Earlier this month, Sheep Producers Australia travelled to the Middle East to gain first-hand insight in to what is a significant market for live, chilled and frozen Australian lamb and mutton.
Loosely described as the Middle East, this descriptor is both inaccurate and misleading. There is great cultural, economic and market diversity that one label cannot adequately describe.
It is more accurate to refer to two areas - the Gulf states, including the United Arab Emirates, Kuwait and Qatar, and the Mediterranean, including Jordan. This is important because the markets are quite separate and becoming increasingly sophisticated at different speeds.
Historically, meat has been sourced from traditional live "wet" markets, but this is now changing.
Supermarkets are expanding rapidly, particularly in the Gulf states, and have about 70 per cent market share. While the wet markets will continue to be important, especially for special occasions, or older and poorer people, consumers are buying more from supermarket butchers, individual butcher shops, supervised slaughter suppliers and, for a small proportion, online sales.
Consumers in the Gulf states are more likely to be wealthier and they have large Western ex-pat communities. They are more likely to purchase convenience meals and eat away from the home.
The Mediterranean/Red Sea countries have less developed markets. Traditional live animal markets are still important, although this is expected to decline as a percentage of total red meat sales in the future.
Locals dominate the purchase decisions, with fewer ex-pats. Local customs and culture are very strong and not as western influenced.
However, food security and continuity is a major consideration in all countries - regardless of region. This includes access, but also choice of healthy, safe and affordable food.
Meat is imported from at least 10 countries and competition is increasing. This will make it harder for Australia to maintain market share in overall sheepmeat sales in the longer term. New Zealand remains a major competitor, particularly at the quality end of the market.
Due to interrupted supplies of live sheep from Australia, importers have been turning to other countries. Australia's major competitors are Somalia, Sudan and India, with some European nations, especially Romania, providing significant yet seasonal quantities.
That said, feedback from importers was that Australia is seen as the country best able to consistently supply the volumes and high quality required for all three key market segments - live, chilled and frozen.
With regard to live export specifically, the live export trade has fallen as a percentage of all sheepmeat imports to the Gulf states and Mediterranean/Red Seas and it appears this will continue in the years ahead.
While this has most impact on Western Australian producers, our challenge is to ensure that our production and supply chain logistics are able to capitalise on the growing number of new opportunities as markets evolve.
For example, traditional cooking styles favour a small carcase with limited fat, suited to the smaller lighter lambs generally produced by WA.
There are significant new product opportunities arising from the growth of supermarkets and food service to achieve a better product balance and risk profile, in meeting demand from the Gulf states and Mediterranean/Red Seas.
In addition, the Australian industry should be looking ahead to the next generation of consumers in those countries. What will the Millennial influence be in the next five to 10 years? Will their behaviours follow their Australian counterparts? And will smartphones and higher education levels change buying behaviours and some long-established customs?
- Graham Smith is the CEO of Sheep Producers Australia
