Australia is yet to truly appreciate just how big Asia’s hunger for our food is going to grow, or how to reap the best returns from what farmers can produce.
Typical of our fragmented and often unsophisticated approach to dealing with nearby Asia’s ballooning class of wealthy, but choosey consumers is a lack of focus on one of the nation’s most obvious marketing premiums – brand “Australia”.
According to KPMG trade specialist, Doug Ferguson, a concerted effort to drive the Australia brand into key Asian markets should be a priority if agribusiness is to tackle some of the challenges likely to frustrate its export success in the next decade.
“We need a unified, niche campaign with clear, consistent messaging to support the image of Australia’s high quality, healthy products,” he told this month’s agricultural Outlook 2018 conference.
“And, we need to move quickly if we are to compete with Canada, New Zealand and others who have already recognised and enjoyed success with this sort of strategy.
It’s what works
“It may sound trivial, but it works very well,” he said pointing to poignant national branding strategies adopted by NZ businesses, including Fonterra and Zespri.
Zespri now accounted for a third of the world’s trade in kiwifruit – much of it to Asia.
We need to recognise the market power is now in Asian consumer’s hands
In the past decade Asian demand had swiftly grown to absorb more than two thirds of Australia’s agricultural exports – eight of our top 10 overseas markets are now Asian countries.
But there was far more demand to come and Mr Ferguson said Australia’s flat to modest gains in farm productivity and a relatively unco-ordinated market growth strategy meant the local farm sector was at risk of being left on the sidelines while new and existing rivals built premium positions for themselves.
Our “fundamental lack of understanding and relationships” with Asian consumers and potential counter parties, and complex tariffs and non-tariff barriers in most of these countries would combine to hobble export opportunities if our agricultural export agenda for the region was not significantly fine-tuned.
Food demand explosion
To feed Asia, food supplies from imports and internal production sources would need to grow 60pc.
Within 30 years 5.5 billion people would live in the region and 85 per cent of global growth in middle class incomes (and more selective buying habits) would be in countries such as China, Indonesia, India, Thailand and Malaysia.
In order to make the most of Australia’s relatively modest capacity to service burgeoning Asia’s hunger, Mr Ferguson said agribusiness had to get much better at targeting premium markets and understanding Asian people.
It was positive the Australian red meat industry had realised the value of strategically pushing the Australian brand with its “True Aussie” beef, lamb and goat branding programs, but this only scratched the surface of what could be achieved on an industry-wide scale.
Australia's agricultural future is now well and truly connected to Asian markets and will remain so for many decades, if not forever..
“We need to recognise the market power is now in Asian consumer’s hands,” said Mr Ferguson who heads the Asia Society in Australia.
“We need to build new language and cultural skills and relationships that can sustain the growth we want to achieve in partnering with Asia.
“We must change our negative attitudes towards Asian foreign investment and work skillfully and respectfully with Asian government regulators on resolving tariff and non tariff issues.”
Meanwhile, to enhance exporting practicalities, much could be done to harness digital technology to help simplify the logistics and maintain the integrity of food exports via a “single window” trade information platform.
This single point would allow a company to lodge all data required by government agencies, enabling seemless approval of all electronic of trade licensing and approvals and customs declarations.
Focus on what’s important
Mr Ferguson said while other global markets would still be important to Australia, he believed we remained very focused on Europe and other traditional trade ties at the expense of potentially more rewarding Asian networks.
"Australia's agricultural future is now well and truly connected to Asian markets and will remain so for many decades, if not forever," he said.
His views have support from Australian Bureau of Agricultural and Resource Economics and Sciences, executive director Steve Hatfield-Dodds, who said unease among some export industries about putting all agriculture’s eggs in one basket, in Asia, should not be over-played.
He described Asia as “a very large basket” which simply could not afford to be ignored.
In reality, many of these markets were different, with different demands and preferences, even within specific countries like China.
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The story Brand Australia needs united support to win Asian markets first appeared on Farm Online.