Australian food not quashed by recession

By staff reporter

- Last updated on GMT

Related tags Cent Food

Australians have not been trading down to the same extent as Europeans, says a new report from Leatherhead on the effects of recession on food choices.

In Europe, consumers keeping a close eye on grocery bills have tended to switch to cheaper own label brands. Innovation in own brand goods have meant the switch out may not mean a compromise over quality.

In Australia, however, own label is not as well developed – although the market researcher says it “has been a growing feature of the market”.​ In bread and morning goods it currently holds 24 per cent of the value share; in cakes 18 per cent; in sugar confectionery 13 per cent and savoury snacks 12 per cent.

But many key food sectors reported growth in 2008 overall, and estimates for 2009 are also positive, Leatherhead said in its new report Global Food Markets​. This is because total consumer expenditure has not dropped to the same level as in other countries.

In 2008 private consumption expenditure grew by 2.2 per cent in Australia, compared to 0.3 per cent in Europe. In 2009 Australia saw growth of 1.3 per cent, compared to shrinkage of 1.3 per cent in Europe.


Food sectors that have seen particularly good performance include chocolate, which saw sales up 6.1 per cent in 2008 and predictions of 3.9 per cent growth in 2009. Premium chocolates and boxed and bite-sized chocolates have been strong drivers.

Ice-cream, too, held firm over indulgent and premium products. Sales through grocery channels were up 5.9 per cent in 2008, and were projected to grow 4.8 per cent last year.

Food industry commentators have said that the recession can cause consumers to seek comfort in small and affordable treats such as foods, rather than splurging on more expensive luxuries like cars and electronic equipment.

In sugar confectionery, however, growth is explained by the availability of more healthy offerings on the market, such as sugar-free and medicated sweets. Growth was 5.8 per cent in 2008, with 3.7 expected in 2009.

Leatherhead identified sauces as a sector that has benefited by consumers’ desire to economise. It observes that people are more likely to buy sauces and cook at home than eat out in restaurants, helping the sauce market towards 4 per cent growth in 2008.

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