in-progress review draft market... · of interviews with industry participants and industry...
TRANSCRIPT
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TARGET MARKET OPPORTUNITIES IN ASIA FOR YOGHURT Part of Asia Market Success, April 2016
IN-PROGRESS REVIEW DRAFT Pre-release copy of significant commercial value to industry Document contains incomplete & in-progress research for comment For named reviewer/firm only; do not duplicate or distribute
RECIPIENT
FIRM
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IINNHHEERREENNTT LLIIMMIITTAATTIIOONNSS This work was commissioned by the Department of Agriculture and Food Western Australia (DAFWA), with funding through the State Government’s Royalties for Regions program and prepared by Coriolis. This work is based on secondary market research, analysis of information available or provided to Coriolis by our client, and a range of interviews with industry participants and industry experts. Coriolis have not independently verified this information and make no representation or warranty, express or implied, that such information is accurate or complete. Projected market information, analyses and conclusions contained herein are based (unless sourced otherwise) on the information described above and on Coriolis’ judgement, and should not be construed as definitive forecasts or guarantees of future performance or results. Neither Coriolis nor its officers, directors, shareholders, employees or agents accept any responsibility or liability to readers or recipients of this report other than DAFWA or people other than DAFWA who rely upon it (described below as Recipients) with respect to this document. Coriolis wishes to draw Recipients’ attention to the following limitations of the Coriolis document “Target Market Opportunities in Asia for the Western Australian Premium Products” (the Coriolis Document) including any accompanying presentation, appendices and commentary (the Coriolis Commentary): a. Coriolis has not been asked to independently verify or audit the information or material provided to it by or on behalf of the Client or any of the parties involved in the project; b. the information contained in the Coriolis Document or any Coriolis Commentary has been compiled from information and material supplied by third party sources and publicly available information which may (in part) be inaccurate or incomplete; c. Coriolis makes no representation, warranty or guarantee to Recipients, whether express or implied, as to the quality, accuracy, reliability, currency or completeness of the information provided in the Coriolis Document and any Coriolis Commentary or that reasonable care has been taken in compiling or preparing them; d. the analysis contained in the Coriolis Document and any Coriolis Commentary are subject to the key assumptions, further
qualifications and limitations included in the Coriolis Document and Coriolis Commentary, and are subject to significant uncertainties and contingencies, some of which, if not all, are outside the control of Coriolis; and e. any Coriolis Commentary accompanying the Coriolis document is an integral part of interpreting the Coriolis document. Consideration of the Coriolis document will be incomplete if it is reviewed in the absence of the Coriolis Commentary and Coriolis conclusions may be misinterpreted if the Coriolis document is reviewed in absence of the Coriolis Commentary. Coriolis is not responsible or liable in any way for any loss or damage incurred by any person or entity other than DAFWA relying on the information in, and the Recipient unconditionally and irrevocably releases Coriolis from liability for loss or damage of any kind whatsoever arising from, the Coriolis document or Coriolis Commentary including without limitation judgements, opinions, hypothesis, views, forecasts or any other outputs therein and any interpretation, opinion or conclusion that the Recipient may form as a result of examining the Coriolis document or Coriolis Commentary. The Coriolis document and any Coriolis Commentary may not be relied upon by the Recipient, and any use of, or reliance on that material by the Recipient is entirely at their own risk. Coriolis shall have no liability for any loss or damage arising out of any such use. AACCCCEESSSSIIBBIILLIITTYY Coriolis seeks to support the widest possible audience for this research. This document has been designed to be as accessible to as many users as possible. Any person – with or without any form of disability – should feel free to call the authors if any of the material cannot be understood or accessed. We welcome the opportunities to discuss our research with our readers and users. All photos used in this discussion document were either (1) purchased by Coriolis from a range of stock photography providers as documented, (2) received written permission to use Southern
Forest Food Council photo or (3) are low resolution, complete product/brand for illustrative purposes used under fair dealing/fair use for both “research and study” and “review and criticism”. Our usage of them complies with Australian law or their various license agreements (© Dollar Photo Club). CCOOPPYYRRIIGGHHTT Copyright © Western Australian Agriculture Authority, 2016 IIMMPPOORRTTAANNTT DDAAFFWWAA DDIISSCCLLAAIIMMEERR The Chief Executive Officer of the Department of Agriculture and Food and the State of Western Australia and their employees and agents (collectively and individually referred to below as DAFWA) accept no liability whatsoever, by reason of negligence or otherwise, arising from any use or release of information in this report or any error, inaccuracy or omission in the information. DAFWA does not make any representations or warranties about its quality, accuracy, reliability, currency, completeness or suitability for any particular purpose. Before using the information, you should carefully evaluate these things. The information is general in nature, is not tailored to the circumstances of individuals or businesses, and does not constitute financial, taxation, legal, business or management advice. We recommend before making any significant financial or business decisions, you obtain such advice from appropriate professionals who have taken into account your individual circumstances and objectives. The information in this report should not be presumed to reflect or indicate any present or future policies or decisions by the Government of Western Australia.
2
FFIINNAALL vv110000;; AApprriill 22001166
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SCREENING OVERVIEW In Phase One of the Target Market Opportunities in Asia for WA Premium Products Report (TMO Report), extensive import/export trade data was fed through a multi-stage screening process to “hone-in” on potential opportunities for Western Australia; stakeholder interviews also fed into this process
3
STRUCTURE OF MULTI-STAGE SCREENING PROCESS USED IN THIS PROJECT Model; 2016
INDIVIDUAL FIRM ROLE & RESPONSIBILITY STAGE I STAGE II STAGE III STAGE IV
PLATFORM PRODUCT POSITIONING TARGET MARKET
FIT WITH WA
WA INDUSTRY-GOOD RESEARCH
9 PLATFORMS
679 TRADE CODES
47 QUAL/QUANT
SCREENS
Project does not attempt to address firm-level operational or executional activities: - R&D
- Product development
- Sourcing & supply chain
- Production & operations
- Marketing & branding
- Sales & sales structure
- Capital structure
- Negotiation
- Distributor appointment
20 OPPORTUNITIES
YOU ARE
HERE
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4 This project is focused on “market demand” from the following twenty-four Asian/Middle Eastern markets
Note: Complete list for analysis purposes, some countries excluded from list if no/limited trade data available (e.g. Iran)
24 COUNTRIES DEFINED AS HIGH POTENTIAL TARGET MARKETS FOR WESTERN AUSTRALIA Target markets; 2015
MIDDLE EAST
Bahrain Egypt Israel
Jordan Kuwait
Lebanon Oman Qatar
Saudi Arabia UAE
24 defined target markets for this project
4
SOUTH ASIA
India Pakistan Sri Lanka
Western Australia
SE ASIA
China Hong Kong
Japan South Korea
Taiwan Indonesia Malaysia
Philippines Singapore Thailand Vietnam
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PRODUCT PROFILE
HS Code 040310
Product Yoghurt, whether or not concentrated or containing added sugar or other sweetening material or flavoured or containing fruit
Out-of-scope Milk, cream, buttermilk, curdled milk and cream, other dairy products
Origin Neolithic period in Central Asia
Example ingredients
Pasteurised Skimmed Cows' Milk, Live Active Yoghurt Cultures (L. Bulgaricus, S. Thermophilus, L. Acidophilus, Bifidus, L. Casei)
Forms/usage - Drinking yoghurt; range of fruit flavours
- Savoury condiment, ingredient in cooking
- Snack on its own
- Medicine for gut health
Drivers of consumer/market success
- Excellent source of calcium
- Positioned as key to digestive health
- Viewed as healthy snack for children
- Appeals to both Western and Asian palates
- Longer shelf life than fresh milk
WHAT IS THE PRODUCT? Yoghurt emerged in Phase I as one of twenty “high growth, high potential” opportunities for Western Australia; yoghurt is a cultured dairy product produced in either a drinkable form or as a spoonable product
5 Source: photo credit (Dollar Photo); Coriolis analysis
PRODUCT OVERVIEW Example; 2015
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DOCUMENT STRUCTURE
What is the strategic situation in the market?
In this environment, what is the opportunity for Western Australia?
Who are the potential in-market partners?
Who are the key firms in Western Australia capable of delivering?
6
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Western Australia is well-positioned to grow yoghurt exports to Asia
7
- Asian yoghurt imports are expanding, with import value growth being driven by rising volumes and increased average FOB (free-on-board) prices
- Asian & Middle Eastern yoghurt imports primarily come from Europe, Australasia, Thailand and other Asia
- Thailand, Australia and the Netherlands stand out for driving yoghurt trade value growth in Asia & the Middle East
- Thailand and the Netherlands are driving growth
- Average FOB price to target Asian markets vary by supplier, with the Netherlands, New Zealand and the UK standing out for achieving good premiums
- Yoghurt goes – in any quantity – to four key markets in Asia/Middle East: Singapore, China, the Philippines and Hong Kong
- Imports are growing across multiple markets, however Hong Kong and China stand out for driving growth
- The Philippines stand out for creating growth over the past five years, followed by China, the UAE, Hong Kong, Vietnam and Singapore
- Average yoghurt import prices vary by market: China and Hong Kong pay more; Singapore pays average prices; Vietnam and the Philippines stand out as low value markets
- Imported yoghurt consumption appears unrelated to income outside the rich city states (HK, Singapore and UAE); China may have upside off a very low base
- Market share varies by country; European countries stronger in Middle East than E/SE Asia; Thailand strong in Philippines, Vietnam and Singapore; Australia strong is SE Asia
- Western Australia has opportunities for yoghurt export growth in select markets across East & South-East Asia
- Data supports new high value, premium yoghurt opportunities being initially launched in (1) Singapore, (2) Hong Kong and (3) China
- As a “Straw Man” for discussion, we identify an export market roll-out plan
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Asian yoghurt imports are expanding, with import value growth being driven by rising volumes and increased average FOB (free-on-board) prices
0
10
20
30
40
50
60
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
8 * Compound Annual Growth Rate; Source: UN Comtrade database; Coriolis analysis and classifications
VOLUME T; 000; 2004-2014
$-
$0.50
$1.00
$1.50
$2.00
$2.50
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
AVERAGE PRICE PER KILOGRAM US$; 2004-2014
$-
$20
$40
$60
$80
$100
$120
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
2012
2013
2014
VALUE US$m; 2004-2014
CAGR* 17%
CAGR 4%
CAGR 21%
TOTAL IMPORTS TO ASIA/MIDDLE EAST TARGET REGION (24 COUNTRIES)
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Asian & Middle Eastern yoghurt imports primarily come from Europe, Australasia, Thailand and other Asia
9 NA/ME/CA = North Africa/Middle East/Central Asia; Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
EXPORT VALUE BY SUPPLIER TO TARGET REGION US$m; FOB; 2014
Australasia
Other
Europe USA E/SE Asia
$39 $5 $5 $33 $20
United Kingdom $12
Switzerland $10
Greece $2
Australia $17
New Zealand $3
Netherlands $12
Other E/SE Asia $7
Thailand $25
Other $3
Other Europe $3
USA $5
Israel $2
TOTAL = US$101m
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Thailand, Australia and the Netherlands stand out for driving yoghurt trade value growth in Asia & the Middle East
10 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
EXPORT VALUE BY SUPPLIER TO TARGET REGION US$m; FOB; 2004-2014
2014
Other
2013
United Kingdom
2005 2004
New Zealand
Other E/SE Asia
Australia
10y ABS
Netherlands
Switzerland
USA
2006 2010
Other Europe
2009
Thailand
2012
Israel
2011 2008 2007
Greece
$0
$36
$12
$2
$1
$25
$7 $8
$28
$8
$2
$4
$17
$6
$7
$17
$17
$3 $7 $7
$2 $11
$10
$5
$2
$4
$13
+$5
+$2
$15
+$23
+$2
+$9
+$11
+$3 +$2
$77
$50
$104 $105
$38
$24
$19
$32
$36
+$12
$5 $3
$3
$3
$8
$1
$3
$2
$6
+$12
$3
+$4
+$2
$4
$4
$5
$5
$101
$5
$2
$1 $0
$10 $2
$2
$0
$10
$1 $2
$3
$9
$3
$3
$5
$0
$3
$0 $1
$0 $1
$5
$0
$0
$0
$1
$5
$1
$0
$0
$12
$0
$1
$1
$1 $1
$1
$2
$2
$2
$0
$6
$2
$1
$0
$2 $2
$0
$2
$10
$1 $0
$4
$2
$2 $1 $6
$7
$8
$2
$4
$3
$1
$2
$6
$10
$6 $5
$1
$2
$7
$3
$2
$5
$9
$8
$5
$8
$0
$4
$0
$13
$4
$6
$1
$8 $3
CAGR 21%
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Thailand and the Netherlands are driving growth
11 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
FIVE YEAR EXPORT GROWTH MATRIX: CHANGE IN VALUE VS. RATE OF GROWTH VS. ABSOLUTE VALUE US$m; 2009 vs. 2014
$20 $15 -40%
$25 $10 $-5 $-10 $5 $0
-20%
120%
100%
160%
140%
80%
20%
0%
60%
40%
Israel
USA
Australia
$5m
New Zealand
Other
Switzerland Other Europe
Greece
Netherlands
Other E/SE Asia
Thailand
United Kingdom
5y absolute change in value
5y CAGR
Bubble scale: US$m; 2014 A bubble this size=
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Average FOB price to target Asian markets vary by supplier, with the Netherlands, New Zealand and the UK standing out for achieving good premiums
12 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
AVERAGE EXPORT VALUE COST CURVE BY SUPPLIER US$/kg; t; FOB; 2014
Switzerland
Australia
Greece
New
Zealand
USA
UK
Other E/SE Asia Thailand Israel
Other Europe
Other
Netherlands
$5.77
$2.49
$1.54 $1.16
$3.08
$7.33 $13.0
4
$3.40
$6.02
$1.76
$4.11
$2.47
Average FOB
value
Volume imported by defined target market
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Yoghurt goes – in any quantity – to four key markets in Asia/Middle East: Singapore, China, the Philippines and Hong Kong
13 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
IMPORT VALUE BY MARKET BY REGION US$m; FOB; 2014
NA
/ME/C
A
East Asia
Indian Sub
SE Asia
China $20
$0 $48 $35
Other $1
Other $0
$18
Israel $2
Egypt $0
Singapore $21
India $0
Saudi Arabia $2
Bahrain $1
United Arab Emirates $9
Kuwait $1
Qatar $2
South Korea $1
Japan $1
Hong Kong SAR $13
Taiwan $1
Vietnam $4
Thailand $1
Malaysia $3
Indonesia $1
Philippines $18
TOTAL = US$101m
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Imports are growing across multiple markets, however Hong Kong and China stand out for driving growth
14 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
IMPORT VALUE BY MARKET BY REGION US$m; FOB; 2004-2014
Bahrain
China
2005 2012
Taiwan
2013 2004
Other ME
Indonesia
Thailand
Philippines
2008
Egypt
2009
Japan
2010 2006
Qatar
2011 2007
India
Kuwait
Malaysia
2014
South Korea
Saudi
Hong Kong SAR
Vietnam
UAE
Singapore
Other Ind. Sub
Israel
$2 $4
$0
$2
$1
$50
$0
$3
$38
$1
$14
$4
$3
$104
$1
$1 $1
$4
$105
$1
$2
$4
$2 $1
$7
$1
$2
$101
$1
$77
$1
$7
$1
$4
$0
$1 $1
$1
$1
$1
$11 $1
$2
$2
$1
$2
$2
$2
$1
$1 $1
$0 $2
$1
$1 $0 $0
$14
$24
$36
$32
$4
$0
$11
$0
$0
$0
$15
$0
$1
$20
$0 $0 $0
$0
$13
$19
$1
$2
$0
$1
$1
$1
$0
$0 $0
$0
$0
$0
$0
$1
$2 $2
$1
$1
$0
$0
$0
$0
$10 $2 $10
$8
$13
$3
$1
$1
$0
$1
$0
$0
$0
$0
$0
$3
$8 $4
$0
$0 $0
$0
$0
$9
$0
$1
$1
$0
$0
$0 $2
$2
$1
$0
$1
$6 $8
$3
$2
$2
$1
$1
$1
$0
$2
$2
$3
$2
$2 $0
$1
$0
$0
$0
$1
$0
$1
$1
$0
$0
$0
$1 $0
$0
$0
$0
$2
$1
$2
$0
$0
$1
$1
$1 $1
$2
$3
$0
$3
$3
$2
$0
$2 $2 $2
$1
$1
$1
$1
$2
$2
$2
$2 $1
$5
$0 $3
$16
$18
$11
$3
$8
$0
$0
$0
$0 $0
$0
$0
$0
$0
$0 $1
$2
$1
$0
$0
$0
$0
$0
$1
$0
$0 $16
$20
$13
$8
$10
$1
$1
$21
$43
$27
$0
$1
$0
$0 $0
$6
$7
$6
$1
$0
CAGR 13%
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Bubble scale: US$m; 2014 A bubble this size=
The Philippines stand out for creating growth over the past five years, followed by China, the UAE, Hong Kong, Vietnam and Singapore
15 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
FIVE YEAR IMPORT GROWTH MATRIX: CHANGE IN VOLUME VS. RATE OF GROWTH VS. ABSOLUTE VALUE US$m; t; 2009 vs. 2014
12,000 14,000 -4,000 -2,000 2,000 6,000 4,000 0 10,000 8,000 16,000
60%
-20%
80%
20%
40%
0%
120%
-40%
100%
$10m
Egypt
United Arab Emirates
South Korea
Japan
Jordan
Malaysia
Kuwait
Lebanon
China
Bahrain
Sri Lanka
Israel
Hong Kong SAR
Indonesia
Vietnam
Saudi Arabia
Qatar
Singapore
India
Pakistan
Oman
Taiwan
Philippines Thailand
5y absolute change in volume
5y CAGR
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Average yoghurt import prices vary by market: China and Hong Kong pay more; Singapore pays average prices; Vietnam and the Philippines stand out as low value markets
16 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
AVERAGE IMPORT VALUE COST CURVE BY MARKET/REGION US$/kg; t; FOB; 2014
Indonesia
Qatar
Vietnam
China
Bahrain
Malaysia
Singapore
Om
an
Thailand
Lebanon
Jordan
India
UA
E
Kuw
ait
Saudi Arabia
Sri Lanka
Japan
Hong Kong
South Korea
Philippines
Taiw
an
Egypt
Israel
Pakistan
$3.63
$2.94
$2.80
$1.80
$6.99
$2.67
$4.92
$4.12
$9.41
$1.07
$5.50
$4.54
$2.77
$1.09
$4.24
$3.27
$5.10
$4.14
$3.49
$3.91
$4.18
$3.44
$3.13 Volume imported
Average import
value
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Imported yoghurt consumption appears unrelated to income outside the rich city states (HK, Singapore and UAE); China may have upside off a very low base
17 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Wikipedia (GDP/capita); Coriolis analysis and classifications
MARKET SIZE DRIVERS: GDP PER CAPITA VS. IMPORTS PER CAPITA VS. MARKET SIZE US$; kg; kg/000; 2014
$60,000 $20,000 $10,000 $0 $50,000 $40,000 $30,000
1.2
0.8
0.4
1.0
0.6
0.2
0.0
1.4
South Korea
Jordan
Kuwait Malaysia Taiwan
Lebanon Japan
Sri Lanka
China
1,000
Bahrain Israel
Hong Kong SAR
Indonesia
Vietnam
Qatar
Thailand
Saudi Arabia
Singapore
India
Egypt
Oman Pakistan
United Arab Emirates Philippines
GDP per capita
Imports per capita (kg)
Size of bubble = total kilograms (000)
A bubble this size=
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Market share varies by country; European countries stronger in Middle East than E/SE Asia; Thailand strong in Philippines, Vietnam and Singapore; Australia strong is SE Asia
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Bahrain
Israel
Jordan
Kuw
ait
Lebanon
Om
an
Qatar
Saudi Arabia
Egypt
Taiw
an
United A
rab Emirates
Philippines
Pakistan
China
Japan
Vietnam
India
South Korea
Hong K
ong SAR
Malaysia
Indonesia
Singapore
Thailand
Sri Lanka
Thailand
Other E/SE Asia
Israel
Other
Other Europe
Greece
Switzerland
United Kingdom
Netherlands
USA
New Zealand
Australia
18 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
IMPORT VALUE MARKET SHARE BY MARKET BY KEY SUPPLIER % of value in US$m; FOB; 2014
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Western Australia has opportunities for yoghurt export growth in select markets across East & South-East Asia
19 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
AUSTRALIAN IMPORT VALUE MARKET VS. MARKET VALUE US$m; FOB; 2014
Qatar
Indonesia
Sri Lanka Taiw
an
Vietnam
Philippines Singapore
Israel
Malaysia
Saudi
Bahrain
Egypt
Om
an
UA
E
South Korea
India
Japan
Hong K
ong SAR
Pakistan
China
Jordan
Kuw
ait Lebanon
Thailand
7%
26%
2%
15%
3%
5%
0%
0%
0%
0%
0%
0%
42%
44%
22%
65%
44
%
0%
97%
0%
0%
0%
8%
Total value of imports
Australian market share
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Size of bubble = value A bubble this size=
Data supports new high value, premium yoghurt opportunities being initially launched in (1) Singapore, (2) Hong Kong and (3) China
20 Note: data is as reported by sender (FOB), not receiver; Source: UN Comtrade database; Coriolis analysis and classifications
WHERE TO FOCUS FOR NEW HIGH VALUE, PREMIUM PRODUCTS: AU SHARE VS. AVERAGE VALUE VS. MARKET SIZE % of value; US$; US$m; 2014
60% 70% 20% 10% 0% 50% 40% 30%
$3.00
$2.00
$1.00
$6.00
$5.00
$4.00
$0.00
Malaysia
Singapore
South Korea
Hong Kong SAR Indonesia
Thailand
Vietnam
China
$20
Sri Lanka
Oman
UAE
Qatar
Saudi
Lebanon
India
Bahrain
Taiwan
Pakistan
Jordan
Egypt
Israel
Japan
Kuwait
AU share of total import value
VALUE Average
FOB $/kg 2014 1
2
3
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As a “Straw Man” for discussion, we identify an export market roll-out plan
21
PRELIMINARY “STRAW MAN” DEVELOPMENT & ROLLOUT PLAN FOR APPLE OPPORTUNITY Model; 2016
1 Export launch in Singapore
2 Export launch in Hong Kong
3 Export launch in China
0 Product development and testing
- High income, sophisticated market and consumers
- Manageable sized test bed - WA already has a very strong
market position - WA is market leader and
should, therefore, lead
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DOCUMENT STRUCTURE
What is the strategic situation in the market?
In this environment, what is the opportunity for Western Australia?
Who are the potential in-market partners?
Who are the key firms in Western Australia capable of delivering?
22
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Western Australia is well-positioned to grow premium yoghurt exports to select markets in Asia
23
IS THE MARKET DEVELOPED & COMPETITIVE?
- The flow of yoghurt from the farm through to the consumer is relatively straight forward and simple
- Yoghurt prices are competitive in Asia
- Asian markets have a much more developed probiotic drink range and offer than western countries
- “Leading indicator” Western markets strongly suggest depth of yoghurt range in Asian markets will increase going forward
- Spoonable appears to have more range upside than drinking yoghurt
WHAT IS WA CAPABLE OF DELIVERING?
- A range of premium, value-adding product attributes emerged from our cross-country retailer survey
- Western Australian yoghurt producers need to continue to move forward and improve through new products
- Multiple potential positions exist to develop a premium yoghurt offer for Asia
- Products from other processors in other markets demonstrate what is possible in terms of developing a premium Western Australian yoghurt offer
- There are a wide range of potential product positions or claims available for a premium yoghurt product from Western Australia targeting Asia
- As a “Straw Man” for discussion, we identify an opportunity for a high value, premium yoghurt product with select characteristics for export market launch
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24 Source: Coriolis
SIMPLIFIED MODEL OF SUPPLY CHAIN: YOGHURT Model; 2016
Retailers
Foodservice & Institutional
Exports
Wholesalers
Distributors (refrigerated)
Domestic Manufacturers
Agent/Broker/ Distributor
Manufacturer Own Sales/Marketing
Other ingredients & packaging
Logistics Providers
(Airfrieght, Seafreight, Trucking)
WA Yoghurt Manufacturer
Other Australian Manufacturer
WA Dairy Farmer
Swiss Yoghurt Manufacturers
German Yoghurt Manufacturers
Malaysian Yoghurt Manufacturers
Thai Yoghurt Manufacturers
Manufacturers in 26 other countries
Milk/Milk Powder Imports
Global dairy suppliers
HOW IS THE MARKET STRUCTURED? The flow of yoghurt from the farm through to the consumer is relatively straight forward and simple
This stage branches and adds multiple layers in large markets
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WHO IS THE COMPETITION? PRICING Yoghurt prices are competitive in Asia
$4.12
$8.58
$12.65
$3.34
$7.04 $7.91
$5.71
$8.34
$12.04
$23.09
$8.67
$10.80 $11.98 $12.19
$13.50
Dutchie G
reek Manuka
Honey (T
H)
Yoplait M
ango (US/FR)
Dairy Farm
ers T&
C
Mango &
Pass (AU
)
Nestle Fat Free M
ango (C
H)
Nestle G
reek Style Peach (C
H)
Emm
i Swiss Prem
ium
Berry (CH
)
Meiji H
igh Calcium
LoFat Berry (JP)
Emm
i Swiss Prem
ium
Berry (CH
)
Dairy Farm
ers T&
C
Yellow
Box Honey (A
U)
Fage Total H
oney (GR)
Jalna Premium
C
afé Latte (AU
)
Allure by T
empo
Mango &
Pass (AU
)
Tam
ar Valley M
ango (A
U)
Mundella Raspberry
(AU
)
Gippsland T
wist
Passionfruit (AU
)
25 Source: Coriolis from store checks
SHELF PRICE PER KG ACROSS SELECT SE ASIAN MARKETS AND AUSTRALIA: YOGHURT US$/kg; Feb 2016
SELECT SE ASIAN RETAILERS AUSTRALIA
AU AU
Malaysia Thailand Singapore
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WHAT IS ON THE SHELF? RANGE IN MARKET Asian markets have a much more developed probiotic drink range and offer than western countries
26 Source: Coriolis from store checks; photo credit (fair use/fair dealing; low resolution; complete product/brand for illustrative purposes); Coriolis analysis
EXAMPLE: ACTUAL PROBIOTIC DRINK RANGE ON SHELF Feb 2016
Kuala Lumpur: GDP/Capita US$24,963 Australia: GDP/Capita US$61,887
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IS THE MARKET DEVELOPED & COMPETITIVE? RANGE “Leading indicator” Western markets strongly suggest depth of yoghurt range in Asian markets will increase going forward
417 414 411
325
234
189 173 165
98 93
40 37
Sainsbury (UK)
Wegmans (NY)
Tesco (UK)
Waitrose (UK)
Coles (AU)
Woolworths (AU)
Tesco (MY)
Tesco (TH)
Cold Storage (SG)
Wellcome (HK)
Park'N Shop (HK)
Fairprice (SG)
27 Source: Coriolis from store checks
NUMBER OF LINES ON SHELF: SELECT RETAILERS FROM ACROSS MULTIPLE MARKETS SKU; actual; Feb 2016
SE Asia Anglo-American
Average 102 sku/store
Average 332 sku/store
3 x
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IS THE MARKET DEVELOPED & COMPETITIVE? SEGMENTATION Spoonable appears to have more range upside than drinking yoghurt
15
7
15
13
86
66
6
4
28
51
25
39
Fairprice (SG)
Park'N Shop (HK)
Wellcome (HK)
Cold Storage (SG)
Tesco (TH)
Tesco (MY)
Woolworths (AU)
Coles (AU)
Waitrose (UK)
Tesco (UK)
Wegmans (USA)
Sainsbury (UK)
28 Source: various online stores; Coriolis analysis
NUMBER OF LINES ON SHELF BY FORM: SELECT RETAILERS FROM ACROSS MULTIPLE MARKETS SKU; actual; Feb 2016
22
33
78
85
82
107
183
230
297
360
389
378
DRINKING SPOONABLE
SE A
sia
Ang
lo-A
mer
ican
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IS THE MARKET DEVELOPED & COMPETITIVE? PRODUCT ATTRIBUTES A range of premium, value-adding product attributes emerged from our cross-country retailer survey
23%
19%
11%
9%
8%
7%
6%
3%
3%
2%
2%
2%
2%
1%
1%
Fat free & low fat
Greek
Organic
Kids
Natural
Probiotic
Calcium
Pouch/tube
No artificial additives
Flip top
Thick & creamy
Honey flavoured
Country
Toppers
Lactose Free
29 Source: Coriolis from store checks
PERCENT OF OBSERVED PRODUCTS ON SHELF MAKING THE CLAIM ON PACK % of SKU; N=1932; Feb 2016
- This provide very clear instruction on what product attributes are succeeding the most across markets
- Western Australian yoghurt producers looking to grow value and share should focus in these areas
- Fat free and low fat stand out, with almost 1/4 observed product SKU being labelled either Fat free or low fat styles of yoghurt
- Survey universe is all products in all listed retailers (across multiple countries)
TAKEAWAYS
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WHAT IS WA CAPABLE OF DELIVERING? STRATEGIC DIRECTION Western Australian yoghurt producers need to continue to move forward and improve through new products
30
SUGGESTED STRATEGIC DIRECTION: WESTERN AUSTRALIAN YOGHURT Model; 2016
Plain yoghurt Everyday
flavoured family packs
Organic
WA suppliers are here in Asia
High growth, high potential opportunities
are here
USA & UK suppliers are here
Single serve packs Premium regional
ingredients Flavour layer Flip packs
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WHAT IS WA CAPABLE OF DELIVERING? CLAIMS Multiple potential positions exist to develop a premium yoghurt offer for Asia
31 Source: Coriolis; photo credit (Dollar Photo and Southern Forests Food Council Inc.)
IDENTIFIED POTENTIAL PREMIUM POSITIONS Model; 2016
HEALTH PROVENANCE INDULGENCE CONVENIENCE
Low/no fat Organic Rich/creamy (Greek/high fat) Single serve
Probiotics/Prebiotics Free range Puddings & desserts Squeezable/pouch
Low sugar/low GI Identified source region Big pots/packs Six pack lunch size
Dairy alternatives Identified cow breed Toppings/corners
High protein Track & trace Kid friendly characters
Superfoods Unique/named ingredients Indulgent ingredients
Unique styles
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WHAT IS WA CAPABLE OF DELIVERING? GLOBAL PEERS Products from other processors in other markets demonstrate what is possible in terms of developing a premium Western Australian yoghurt offer
32 Source: photo credit (fair use/fair dealing; low resolution; complete product/brand for illustrative purposes); Coriolis analysis
EXAMPLES OF PREMIUM PRODUCTS FROM OTHER MARKETS Select; 2016
No fat Gluten free No fat Single serve
Supporting family farms Traditionally made Protein Chocolate coated biscuit balls
Organic Fat free Fibre Digestive
Named source (Yeo Valley) Probiotic cultures Ready-to-drink
Bio Live Named source (West Cork) 4 single-serve bottles
Honey No added sugar “Light & Fit”
GM free Thick & luxurious
4 ready-to-eat pots 6 ready-to-eat pots
Tip-in corner
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WHAT IS A POTENTIAL WA OFFER? There are a wide range of potential product positions or claims available for a premium yoghurt product from Western Australia targeting Asia
33 Source: Coriolis; photo credit (Dollar Photo and Southern Forests Food Council Inc.)
HYPOTHETICAL EXAMPLE OF POTENTIAL PREMIUM PRODUCT FROM WA Model; 2016
HEALTH
PROVENANCE
INDULGENCE
CONVENIENCE
Contains Probiotics/Prebiotics
With Jarrah Honey
From the South-West Region
Organic Free-Range
“Happy Cows”
With Jarrah Honey
Single-serve
Plain yoghurt
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WHAT IS THE IDENTIFIED OPPORTUNITY? As a “Straw Man” for discussion, we identify an opportunity for a high value, premium yoghurt product with select characteristics for export market launch
34 Source: photo credit (fair use/fair dealing; low resolution; complete product/brand for illustrative purposes); Coriolis analysis
PRELIMINARY “STRAW MAN” DEVELOPMENT & ROLLOUT PLAN FOR YOGHURT OPPORTUNITY Model; 2016
CURRENT WA POSITIONING IN ASIA
IDENTIFIED HIGH GROWTH, HIGH VALUE OPPORTUNITY FOR WA
High in calcium
Active, probiotic
From Western Australia
Australian Flag
AU flavours
Single serve, 4 pack
Low fat
From Australia
POTENTIAL FUTURE PRODUCT LINE EXTENSION
Organic
Greek style Family pack Jarrah honey
Attractive packaging
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DOCUMENT STRUCTURE
What is the strategic situation in the market?
In this environment, what is the opportunity for Western Australia?
Who are the potential in-market partners?
Who are the key firms in Western Australia capable of delivering?
35
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FOCUS MARKET – 1 – SINGAPORE Singapore has a robust and well-developed food retailing and foodservice sector
$5.6
$3.9
$6.3
$1.9
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Turnover Purchases
36 Source: Coriolis from a wide range of sources
TURNOVER & PURCHASES US$b; 2014
ESTIMATED WHOLESALE FOOD & FMCG PURCHASES US$b; 2014
Foodservice Retail
$1.9 $3.9
Online $0.1
Traditional grocery $0.3
Supermarket $2.2
Convenience $0.4
Wet markets, etc. $0.7
Foodservice $1.9
Department stores $0.3
Petrol stations $0.1
Foodservice
Retail 6,500 restaurants,
hawker stalls, hotels, vending machines,
institutions (schools, hospitals, airline caterers,
prisons, etc.)
3.0%
5.0%
Retail
Foodservice
TURNOVER GROWTH RATE % Y-O-Y; S$; 2013v2014
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FOCUS MARKET – 1 – SINGAPORE Four potential in-market partners are identified for Western Australian firms in Singapore
Firm NTUC Fairprice Cold Storage Sheng Siong Prime Supermarkets
Ownership National Trade Union Council (Singapore)
Dairy Farm International (Hong Kong)
Listed; Singapore Private; Singapore
Website www.fairprice.com.sg www.ntuc.org.sg
www.coldstorage.com.sg www.dairyfarmgroup.com
www.shengsiong.com.sg www.allforyou.sg
www.primesupermarket.com
Annual sales US$1.83b US$1.55b US$0.55b US$0.2b
Store formats Supermarket Hypermarket Convenience (Cheers; 139) Online
Supermarket (Cold Storage, Marketplace) Hypermarket Convenience (7-Eleven; 502) Online
Supermarkets Online
Supermarkets
# of stores 285 848 38 19
Store fascia
37 Source: Coriolis from a wide range of sources
POTENTIAL IN-MARKET PARTNERS – SINGAPORE 2015 or as available
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FOCUS MARKET – 2 – HONG KONG Hong Kong has a robust and well-developed food retailing and foodservice sector
$11.5
$8.0
$12.8
$3.9
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Turnover Purchases
38 Source: Coriolis from a wide range of sources
TURNOVER & PURCHASES US$b; 2014
ESTIMATED WHOLESALE FOOD & FMCG PURCHASES US$b; 2014
Retail Foodservice
$3.9 $8.0
Foodservice $3.9
CRA $0.3 CRE
$0.2
Wellcome $1.2
AEON $0.6
Drug stores $0.6
Wet markets, etc. $3.0
ParknShop $1.5
Other retail $0.6
Foodservice
Retail 14,000+ restaurants 1,000+ bars & clubs
1,050+ hotels Vending machines
Institutions (1,088 schools, 42 hospitals, 3 main airline
caterers, prisons, etc.)
6.7%
3.5%
Retail
Foodservice
TURNOVER GROWTH RATE % Y-O-Y; HK$; 2013v2014
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FOCUS MARKET – 2 – HONG KONG Seven potential in-market partners are identified for Western Australian firms in Hong Kong
Firm Wellcome Park’N Shop CR Vanguard Dah Chong Hong 759 Stores AEON Stores Convenience Retail Asia
Ownership Dairy Farm International/Jardine Matheson
A.S. Watson/ Hutchison Whampoa
CRE/China Resources (SOE; China)
Dah Chong Hong/ CITIC Pacific/CITIC (SOE; China)
Private; Hong Kong (Lam Wai Chun)
AEON (Japan) Fung Group
Website www.wellcome.com.hk www.parknshop.com www.crvanguard.com.hk www.crc.com.cn
www.dch.com.hk
www.759store.com www.aeonstores.com.hk www.aeon.info
www.circlek.hk/en www.cr-asia.com
Annual sales (in HK)
$2.2b+ $2.8b ~$0.8b (food/FMCG) N/A N/A $0.8b $0.4b
Food store formats
Supermarkets 318 Convenience 921 Health & Beauty 369 Restaurants 676
Supermarkets 260+ Convenience
Supermarkets Convenience
Supermarkets Grocery 247+ Dept. stores (w/food) 8 Supermarkets 5
Convenience 600+ Bakery
# of stores Wellcome 280+ Marketplace 31 7-Eleven 900+ Olivers the Delicatessen ThreeSixty
ParknShop 175 PnS Superstore 50+ PnS Taste 10 PnS Fusion 14
CR Vanguard 100+ VanGo 79
DCH Food Mart 80+ DCH Food Mart Deluxe
759 Stores 247+ AEON 13 Circle K Saint Honore Cake
Store fascia
39 Source: Coriolis from a wide range of sources
POTENTIAL IN-MARKET PARTNERS – HONG KONG 2015 or as available
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FOCUS MARKET – 3 – CHINA China has a robust and well-developed food retailing and foodservice sector
$601
$421
$450
$135
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Turnover Purchases
40 Source: Coriolis from a wide range of sources
TURNOVER & PURCHASES US$b; 2014
ESTIMATED WHOLESALE FOOD & FMCG PURCHASES US$b; 2014
Foodservice Retail
Supermarkets $126
$135
Traditional $71
Online $8
Foodservice $135
Wet markets $143
$421
Hypermarkets $63
Convenience $8
Foodservice
Retail 7m+ restaurants plus bars & clubs,
hotels/motels/etc., vending machines,
institutions (schools, hospitals, airline
caterers, prisons, etc.)
6.0%
7.0%
Retail
Foodservice
TURNOVER GROWTH RATE % Y-O-Y; CNY; 2013v2014
PRELIMINARY
PRELIMINARY
PRELIMINARY
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FOCUS MARKET – 3 – CHINA Eighteen potential in-market partners are identified for Western Australian firms in China…
41 Source: Coriolis from a wide range of sources
POTENTIAL IN-MARKET PARTNERS – CHINA 2015 or as available
Firm CR Vanguard Sun Art Retail Group Wal-Mart China Lianhua Carrefour China Yonghui Superstores Nonggongshang
Ownership China Resources (SOE; China)
Listed; HK; Auchan and Ruentex group
Listed; USA Listed; HK; Bailian Group Co.
Listed; France Listed; Shanghai; Dairy Farm 20%; JD.com 10%;
China
Website www.crvanguard.com.hk www.crc.com.cn
www.sunartretail.com www.rt-mart.com.tw
www.wal-martchina.com www.samsclub.cn
lianhua.todayir.com
www.carrefour.cn www.carrefour.com.cn www.carrefour.com
www.yonghui.com.cn www.ngs1685.com
Annual sales Total/Food
US$15.2b (13) US$14.0b (14) US$11.0b (13) US$10.5b (13) US$7.1b (13) US$5.3b US$4.6b
Food store formats
Hypermarket Supermarket Convenience
Hypermarket Online
Hypermarket Warehouse Club Compact HM Supermarket
Hypermarkets Supermarket 4,600 Convenience 1,905
Hypermarket 236 Convenience 3 Online
Supermarket Supermarkets 2,644 Convenience 1,700
# of stores 4,637 264 423 6,900+ 239 351 2,644
Store fascia
- Alldays - Kedi
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FOCUS MARKET – 3 – CHINA … continued
42 Source: Coriolis from a wide range of sources
POTENTIAL IN-MARKET PARTNERS – CHINA 2015 or as available
Firm HNA Group Wumart Stores Better-Life Jiajiayue Group A. Best Supermarket Metro Cash & Carry Lotte Mart
Ownership Private; China Public; China Public; China Public; China Public; China Listed; Germany Listed; Korea
Website www.hnagroup.com/ www.wumart.com www.bbg.com.cn
www.jiajiayue.com.cn www.abest-xyj.com www.metro.com.cn www.metrogroup.de
www.lotte.co.kr
Annual sales Total/Food
US$4.0b (13) US$3.3b (13) US$3.2b (13) US$2.9b US$2.7b US$2.7b (13) US$2.4b (13)
Food store formats
Hypermarkets Supermarkets Convenience
Hypermarkets Convenience
Hypermarkets Department stores Online
Hypermarket Supermarket Department store Convenience
Hypermarket Supermarket
Cash & Carry Hypermarkets Supermarkets
# of stores 482 547 445 601 116 75 110
Store fascia
Le Wan Jia Supermarket Jiangsu Chaoyue Supermarket Hunan Joindoor Supermarket
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FOCUS MARKET – 3 – CHINA … continued
43 Source: Coriolis from a wide range of sources
POTENTIAL IN-MARKET PARTNERS – CHINA 2015 or as available
Firm Sinopec Group PetroChina Co. Dongguan Sugar & Liquor Group
Seven & I Holdings
Ownership Chinese government (SOE)
Chinese government (SOE)
Japan; listed
Website english.sinopec.com www.meiyijia.com.cn www.7-11.cn www.7andi.com www.sej.co.jp www.itoyokado.co.jp
Annual sales Total/Food
US$455b (14) US$49.1b US$17.5b
Food store formats
Easy Joy uSmile Meiyijia Seven&I 301 Area licensees 1,763 - DairyFarm 740 - Others ~1,063
# of stores 23,300 14,000 5,580 2,064
Store fascia
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DOCUMENT STRUCTURE
What is the strategic situation in the market?
In this environment, what is the opportunity for Western Australia?
Who are the potential in-market partners?
Who are the key firms in Western Australia capable of delivering?
44
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IDENTIFIED WA COMPANIES
BANNISTER DOWNS DAIRY
BROWNES DAIRY
HARVEY FRESH
ADDRESS: Muirillup Road, Northcliffe WA 6262 ADDRESS: 22 Geddes Street, Balcatta, WA 6021 ADDRESS: Lot 4, Third Street, Harvey, WA 6220
PHONE: 08 9776 4555 PHONE: 08 9441 7777 PHONE: 08 9729 0600
WEBSITE: www.bannisterdowns.com.au WEBSITE: www.brownesdairy.com.au WEBSITE: www.harveyfresh.com.au
45 1. article; Sources: Coriolis from a wide range of sources
LION DAIRY & DRINKS
MARGARET RIVER DAIRY CO.
MARGARET RIVER ORGANIC CREAMERIES
ADDRESS: 86 Radium St, Bentley, WA 6102 ADDRESS: 8063 Bussell Hwy, Metricup, WA 6280 ADDRESS: Jindong Treeton Rd, Treeton, WA 6284
PHONE: 08 9333 2888 PHONE: 08 9755 7588 PHONE: 08 9751 3117
WEBSITE: www.lionco.com WEBSITE: www.margaretriverdairy.com.au WEBSITE: www.margaretriverorganiccreameries.com
MUNDELLA FOODS
ADDRESS: 46 Randell Road, Mundijong, WA 6123
PHONE: 08 9525 5754
WEBSITE: www.mundellafoods.com.au
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AUSTRALIA Coriolis Australia Pty Ltd
PO Box 5831 St Georges Terrace
Perth, WA 6831 Australia
+61 8 9468 4691
NEW ZEALAND Coriolis (New Zealand) Limited
PO Box 90-509 Victoria Street West
Auckland, 1142 New Zealand
+64 9 623 1848
www.coriolisresearch.com
Coriolis is the leading Australasian management consulting firm specialising in the wider food value chain. We work on projects in agriculture, food and beverages, consumer packaged goods, retailing & foodservice. In other words, things you put in your mouth and places that sell them. WHERE WE WORK We focus on the Asia Pacific region, but look at problems with a global point-of-view. We have strong understanding of, and experience in, markets and systems in Australia, China, Japan, Malaysia, New Zealand, Singapore, South Korea, Thailand, the United Kingdom and the U.S. We regularly conduct international market evaluations and benchmarking. WHAT WE DO We help our clients assemble the facts needed to guide their big decisions. We develop practical, fact-based insights grounded in the real world that guide our clients decisions and actions. We make practical recommendations. We work with clients to make change happen. We assume leadership positions to implement change as necessary. HOW WE DO IT All of our team have worked across one-or-more parts of the wider food value chain, from farm-to-plate. As a result, our recommendations are grounded in the real world. Our style is practical and down-to-earth. We try to put ourselves in our clients’ shoes and focus on actions. We listen hard, but we are suspicious of the consensus. We provide an external, objective perspective. We are happy to link our fees to results. WHO WE WORK WITH We only work with a select group of clients we trust. We build long term relationships with our clients and more than 80% of our work comes from existing clients. Our clients trust our experience, advice and integrity.
Coriolis advises clients on growth strategy, mergers and acquisitions, operational improvement and organisational change. Typical assignments for clients include… FIRM STRATEGY & OPERATIONS We help clients develop their own strategy for growing sales and profits. We have a strong bias towards growth driven by new products, new channels and new markets. MARKET ENTRY We help clients identify which countries are the most attractive – from a consumer, a competition and a channel point-of-view. Following this we assist in developing a plan for market entry and growth. VALUE CREATION We help clients create value through revenue growth and cost reduction. TARGET IDENTIFICATION We help clients identify high potential acquisition targets by profiling industries, screening companies and devising a plan to approach targets. DUE DILIGENCE We help organisations make better decisions by performing consumer and market-focused due diligence and assessing performance improvement opportunities. EXPERT WITNESS We provide expert witness support to clients in legal cases and insurance claims. We assist with applications under competition/fair trade laws and regulations.