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Australia’s $92 billion appetite deconstructed

New research on domestic food demand examines trends and issues behind an 88 per cent rise in the real value of household food consumption since 1989–90, from $49 billion to reach $92 billion in 2015–16.

ABARES acting Executive Director, Peter Gooday, said that several factors influenced food demand such as population, income, prices, tastes and preferences.
 
“In high-income countries, the share of the household budget spent on food tends to fall as household incomes rise. In Australia, however, the long-term decline in the household food budget share has slowed appreciably in recent decades,” Mr Gooday said.
 
“Food as a percentage of household spending has declined from 17 per cent in 1964–65, to 11 per cent in 1989–90 and 10 per cent in 2015‑16.
 
“And food demand increased strongly in the 1990s and 2000s despite higher real food prices. Average spending per person in real terms increased from $2482 in 1964–65 to $3788 in 2014–15.
 
“In short, Australians love their food—the food industry is competing quite successfully with other industries in the domestic market.”
 
Mr Gooday said household food expenditure patterns had changed significantly since 1988-89, most notably with strong growth in spending on meals out and fast foods.
 
“Meals out and fast foods accounted for one quarter of average household food expenditure in 1988-89—and grew to nearly one third in 2015–16,” Mr Gooday said.
 
“So lifestyle factors—like taste and preference—are likely to have been a key driver of increasing food demand in the 1990s and 2000s.
 
“In 2009-10, meals out and fast foods was 31 per cent of average household food expenditure, compared to meat, fish and seafood at 15 per cent and fruit and vegetables at 13 per cent.

Overall, net food exports were $22 billion in 2015-16, indicating Australia continues to have an important international competitive advantage
ABARES acting Executive Director, Peter Gooday

“But it depends who you are.
 
“On average, people aged 15 to 24 spend the most of all age categories on meals out and fast foods, and non-alcoholic beverages, and the least on all nearly all other food groups. By contrast, people aged 65 years and up spend the most on fruit and vegetables and the least on meals out and fast foods.
 
Mr Gooday said that over the past 25 years, imports have become a progressively more significant source of food for the household sector, although most food consumed in Australia was produced in Australia.
 
“Food imports increased from $4 billion in 1989-90 to $14 billion in 2015‑16,” Mr Gooday said.
 
“However, the value of Australia’s food exports also increased, from $21 billion in 1989-90 to $37 billion in 2015-16.
 
“Overall, net food exports were $22 billion in 2015-16, indicating Australia continues to have an important international competitive advantage in food trade.”
 
Food demand in Australia: Trends and food security issues includes: data on food consumption by income, age and net worth; production and trade analysis; and, an examination of food security issues. More information is on the ABARES website.

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