Shifts in consumption behaviour and incomes, combined with increasingly positive perceptions of Australian beef, paint a bright picture for suppliers of a premium product against a backdrop of the long term downward trend for overall red meat consumption.
That’s the message being delivered by Meat and Livestock Australia’s latest data sets on both global and domestic demand for high quality beef.
It’s particularly good news for the Wagyu breed, which arguably heads up that sector of the industry and is looking at big increases in production over the next five years.
What it effectively means is the jump in turnoff is not likely to saturate demand and erode premiums.
MLA’s chief marketing and communications officer Lisa Sharp presented an overview of demand and supply trends at the Australian Wagyu Association’s annual conference, held in Albury.
Wagyu breeders, she said, had the opportunity to be the sector leader in the Australian beef industry by pioneering plate-to-paddock thinking, rather than the reverse which has traditionally been the red meat industry’s approach.
Historically, the industry produces a certain volume of meat and then seek markets which pay the best possible price, she said.
But demand is in fact an outcome of various factors which are constantly changing in the world around us and it is actually consumers and the value they see that creates the pull that helps us realise premiums.
Global consumer insight research is showing wealthier people have a higher affinity for beef and indeed eat more of it than the average consumer.
And in all of these households, Australian beef is typically eaten more often.
“With higher rates of consumption, we see rising rates of endorsement – we call this the rising tide effect,” Ms Sharp said.
“Among the wealthier groups, we are seeing a prevalence of people saying they are willing to pay more for Australian beef.”
This comes alongside a 20-year trend in OECD (Organisation for Economic Co-operation and Development) countries of declining overall beef consumption.
“Beef is facing strong competition from chicken, pork and seafood. Health and environmental concerns are also having an increasing impact,” Ms Sharp said.
“However, wealthier consumers across the world value what Australian beef delivers.”
MLA’s global consumer tracker shows the top 30pc income group say the reasons they are willing to pay more include superiority, taste, consistent quality, family favourite and guaranteed safe to eat.
“One of our most developed markets for beef is the United States and here we are seeing growth of Wagyu on the menu,” Ms Sharp said.
In fact, penetration of Wagyu on US menus has increased by 84pc over the past four years.
Back home, the story is similar.
“Wagyu is developing fast appeal with our multicultural consumer base,” Ms Sharp said.
“Chefs are telling us Wagyu is their signature product for customers seeking the pinnacle in quality.”
MLA consumer research shows the “passionate foodies” group, who use the food choices they make to tell a story about themselves and who are very interested in care and pride of the producer, are a growing consumer segment.