Vegetable industry projected to grow strongly in the next five years
The Australian vegetable industry is set to grow strongly in the next five years, according to IBISWorld, a leading market research company specialising in industry forecasts. Revenues for outdoor and undercover vegetable growing are projected to grow at 3.6 per cent and 4.0 per cent per annum respectively.
This growth is projected to result from increases in production value due to improved production volumes, and greater health consciousness in consumers, according to the IBISWorld reports.
“The reports show that the vegetable industry has displayed remarkable resilience in the face of difficult conditions and this puts it in good shape to take advantage of future growth opportunities,” said AUSVEG Economist, Ben Loe.
AUSVEG is the leading voice in Australian horticulture, representing 9,000 vegetable and potato growers.
The reports estimated that the vegetable industry grew at around 1.5 per cent per annum in the five years from 2007-08 to 2012-13, during a period where consumer spending slumped, and the industry was hit by adverse seasonal conditions and unfavourable exchange rate movements.
“Vegetable production has been fairly flat in the last five years, largely due to production losses from adverse seasonal conditions. The key thing for the vegetable industry will be that we can take advantage of growth opportunities as an overall industry. We need to ensure that we grow the industry in a way that is profitable for vegetable producers,” said Mr Loe.
Health consciousness is projected to be a major driver of growth over the next five years according to the report. It is expected that the consumption of vegetables will rise in the next five years due to increased awareness of health and nutrition issues among Australians.
Other drivers of revenue growth could include sustainable production methods and efficient use of water for protected cropping or greenhouse production. Exports also represent a significant opportunity for growers.
“Exports offer the vegetable industry a significant opportunity for long-term growth. The development of new markets will be assisted by the adoption of new farm technology to increase efficiency and reducing the industry’s dependence on labour,” said Mr Loe.
The results also demonstrated that competition from low-cost overseas producers, dominance of the major retailers, and adverse weather patterns pose threats to growth.
The IBISWorld reports on outdoor and under cover vegetable growing cover 4,180 businesses that generate a total revenue of $4.7 billion and profit of $555 million.