Spreads in Australia

TRENDS

Nut and seed based spreads grew fastest at 3% in current retail value terms in 2017 due to consumers using the products differently from the traditional spread function. In particular, consumers have embraced nut and seed based spreads as an ingredient, increasingly used as a protein boost or a way to satisfy hunger cravings, particularly in smoothies. This has arisen from consumers’ growing awareness of the health benefits and high protein content of nuts, and has been encouraged by the growth of natural and/or health-focused nut and seed based spreads. These include Mayvers, owned by Healthfarm Fine Foods Pty Ltd, which has seen success in its range of nut and seed based spreads, comprising classic peanut butter as well as other nut and seed combinations including a range of almond spreads, tahini spreads and super spreads which contain a range of nuts and seeds. The company’s products are described on its website as “pure-state wholefood spreads” which are made from “100% pure, natural ingredients...which have simply been crushed, blended and bottled”.

COMPETITIVE LANDSCAPE

Bega Cheese Ltd was the leading player in spreads in 2017 with a 29% retail value share. The company’s substantial presence is due to the acquisition of a range of Kraft grocery products at the beginning of 2017, including the Kraft range of spreads. Since its acquisition, the Kraft branding has steadily been phased out due to the expiration of the Kraft branding licence by the end of 2017. The company held a dominant 82% retail value share of yeast-based spreads in 2017 through the iconic Vegemite brand in Australia. Vegemite has a strong association with Australia, and the retail value share of the company’s Vegemite brand has remained robust in the face of competition from premium and health-positioned yeast-based spreads, including Omegamite, owned by Nature’s Blend, and AussieMite, owned by AussieMite Pty Ltd. Bega Cheese also held a dominant 53% retail value share of nut and seed based spreads in 2017, transitioning to The Good Nut branding. Despite the dominance of the company in nut and seed based spreads, its retail value share has come under pressure due to the growth of health and wellness-positioned products, namely the Mayvers brand, owned by Healthfarm Fine Foods Pty Ltd.

PROSPECTS

Over the forecast period, retail value sales of spreads will decline at a 2% CAGR at constant 2017 prices, in contrast to positive 2% CAGR growth seen over the review period. Growth over the forecast period will be restrained by spreads with an association with sugar. This will be seen strongly in jams and preserves which will decline at a 5% CAGR at constant 2017 prices over the forecast period. Jams and preserves continue to be eaten mostly by older Australians, with a lack of entrants by younger consumers. As a result, without new innovations, the number of consumers eating jams and preserves will continue to decrease.

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