Immigration increases in 2023 generated the largest annual population growth in 10 years, with an increase of over 550,000 people or 2.2%. This increase translates into 180,000 more households, injecting $2.7 billion into the retail food market and $1.1 billion into the food service sector in FY23. Under these conditions, individual enterprise sales need to generate over 2.0% volume growth, or they are at risk of losing market share.
New product success is also generating growth, as those who have understood consumer preferences have met those needs with innovative products welcomed by food shoppers. The buyers of these new products typically trade up from lower-value range options, thus adding value to the category. This positive demand is triggered by attributes such as portion size convenience, meal-ready forms, ethical credentials, and home waste reduction, and the best-performing products typically bundle these attributes. The level of demand for this range of attributes is confirmed by 25% of the fresh vegetable retail range value now being generated by added-value products.
Understanding the different growth drivers is of high value when making plans on where to invest for growth. This can be aided by assessing market dynamics such as shopping patterns, sales mix changes, retail range, promotional tactics, and the sum impacts category $ per kg. Relevant learnings can often be found in changes made in other fresh categories. This market intelligence and analysis help identify gaps and shape new product investment.
Market growth, driven by population expansion, can mask the visibility of value growth generated through better, higher-value new products. Unpacking this dynamic creates the platform for understanding to plan for growth. Furthermore, the 2023 level of population growth is not going to repeat, so growth from other means will now be critical in 2024
Freshlogic offers expertise in navigating this landscape, informing the assessment needed to plan for growth. To learn more about how Freshlogic can enable informed decisions and grow plans for your business, contact us here or organise a 15-minute discovery call here.