Fast-changing market needs flexible paths

Fast-changing market needs flexible paths


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EXPERT PANEL: Cornell University's Ed McLaughlin, University of Adelaide's Wendy Umberger, SA Food Innovation Centre's Karen McNaughton, University of Adelaide's Kym Anderson, Utah State University's Kynda Curtis, Michigan State University's Tom Reardon, Colarado State University's Dawn Thilmany and Food SA CEO Catherine Sayer.

EXPERT PANEL: Cornell University's Ed McLaughlin, University of Adelaide's Wendy Umberger, SA Food Innovation Centre's Karen McNaughton, University of Adelaide's Kym Anderson, Utah State University's Kynda Curtis, Michigan State University's Tom Reardon, Colarado State University's Dawn Thilmany and Food SA CEO Catherine Sayer.

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FOOD producers and manufacturers need to be able to respond quickly to a rapidly changing global market, according to a panel of international experts.

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FOOD producers and manufacturers need to be able to respond quickly to a rapidly changing global market, according to a panel of international experts.

Speaking at a special forum at the Australasian Agricultural and Resource Economics Society in Adelaide on Tuesday, five international academics in the field gave their interpretation of global food trends.

Michigan State University’s Tom Reardon said Australia had a big opportunity due to its proximity to Asia.

“It is by far the fastest growing and most important market,” he said.

Professor Reardon said the Asian market for food was growing five to seven times faster than that of Europe, the United States or Australasia, with a rapidly urbanised population.

But he warned there would also be challenges.

“These markets are contested and Asian suppliers are rising fast to supply their own market,” he said.

Speaking about a visit to an Indonesian grocer, he said five years ago US apples were very expensive but were also of a high quality, while Chinese apples were of a lesser quality but cheaper.

“Five years later, Chinese apples have improved quality but they are still cheaper,” he said.

“If you have a brand, you need to be able to defend it, otherwise (retailers and consumers) will find the next cheap option.”

Prof Reardon said it was key to look at the product cycle, with niche products often eventually becoming commodified, leading to the need to diversify and find the point of difference that will distinguish the product in the market place.

​Colorado State University’s Dawn Thilmany said there was the potential for things to change rapidly.

“Whenever you think you’re at optimal, you need to look beyond,” she said.

“In apples they used to have a new varietal every 10 years, but these days they have a new one every three to five years. The reinvention of pathways has sped up.”

Cornell University’s Ed McLaughlin said this was an issue for producers who were investing into markets.

“The consumer is capricious,” he said.

The Asian market is not the only one with potential for Australian producers in coming years, with new bilateral agreements being formed with the European Union following Brexit.

University of Adelaide’s Kym Anderson said the EU had traditionally been a big market of Australia’s in the 1970s but things had changed since.

As it stood, Australia imports more food and beverage products from the EU than it exports there, according to Professor Anderson.

He said the bulk of Australia’s exports to the EU were unprocessed products, except wine, while its imports are almost exclusively processed products, such as cheese.

Prof Anderson said there was still competition from other countries, such as New Zealand, when trying to move into these markets.

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