. China and India have
30% by 2025; and phase out single-use plastic packaging
also announced in 2017 and 2019 respectively to ban
through design, innovation and alternatives.74 CSIRO
imports on various categories of waste and recyclables.78
analysis projects that under these targets, Australia
While other economies such as Malaysia are expected
could recover $900M in wholesale revenue of secondary
to recapture abandoned waste import markets,79 the
packaging materials and deliver around $1.7B in net carbon
environmental and economic pressures on advanced
emission, water and energy savings annually by 2030.
economies to adopt sustainable solutions is rising.

A national target to ensure that 100% of packaging

a. is reusable, recyclable or compostable by 2025 should
p. $2.7B
% support investment and growth in this opportunity.
+7

Strong potential to realise net environmental savings

$1.7B
(65%)
in carbon emission, electricity and water use through
sustainable packaging, as well as benefits in
$1.2B environmental conservation not quantified.
Net
Environmental $0.7B
Savings (64%)
$0.9B Continued innovation, investment, policy and
Wholesale Value of (35%)
$0.4B behavioural change will be important to realising
Secondary Materials (36%)
benefits for society, industry and the environment.
2018 2030

73 Waste Management Review (2018). Meeting of Environment Ministers Revives National Waste Policy.
74 Waste Management Review (2018). New National Targets Set Within 2025 Packaging Plan.
75 Ellen Macarthur Foundation (2017). The New Plastics Economy: Rethinking the Future of Plastics & Catalysing Action.
76 European Bioplastics (2017). Bioplastics Market Data.
77 Statista (2019). Global Plastic Production Statistics.
78 World Economic Forum (2017). This is why China is Banning Foreign Waste; Sydney Morning Herald (2019). Australia Faces Deepening Recycling Crisis as
India Bans Plastic Waste Imports.
79 Bloomberg (2018). China’s Costly Ban on Foreign Trash.

21
2.3 Premium interactions
Premium interactions describe products and services that
attract a premium price due to quality, convenience, luxury or
novel attributes. Opportunities explored in this section include
convenience foods, luxury and novel products, and agritourism.

Demand for premium goods and services from the food volumes and an 8% increase in average export price.83
and agribusiness industry should remain strong with Such examples reflect the growing opportunity for
continued population growth and growth in consumer premium food experiences and interactions.
real purchasing power. Australia expects real income
per capita to increase by 6% between 2018 and 2023.80 Industry competition, various market risks and future
The Asia-Pacific region expects even higher growth, investments will affect industry growth over the next few
particularly in China (31%), India (38%), Philippines (26%) years. Domestic producers in premium food markets
and Indonesia (23%).81 This should support demand should expect greater global competition from producers
for premium products and services. Rock lobster in the United States, Netherlands, Germany, France,
exports for instance have increased by 14% between New Zealand, Japan and Canada.84 Australia’s food import
2016/17 and 2017/18 to a value of $772M, and now levels have grown from $12B in 2011/12 to $18.5B in 2017/18,
account for 53% of Australia’s total seafood exports.82 where wine, whisky, beer and prepared foods accounted
Likewise, Australian wine exports grew by 20% during for $4.5B (~25%) of purchases during this period.85
the same period, driven by an 11% increase in export

80 International Monetary Fund (2018). World Economic Outlook.

81 Ibid.
82 Rural Bank (2018). Australian Agricultural Trade Annual Review 2017/18.
83 Ibid.
84 Australia China Business Council (2014). Premium Food and Wine Production – Background Paper; World Atlas (2019).
Largest Food Exports by Country – Economics; Reuters (2016). Japan’s New Recipe for Exports: Feed the World’s Foodies.
85 Ibid.

22 Growth opportunities for Australian food and agribusiness

Broader market risks may also affect premium foods and Further investment in infrastructure, such as an
experiences in Australia. For instance, an El Niño (periods improved regional road network as part of the
of sustained warming) is forecast to form in Australia more $3.5B Roads of Strategic Importance initiative,
frequently than it has in the past. This heightens the risk of should also support the visitor economy.88
reduced rainfall, fire danger and extreme weathers; 86
and is likely to affect yields, prices and consumer demand The following sub-sections present market analysis
for Australian food and agribusiness. Growth will depend and commentary on the following opportunities:
also on the timing and scale of public and private 1. Convenience without compromise
investment. For instance, Yarra Valley’s development of 2. Luxury and novel products
a $120M multi-level hotel, which will feature an on-site gin 3. Experiences and tourism
distillery, lavender farm, amphitheatre and provedore,
is expected to boost agritourism across the wine region.87

86 Bureau of Meteorology (2018). El Niño–Southern Oscillation Wrap-Up as at 4 December 2018, Current State of the Pacific and Indian Oceans.
87 Australian Trade and Investment Commission (2018). Tourism Investment in Regional Australia.
88 Department of Infrastructure, Regional Development and Cities (2018). Strengthening Australia’s Cities and Regions,
the Australian Government’s 10 Year Investment in Infrastructure.

23
2.3.1 Convenience without compromise While pre-prepared and packaged meals might compete
more strongly on price and convenience, growth in
Convenience without compromise describe pre-prepared, affordable food delivery services such as UberEats and
and frozen packaged meals sold by supermarkets, Deliveroo might may affect consumer behaviour.
grocery stores and home delivery ready meal services. In 2015-16, the Australian average household weekly
expenditure on meals out and fast food ($80.4 per week)
Convenience meals has potential for growth in domestic
was around 15 times greater than expenditure on packaged
and export markets depending on how consumer
prepared meals ($5.4 per week).91 More generally, lifestyle
preferences and work-life trends change over time. Based
trends will affect demand for convenience meals over the
on current spending and demographic trends, CSIRO
longer term. While labour for participation rate of countries
analysis estimates total domestic consumption of prepared
in the OECD have on average increased over the last few
and frozen packaged meals to grow from $2.7B in 2018
decades,92 average annual hours worked per worker has
to $3.7B by 2030, and the export opportunity to grow
fallen during the same period.93 Such trends are likely to
from $1.0B to $1.6B during the same period.89 Key product
influence consumer eating and purchasing decisions.
segments by market size today include pre-prepared salads,
frozen pizza and frozen-ready meals.90 However, the sector’s
outlook will depend on how the prices, quality, convenience
and nutrition of convenience meals compare to competing
alternatives such as restaurants and fast foods.

.
p. a
% $5.3B
+3

$1.6B Industry’s outlook depends on how convenience meals

(30%)
compete on price, taste, convenience and nutrition with
$3.7B
alternatives such as fast-foods and local eateries.
$1.0B
Australian households currently spend about 15x more on
Export
Opportunity (27%) fast-food and meals out than packaged prepared meals.

$3.7B
(70%)
Work-life trends will affect demand for convenience.
Domestic $2.7B For instance, while labour participation rates have increased
Consumption (73%)
over the last several decades, average annual hours worked
per worker has declined on average for countries in the OECD.

2018 2030

89 CSIRO Futures (2019). See Section 4 for methodology.

90 Euro Monitor (2018). Ready Packaged Meals.
91 ABS (2011). Household Expenditure Survey 2009-10; ABS (2018). Household Expenditure Survey 2015-16.
92 The average labour force participation rate has increased from 68% in 1980 to 72% in 2018 for countries in the OECD. Source: OECD (2019). Labour Force
Participation Rate – OECD Data.
93 The average annual hours worked per worker for countries in the OECD has fallen from 1,896 hours per year in 1980 to 1,746 hours per year in 2018.
Source: OECD (2019). Hours Worked – OECD Data.

24 Growth opportunities for Australian food and agribusiness

2.3.2 Luxury and novel products Success in these markets is dependent on the sector’s
reputation for value, high quality, safety and sustainability.95
Luxury and novel products describe foods that While real wage growth should improve the willingness of
consumers purchase at a premium relative to Australian consumers to pay for premium food products,
comparable options for desired characteristics or form of historical growth in real expenditure per capita on food
differentiation such as brand, quality and/or innovation. and beverages has remained relatively flat, and nearly
Example products include premium items such as luxury unchanged as a proportion of household spending over
wines and high-end truffles, and novelty foods such the last five years.96 This is attributed in part to growth
as miniaturised vegetables or carbonated fruits. in industry productivity and competition (i.e. higher
quality foods at better prices), and relatively higher
Demand for luxury and novel products is expected
growth in expenditure in other household priorities such
continue, driven largely by global markets due to
as education, healthcare and housing.97 CSIRO analysis
population and real income per capita growth.
estimates domestic consumption of luxury and novel
CSIRO analysis estimates the export opportunity for
products to grow from $1.0B in 2018 to around $1.1B by
Australian luxury and novel food products to grow
2030 under current demographic and market conditions.98
from $1.1B in 2018 to $1.7B by 2030. Premium export
markets for Australia include premium beef and lamb,
counter-seasonal fruit and vegetables, seafood such as rock
lobsters and abalone, premium alcohol and products from
artisans such as gourmet cheeses and cultured butters.94

. Established luxury markets should position

p. a
% $2.8B industry for growth. This includes Australian
+2
industries in fine wines, premium beef and lamb,
and seafoods such as rock lobsters and abalone.
$2.1B
$1.7B
(61%)
Real income growth, particularly in Asia, is a likely
Export $1.1B driver of export demand for luxury goods. IMF
Opportunity (52%)
forecasts China’s real income per capita growth
to reach almost 6% p.a. between 2018-2023.

Domestic $1.0B $1.1B Growth in domestic markets is more conservative

Consumption (48%) (39%)
as increased income is more likely to go towards
education, housing and healthcare expenditure
in the medium term.
2018 2030

94 Australian Trade Commission (2015). Premium Food.

95 CSIRO (2017). Food and Agribusiness Roadmap.
96 ABS (2017). Household Expenditure Survey, Australia: Summary of Results, 2015-16.
97 Ibid
98 CSIRO Futures (2019). See Section 4 for methodology.

25
2.3.3 Experiences and tourism is expected to reach $5.6B by 2030, including $3.6B spent
by international visitors (export opportunity)
Experiences and tourism, or agritourism, describe and $1.9B spent by domestic (day trip and overnight)
experiences and attractions that bring visitors to the regional visitors (domestic consumption opportunity).
and rural Australia and provides them with opportunities
to experience and interact with elements across the food International visitor demand is expected to drive the
and agribusiness value chain. Examples include tours and majority of this growth, with visitors from China,
cuisines at farms, wineries, breweries and farm-gates. United States, United Kingdom, New Zealand, Japan
and India expected to account for more than 60%
Agritourism will be an important growth industry for of international expenditure by 2030.101 Only 4% of
Australia’s regional and rural economy over the next China’s population were estimated to own passports in
decade. Domestic day-trip, domestic overnight and 2015,102 but this figure is expected to reach 12% by 2025,
international visitors that experienced at least one resulting in a boom of outbound visitors.103 Agri-tourism
agriculture related activity contributed around $9.4B in growth in Australia however will also depend on how
expenditure to the Australian tourism industry in 2016.99 existing regional barriers such as labour shortages and
CSIRO analysis estimates the annual opportunity for infrastructure quality (e.g. roads, signage, blackspots
agri-related tourism, including accommodation, etc.) are addressed.104 The threat of climate change,
transport and retail sectors, to reach around $18.6B by extreme weather events and natural disasters such as
2030.100 Focusing on expenditure for food, drinks and drought, bushfires and cyclones will also pose long term
accommodation (which most closely align with the food risks both to demand and supply of agritourism.105
and agribusiness industry), the annual opportunity

International visitors is expected

a. a.
p. p. to drive growth, particularly
% %
+5 $18.6B +5 $18.6B
with rising income levels from
3% Other
China and India. Domestic
13% Transport
spending would increase if
more visitors stay overnight.
18% Tours
$12.2B
(65%)
$10.7B $10.7B
3%
Gifts and Agri-tourism should promote
19%
15% Entertainment
cross-industry growth.
$5.6B
International (52%)
15% This includes accommodation,
21% 30%
Food, Drinks transport and retail sectors, valued
and Accomm’ collectively at $18.6B by 2030.
Domestic $5.7B
– Overnight $4.5B (31%) 31%
(42%)
Domestic 17% Airfares
– Day Trip 6% 4% 14% Regional challenges may
2018 2030 2018 2030 affect growth if unaddressed.
This include labour shortages,
Agritourism, annual Agritourism, annual
expenditure by visitor type expenditure by category type infrastructure quality and
environmental risks.

99 CSIRO Futures (2019). See Section 4 for methodology.

100 Ibid.
101 Tourism Research Australia (2017). Tourism Forecasts.
102 Goldman Sachs (2015). The Asian Consumer – The Chinese Tourist Boom.
103 Ibid.
104 Ecker, S., & Australia. Bureau of Agricultural Resource Economics Sciences. (2010). Drivers of regional agritourism and food tourism in Australia.
Canberra, A.C.T.: ABARE-BRS.
105 Ibid.

26 Growth opportunities for Australian food and agribusiness

27
3 Further reading
For additional research on the current state and outlook of • CSIRO. (2017). Food and Agribusiness –
the Australian food and agribusiness industry, this report A Roadmap for Unlocking Value-Adding Growth
recommends the following papers for further reading: Opportunities for Australia. Accessed at <https://
www.csiro.au/en/Do-business/Futures/Reports/
Food-and-Agribusiness-Roadmap>
Industry outlook
• Australian Academy of Science. (2017). Decadal • Food and Agriculture Organisation of the
Plan for Australian Agricultural Sciences (2017- United Nations (2017). The Future of Food and
2026). Accessed at <https://www.science.org.au/ Agriculture – Trends and Challenges. Accessed
files/userfiles/support/reports-and-plans/2017/ at <http://www.fao.org/3/a-i6583e.pdf>
agricultural-decadal-plan-2017-26.pdf>
• Food Innovation Australia Limited. (2017).
• Australian Bureau of Agricultural and Resource Size of the Prize: An Overview of 16 Opportunities
Economics and Sciences. (2018). Food Demand for Australian Food & Agribusinesses. Accessed at
in Australia: Trends and Issues 2018. Accessed at <https://fial.com.au/size-of-the-prize-report>
<http://www.agriculture.gov.au/abares/research-
• Rural Bank. (2018). Australian Agricultural Trade
topics/food-demand/trends-and-issues-2018>
Annual Review 2017/18. Accessed at <https://
• Department of Agriculture, Fisheries and Forestry www.ruralbank.com.au/assets/responsive/
(2012). Food Demand to 2050, Opportunities for pdf/publications/trade-report-2018.pdf>
Australian Agriculture. Accessed at <http://www.
agriculture.gov.au/SiteCollection Documents/abares/
Health and wellbeing
publications/Outlook2012FoodDemand2050.pdf>
• Australian Institute of Health and Welfare. (2017).
• Australian Bureau of Statistics. (2018). Household Health Expenditure Australia 2015-16. Accessed at
Expenditure Survey, Australia. Summary of Results, 2015- <https://www.aihw.gov.au/getmedia/3a34cf2c-c715-
16. Accessed at <http://www.abs.gov.au/ausstats/abs@. 43a8-be44-0cf53349fd9d/20592.pdf.aspx?inline=true>
nsf/Latestproducts/6530.0Media%20Release22015-16>
• CSIRO. (2018). Future of Health – Shifting Australia’s
• Australian Food & Grocery Council. (2018). State of Focus from Illness Treatment to Health and
the Industry 2018 – Resilience through Challenge. Wellbeing Management. Accessed at <https://
Accessed at <https://www.afgc.org.au/wp-content/ www.csiro.au/en/Showcase/futureofhealth>
uploads/AFGC-State-of-the-Industry-2018-Report.pdf>
• CSIRO and KPMG. (2018). Food for Health –
• Australian Trade and Investment Commission. (2017). Trends and Opportunities in Health and Wellness
Investment Opportunities in Australian Agribusiness for the ASEAN Region. Accessed at <https://assets.
and Food. Accessed at <https://www.austrade.gov.au/ kpmg.com/content/dam/kpmg/au/pdf/2018/food-
ArticleDocuments/2800/Investment-opportunities- for-health-trends-asean-region-csiro-kpmg.pdf>
in-Australian-agribusiness-and-food.pdf.aspx>

• Australian Trade and Investment Commission. (2018).

Food and Beverage – Industry Capability Statements.
Accessed at <https://www.austrade.gov.au/International/
Buy/Australian-industry-capabilities/Food-and-Beverage>

29
Sustainable solutions Premium interactions
• Commonwealth of Australia. (2017). National Food • Australian Trade and Investment Commission.
Waste Strategy: Halving Australia’s Food Waste (2018). Premium Food. Accessed at <https://
by 2030. Accessed at <http://www.environment. www.austrade.gov.au/ArticleDocuments/2814/
gov.au/protection/waste-resource-recovery/ Premium-Food-Capability-Report.pdf.aspx>
publications/national-food-waste-strategy>
• Australian Trade and Investment Commission.
• Department of Environment and Energy. (2019). (2017). Tourism Forecasts. Accessed at <https://
National Food Waste Baseline, Final Assessment Report. www.tra.gov.au/ArticleDocuments/257/
Accessed at <https://www.environment.gov.au/system/ Tourism%20Forecasts.pdf.aspx?Embed=Y>
files/pages/25e36a8c-3a9c-487c-a9cb-66ec15ba61d0/files/
national-food-waste-baseline-executive-summary.pdf> • Deloitte. (2018). Perspectives – Agritourism,
Agribusiness Bulletin. Accessed at <https://
• Department of the Environment and Energy. (2018). www2.deloitte.com/au/en/pages/consumer-
National Waste Report 2018. Accessed at industrial-products/articles/agritourism.html>
<http://www.environment.gov.au/system/files/
resources/7381c1de-31d0-429b-912c-91a6dbc83af7/
files/national-waste-report-2018.pdf>

• Ellen Macarthur Foundation. (2016). The New

Plastics Economy, Rethinking the Future of Plastics.
Accessed at <https://www.ellenmacarthurfoundation.
org/publications/the-new-plastics-economy-
rethinking-the-future-of-plastics>

• Food Innovation Australia Limited. (2019).

Size of the Prize: Protein Market: Size of the Prize
Analysis for Australia. Accessed at
<https://fial.com.au/Protein_Report_2019>

• Food Innovation Australia Limited. (2018). Food

Waste Report. Accessed at <https://fial.com.
au/Article?Action=View&Article_id=217>

• Poore, J., & Nemecek, T. (2018). Reducing food’s

environmental impacts through producers and
consumers. Science (New York, N.Y.), 360(6392), 987-
992. Accessed at <http://www.ox.ac.uk/news/2018-
06-01-new-estimates-environmental-cost-food>

30 Growth opportunities for Australian food and agribusiness

31
4 Methodology
CSIRO Futures conducted desktop research, economic The valuations presented provide an indication on the
analysis and consultations with industry experts to magnitude and direction of each opportunity. However, it
value the opportunities presented in this report: is important to acknowledge that results are characterised
by high degrees of uncertainty and are sensitive to
1. Desktop research was first undertaken to better changes in industry conditions. The following sub-sections
understand the economic drivers of growth and provide a summary of the methodology, parameters
potential impact for each of the opportunities and sources used to value the growth or impact of
identified in the roadmap. Recommended reports each of the opportunities explored in this report. 107
for further reading are summarised in Section 3.

2. Economic analysis was undertaken to quantify each

the roadmap opportunities.106 Data and assumptions
were developed and drawn from a variety of sources
such as the Australian Bureau of Statistics and
Australian Institute of Health and Welfare. A high-level
approach to estimations is generalised as follows:

a. Domestic consumption = Average price x Number

of Australian consumers x Projected growth
b. Export opportunity = World export volumes x
Australia’s market share x Projected growth
c. Environmental benefits = Net emission, water
and electricity savings from consumption
(or recovery) relative to the alternative x
Expected growth in consumption

3. Consultations were held with research scientists and

industry experts across CSIRO’s Agriculture and Food
business unit to refine the methods and parameters.
Feedback and revisions were incorporated into
the final valuations presented in this report.

106 General details on cost benefit analysis approaches and principles can be found at CSIRO’s Impact Evaluation Guide, available at
<https://www.csiro.au/~/media/About/Files/Our-impact-framework/CSIROImpactEvaluationGuide_Nov2015_WEB.pdf?la=en&hash=B351D24FB3CE02CB34FB
859F2C34AA3940EE6D1F>
107 Please note that the assumption values presented may not match the report results exactly due to rounding differences.
Final numbers are also reported in 2018 prices with adjustments made for inflation where appropriate.

33
Figure 2 estimates

Total food and agribusiness opportunities = A × (1+B)

PARAMETERS VALUE

A Australian domestic household consumption of food, beverages and alcohol108 $135B in 2018

Australian food and agribusiness exports109 $52B in 2018

B Forecast growth in domestic household consumption of food, beverages and alcohol110 2.3% per annum

Forecast growth in total food and agribusiness exports111 2.8% per annum

CSIRO roadmap opportunities = A

PARAMETERS VALUE

A Sum domestic and export opportunities analysed in this report112 $25B by 2030

108 Based on the average weekly expenditure of Australian households on food, beverages and alcohol in 2016. 2018 estimates are based on an assumed
3.9% per annum growth between 2016 and 2018 in nominal terms. For context, total Australia household expenditure in food and beverages has grown
historically at 3% per annum between 2019-10 and 2015-16, and at 4.9% per annum between 2003-04 and 2015-16. Source: ABS (2017). 6530.0 - Household
Expenditure Survey, Australia: Summary of Results, 2015-16. See Table 1.1 and 1.2.
109 DFAT (2019). Australia’s Merchandise Exports and Imports Country and Commodity Pivot Table. 2005-06 to 2017-18. October 2018 data.
110 Based on historical household consumption growth in food, beverages and alcohol between 2003-04 and 2015-16 at 4.9% per annum with adjustments for
inflation (2.6% per annum). Sources: ABS (2017). 6530.0 - Household Expenditure Survey, Australia: Summary of Results, 2015-16. See Table 1.1 and 1.2. IMF
(2019). World Economic Outlook 2019. Between 2.1% and 2.8% per annum between 2019 and 2024.
111 Based on historical export growth of Australian food and agribusiness products between 2012-13 and 2017-18 at 5.4% per annum with adjustments for
inflation (2.6% per annum). Sources: DFAT (2019). Australia’s Merchandise Exports and Imports Country and Commodity Pivot Table. 2005-06 to 2017-18.
October 2018 data. IMF (2019). World Economic Outlook 2019. Between 2.1% and 2.8% per annum between 2019 and 2024.
112 Estimates exclude sustainable packaging, waste conversion and tourism from international visitors to improve the comparability of numbers to total
domestic consumption and export estimates. The summation is further discounted by 30% to account for potential overlap in product and market
definitions.

34 Growth opportunities for Australian food and agribusiness

Free-from and natural foods

Annual domestic consumption = A × (1+B)

PARAMETERS 113 VALUE

A Retail sales of free-from and organic foods and beverages, 2018 $1.8B

B Forecast annual growth in retail sales114 3.1%

Annual export opportunity = A x (1 + B) x C x D x E

PARAMETERS VALUE

A Global market for free-from and organic foods and beverages115 $102B USD

B Annual growth in global market for free-from and organic foods116 4.6% per annum

C Export share of global market117 31%

D USD to AUD118 1.4

E Australia’s market share of food & agribusiness exports119 2.1%

113 Euro Monitor International (2018). Free-From and Organic Foods and Beverages – Australia.
114 Growth is forecast at the average of Euromonitor Australian growth estimates and IMF forecasts for Australian real GDP growth between 2018-23. Growth
is forecast at Australian real GDP growth from 2024 onward (2.6% p.a.). Source: Euromonitor International (2018). Free-From Food, Organic Foods and
Beverages; IMF (2019). World Economic Outlook 2018-2024.
115 Euro Monitor International (2018). Free-From and Organic Foods and Beverages – Global
116 Growth is forecast at the average of Euromonitor global growth estimates and IMF forecasts for world real GDP growth between 2018-23. Growth is forecast
at world real GDP growth from 2024 onward (3.7% p.a.). Source: Euromonitor International (2018). Free-From Food, Organic Foods and Beverages; IMF
(2019). World Economic Outlook 2018-2024.
117 Based on the 5-year average of global exports as a percentage of global gross domestic product. Source: World Bank (2019). World Bank National Accounts
Data and OECD National Accounts Data.
118 XE Corporation (2019). Live Market Rates, USD to AUD. Accessed on 2019-02-27.
119 Based on 2018 trade statistics. Sources: Department of Foreign Affairs and Trade (2018). Australia’s Merchandise Exports and Imports; UNCTAD (2018).
Merchandise Trade Matrix by Export Products and Groups; ABARES (2012). Food Demand to 2050: Opportunities for Australian Agriculture.

35
Vitamins and supplements, and fortified and functional foods

Annual domestic consumption = A × (1+B)

FORTIFIED &
VITAMINS &
PARAMETERS FUNCTIONAL
SUPPLEMENTS
FOODS

A Australian consumption of nutraceuticals in 2018120 $1.5B $4.0B

B Annual real growth in Australian consumption of nutraceuticals121 2018-23: 3.3% 2018-23: 2.6%
2023-30: 2.6% 2023-30: 2.6%

Annual export opportunity = A x (1+B)

FORTIFIED &
VITAMINS &
PARAMETERS FUNCTIONAL
SUPPLEMENTS
FOODS

A Australian exports of nutraceuticals in 2018 (incl. Daigou sales)122 $2.0B $2.7B

B Annual real growth in global market for nutraceuticals123 2018-23: 4.4% 2018-23: 4.0%
2023-30: 3.7% 2023-30: 3.7%

120 Sourced from Euromonitor Statistics and IBISWorld. Sales estimates include vitamins, supplements, and fortified / functional foods and beverages.
This includes sport nutrition and herbal/traditional related products. Adjustments were made downwards to account for potential exports through
Daigou channels.
121 Growth is forecast at the average of Euromonitor Australian growth estimates and IMF forecasts for Australian real GDP growth between 2018-23. Growth is
forecast at Australian real GDP growth from 2024 onward (2.6% p.a.). Source: Euromonitor International (2018). Vitamins and Dietary Supplements, Herbal &
Traditional Products, Sports Nutrition, and Fortified and Functional Foods; IMF (2019). World Economic Outlook 2018-2024.
122 Triangulated from Euromonitor global consumption data for nutraceuticals, annual reports of ASX-listed nutraceutical companies, and Australia’s historical
market share of food and agribusiness exports (UNCTAD and DFAT databases). Adjustments from domestic consumption were made to account for exports
through Daigou sales as well.
123 Growth is forecast at the average of Euromonitor global industry forecasts and IMF forecasts for world real GDP growth (3.7% p.a.) between 2018-23. Growth
from 2024 onward converges to forecast world real GDP growth at 3.7% p.a. Sources: Euromonitor International (2018). Vitamins and Dietary Supplements,
Herbal & Traditional Products, Sports Nutrition, and Fortified and Functional Foods; IMF (2019). World Economic Outlook 2018-2024; Department of Foreign
Affairs and Trade (2018). Australia’s Merchandise Exports and Imports; UNCTAD (2018). Merchandise Trade Matrix by Export Products and Groups; ABARES
(2012). Food Demand to 2050: Opportunities for Australian Agriculture.

36 Growth opportunities for Australian food and agribusiness

Personalised nutrition

Annual domestic consumption = A × B × C × (1+D) × (1+E)

PARAMETERS VALUE

A Annual estimated health expenditure on dietitians and nutritionists:

   [Total annual health expenditure in Australia124] x $54B AUD in 2016-17
   [Percentage of health service usage with dietitians and nutritionists] 125
2.5%

B Consumer willingness to pay for personalised nutrition relative to non-personalised nutrition:

   [Percentage of consumers willing to pay for personalised nutrition] x 30% of population126
   [Average premium that consumers are willing to pay for personalised nutrition] 45% premium127

C Technology adoption rate 60% adoption by 2030128

D Annual growth in Australian population levels 1.5%129

E Annual growth in real health expenditure per capita 1.7%130

124 Estimate excludes expenditure on hospitals, dental services, pharmaceuticals, transport services and research. Source: AIHW (2018).
Health Expenditure Australia 2016-17, Supplementary Tables and Figures, Table A6.
125 ABS (2017). National Health Survey: Health Service Usage and Health Related Actions, Australia, 2014–15.
126 Fischer, A., Berezowska, A., Van der Lans, I., Ronteltap, A., Rankin, A., Kuznesof, S., . . . Frewer, L. (2016). Willingness to pay for personalised nutrition across
Europe. The European Journal of Public Health, 26(4), 640-644.
127 Fischer, A., Berezowska, A., Van der Lans, I., Ronteltap, A., Rankin, A., Kuznesof, S., . . . Frewer, L. (2016). Willingness to pay for personalised nutrition across
Europe. The European Journal of Public Health, 26(4), 640-644.
128 Prior research from CSIRO and KPMG anticipate general consumer demand for personalised nutrition (e.g. DNA testing, microbiome testing, diagnostic kits,
etc.) to gain momentum in 5+ years as service awareness, affordability and accessibility improves. Source: KPMG & CSIRO (2018). Food for Health, Trends and
Opportunities in Health and Wellness for the ASEAN Region.
129 ABS (2018). 3222.0 - Population Projections, Australia, 2012 to 2101 (Series B).
130 AIHW (2016). Health expenditure Australia, 2015-16.

37
Alternative protein sources

Domestic consumption = A x B x D x (1+E) x (1+F)

Net environmental savings = A x B x (1+E) x (1+F) x G x H

PARAMETERS VALUE

A Australian population level in 2016131 24M

B Estimated proportion of population that eat predominantly vegetarian in 2016132 11%

C Annual average expenditure per capita on meat and seafood in 2016133 $645

D Annual average expenditure per predominantly vegetarian person on alternative $725

protein sources in 2016134

E Annual projected population growth135 1.5%

F Annual projected growth in population proportion that eat predominantly vegetarian136 3.7%

G Annual net savings per person from alternative protein consumption to:137
  Carbon footprint 0.54 TCO2e
  Water footprint 280kL

H Value of environmental and resource savings (2018 prices)

   Average carbon price138 $77.4 / TCO2e
   Average water price 139
$2.1 / kL

Export opportunity = A x (1+B) x (C / (1 – C))

Net environmental savings = export opportunity x D

PARAMETERS VALUE

A Australia meat & seafood exports140 $14.3 B

B Global annual growth in meat demand141 1.5%

C Percentage of world population that eat predominantly vegetarian142 9% in 2016,

12% by 2030

D Net environmental savings per dollar of alternative protein consumed143 0.83

131 ABS (2018). Australian Demographic Statistics, Jun 2018.

132 Roy Morgan (2016). The Slow but Steady Rise of Vegetarianism in Australia.
133 ABS (2017). Household Expenditure Survey, Australia: Summary of Results, 2015–16.
134 This analysis estimates the per capita spend on alternative protein sources as the average budget an individual would allocate to meat or seafood if he/she
did not eat predominantly vegetarian. This estimate is derived from the following formula: D = C / (1 - B). This adjustment is required because ABS estimates
for meat and seafood expenditure per capita counts the proportion of Australia’s population that eats predominantly vegetarian as well.
135 ABS (2018). 3222.0 - Population Projections, Australia, 2012 (base) to 2101.
136 Roy Morgan (2016). The Slow but Steady Rise of Vegetarianism in Australia.
137 Rosi, A., Mena, P., Pellegrini, N., Turroni, S., Neviani, E., Ferrocino, I., . . . Scazzina, F. (2017). Environmental Impact of Omnivorous, Ovo-Lacto-Vegetarian, and
Vegan Diet. Scientific Reports (Nature Publisher Group), 7(1), 1-9.
138 Department of Environment and Heritage Protection (2017). Global Carbon Offset Markets Analysis.
139 Team Poly (2017). Water Prices in Australia.
140 Department of Foreign Affairs and Trade (2018). Australia’s Merchandise Exports and Imports.
141 OECD, FAO (2016). OECD-FAO Agricultural Outlook 2016-2025.
142 Weighted by destination share of Australian exports in 2017. Sources: Various.
143 Based on the ratio of net environmental savings to domestic consumption calculated in the previous table.

38 Growth opportunities for Australian food and agribusiness

Organic waste conversion

Wholesale revenue from organic secondary materials = A × (1+B) × (C+D) × E

Net environmental savings from organic waste conversion = A × (1+B) × (C+D) × (F × G)

PARAMETERS VALUE

A Organic waste generated from agriculture and fisheries144 16.2MT per annum

B Annual growth in organic waste generation145 0.8% per annum

C Organic waste recycling rate146 52%

D Waste conversion uplift147 +24% by 2030

E Wholesale value of recycled organics148 $31/T in 2018

F Net savings from recycling of organic waste:149

  Greenhouse gas emissions 0.4 TCO2e/T
   Cumulative energy demand 0.9 GJ LHV/T
  Water use 0.6 kL/T

G Value of environmental savings

   Average carbon price150 $73.7/TCO2e
  Average wholesale electricity spot prices151 $16.2/GJ LHV
  Average water price152 $2.2/kL

144 Department of Environment and Energy (2018). National Waste Report 2018.
145 Based on the average of historical organic waste generation growth (~0.2%) and forecast population growth between 2018 and 2030. Source: Department
of Environment and Energy (2018). National Waste Report 2018; ABS (2018). 3222.0 - Population Projections, Australia, 2012 (base) to 2101.
146 Department of Environment and Energy (2018). National Waste Report 2018.
147 Department of Environment and Energy (2017). National Food Waste Strategy.
148 Sourced from historical sales data from Victoria with adjustments for inflation. Source: Sustainability Victoria (2013). Recycled Organics Market Analysis.
149 Department of Environment, Climate Change and Water NSW (2010). Environmental Benefits of Recycling; Grant, T. a. (2005). Life Cycle Impact Data for
Resource Recovery from C&I and C&D Waste in Victoria. RMIT University Centre for Design.
150 Non-plastic includes paperboard, aluminium, glass & steel. Source: Department of Environment and Heritage Protection (2017). Global Carbon Offset
Markets Analysis.
151 AER (2018). Annual Volume Weighted Average Spot Prices, Wholesale Markets.
152 Team Poly (2017). Water Prices in Australia.

39
Sustainable packaging

Wholesale revenue from secondary materials = A × (1+B) x C x (D to E) x F

Net environmental savings = A × (1+B) x C x (D or E) x (G x H)

PARAMETERS VALUE

A Total packaging waste – 2016 estimate153 0.85MT plastics,

4.2MT non-plastic

B Annual growth in packaging consumption154 1.6% per annum

C Packaging waste related to food and agribusiness155 68%

D Packaging recycling rate156 31% for plastics

65% for non-plastic

E Sustainable packaging uplift target 157

100% recovery rate
by 2025

F Average price paid for plastic recyclables158 $448 AUD/T in 2018

Average price paid for non-plastic recyclables 159
$174 AUD/T in 2018

G Net savings from recycling waste: 160

  Greenhouse gas emissions - paper packaging, plastic packaging 0.6, 1.5 TCO2e/T
  Cumulative energy demand - paper packaging, plastic packaging 10.8, 56.3 GJ LHV/T
  Water use - paper packaging, plastic packaging 28.3, 8.5 kL/T

H Value of environmental savings

   Average carbon price161 $73.7/TCO2e
   Average wholesale electricity spot prices 162
$16.2/GJ LHV
   Average water price163 $2.2/kL

153 National Packaging Covenant Industry Association (2017). National Recycling and Recovery Survey (NRRS) 2015–16 for Plastics Packaging.
154 Calculation from historical data available between 2011 and 2016.
155 Environmental Enterprises. Sustainable Food Packaging for Our Future. Accessed Nov 2018.
156 National Packaging Covenant Industry Association (2017). National Recycling and Recovery Survey (NRRS) 2015–16 for Plastics Packaging.
157 ACPO (2018). Australia’s environment ministers commit to eliminating all packaging going to landfill by 2025.
158 KS Environmental Group (2018). Recycling Commodity Prices: The China Effect.
159 European Union Statistics (2018). Material Prices for Recyclates.
160 Department of Environment, Climate Change and Water NSW (2010). Environmental Benefits of Recycling; Grant, T. a. (2005). Life Cycle Impact Data for
Resource Recovery from C&I and C&D Waste in Victoria. RMIT University Centre for Design.
161 Department of Environment and Heritage Protection (2017). Global Carbon Offset Markets Analysis.
162 AER (2018). Annual Volume Weighted Average Spot Prices, Wholesale Markets.
163 Team Poly (2017). Water Prices in Australia.

40 Growth opportunities for Australian food and agribusiness

Luxury and novel products

Domestic consumption = A x B x (1 + C) x D x (1 + E)

PARAMETERS VALUE

A Average annual expenditure per capita on food, beverage and alcohol164 $108 per week x 52

B Average percentage of household expenditure on food, 0.7%

beverages and alcohol that are luxury-typed165

C Annual real growth in expenditure per capita on food, beverage and alcohol166 0%

D Australian population level167 24M in 2016

E Annual projected population growth168 1.5%

Export opportunity = A x (1 + B) x C x D x E

PARAMETERS VALUE

A Global market for luxury and novel foods169 $84B GBP in 2016

B Annual real growth in global market for luxury and novel foods170 ~3.9% per annum

C Export share of global market171 31%

D GBP to AUD172 1.8

E Australia’s market share of exports173 2.1%

164 ABS (2017). Household Expenditure Survey, Australia: Summary of Results, 2015–16.
Adjustments for inflation were made to calculate expenditure in 2018 prices.
165 Bain & Company (2018). Altagamma 2018 - Worldwide Luxury Market Monitor; Nielsen (2017). Premium Potential: Grocery Categories Pacific Consumers are
Willing to Spend More On; Palermo, C., McCartan, J., Kleve, S., Sinha, K., and Shiell, A. (2016). A Longitudinal Study of the Cost of Food in Victoria Influenced
by Geography and Nutritional Quality.
166 ABS (2017). Household Expenditure Survey, Australia: Summary of Results, 2015–16.
167 ABS (2018). Australian Demographic Statistics, Jun 2018.
168 ABS (2018). 3222.0 - Population Projections, Australia, 2012 (base) to 2101.
169 Bain & Company (2018). Altagamma 2018 - Worldwide Luxury Market Monitor.
170 Between 2018 and 2023, annual growth is assumed to be between forecast global real GDP growth and forecasts from the worldwide luxury market
monitor. Industry growth is estimated to converge towards forecast global real GDP growth rates from 2023-2030.
Sources: Bain & Company (2018). Altagamma 2018 - Worldwide Luxury Market Monitor; IMF (2018). World Economic Outlook - Real GDP Growth.
171 Based on the 5-year average of global exports as a percentage of global gross domestic product. Source: World Bank (2019).
World Bank National Accounts Data and OECD National Accounts Data.
172 XE Corporation (2019). Live Market Rates, GBP to AUD. Accessed on 2019-02-27.
173 Based on 2018 trade statistics. Sources: Department of Foreign Affairs and Trade (2018). Australia’s Merchandise Exports and Imports; UNCTAD (2018).
Merchandise Trade Matrix by Export Products and Groups; ABARES (2012). Food Demand to 2050: Opportunities for Australian Agriculture.

41
Convenience without compromise

Domestic consumption = A x B x (1+C) x (1+D)

PARAMETERS VALUE

A Australian population level in 2016174 24M

B Average expenditure per capita on convenience meals in 2016175 $2.1 per week x 52

C Annual projected population growth176 1.5%

D Annual real expenditure per capita growth on convenience meals177 0.8%

Export opportunity = A x (1 + B) x C x D x E

PARAMETERS VALUE

A Global market for convenience meals178 $110B USD in 2018

B Annual real growth in global market for convenience meals179 4.0% per annum

C Export share of global market180 31%

D USD to AUD181 1.4

E Australia’s market share of exports182 2.1%

174 ABS (2018). Australian Demographic Statistics, Jun 2018.

175 Convenience meals counts all of canned and bottled baby foods, frozen prepared meals and packaged prepared meals. Source: ABS (2017). Household
Expenditure Survey, Australia: Summary of Results, 2015–16.
176 ABS (2018). 3222.0 - Population Projections, Australia, 2012 (base) to 2101.
177 ABS (2017). Household Expenditure Survey, Australia: Summary of Results, 2015–16.
ABS (2017). Household Expenditure Survey, Australia: Summary of Results, 2009–10.
178 Technavio (2017). Global Ready Meals Market 2016-2021.
179 Between 2018 and 2023, growth is assumed to be between forecast global real GDP growth and Technavio’s forecast for growth in ready meal markets.
Industry growth is estimated to converge towards forecast global real GDP growth rates from 2023-2030. Sources: Technavio (2017). Global Ready Meals
Market 2016-2021; IMF (2018). World Economic Outlook - Real GDP Growth.
180 Based on the 5-year average of global exports as a percentage of global gross domestic product. Source: World Bank (2019). World Bank National Accounts
Data and OECD National Accounts Data.
181 XE Corporation (2019). Live Market Rates, GBP to AUD. Accessed on 2019-02-27.
182 Based on 2018 trade statistics. Sources: Department of Foreign Affairs and Trade (2018). Australia’s Merchandise Exports and Imports; UNCTAD (2018).
Merchandise Trade Matrix by Export Products and Groups; ABARES (2012). Food Demand to 2050: Opportunities for Australian Agriculture.

42 Growth opportunities for Australian food and agribusiness

Experiences and tourism

Domestic consumption and export revenue = A x (1+B)

PARAMETERS VALUE

A Annual retail sales in agritourism in 2016 from:183

  Domestic day trip visitors $0.6B
   Domestic overnight visitors $4.1B
  International visitors $4.7B

B Annual forecast growth in real expenditure for:184

  Domestic day trip visitors 1.3%
   Domestic overnight visitors 2.1%
  International visitors 6.7%

183 Retail sales or tourism expenditure counts day trip, overnight and international visitors that participated in at least one agritourism-type activity across
expenditure categories such as airfares, food and accommodation, gifts and entertainment, tours and transportation. Sources: Tourism Research Australia
(2018). National Visitor Survey & International Visitor Survey; Deloitte (2018). Perspectives – Agritourism, Agribusiness Bulletin.
184 Tourism Research Australia & AusTrade (2017). Tourism Forecasts.

43
As Australia’s national science For further information

CSIRO Futures
agency and innovation catalyst, Katherine Wynn
Senior Economic Advisor
CSIRO is solving the greatest katherine.wynn@csiro.au
Brian Sebastian
challenges through innovative Economist
brian.sebastian@csiro.au
science and technology. Agriculture and Food
Martin Cole
CSIRO. Unlocking a better future Deputy Director
martin.cole@csiro.au
for everyone.

Contact us

1300 363 400

+61 3 9545 2176
csiroenquiries@csiro.au
csiro.au

B&M | 19-00368