Consumption around the globe today and predictions for the future - Asia

Prepared by: Richard Sampson Genest

General Manager Sales & Marketing + International Sales, Stahmann Farms

16 October 2014

Global Purchasing Power

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Rank Country/Region GDP (Millions of US$)World 73,982,138

European Union 17,371,618

1 United States 16,799,700

2 China 9,181,377

3 Japan 4,901,532

4 Germany 3,635,959

CIS 2,808,844

5 France 2,737,361

6 United Kingdom 2,535,761

ASEAN 2,406,474

7 Brazil 2,380,000

8 Russia 2,118,006

9 Italy 2,071,955

10 India 1,870,651

11 Canada 1,825,096

12 Australia 1,505,277

13 Spain 1,358,687

14 Mexico 1,258,544

15 South Korea 1,221,801

16 Indonesia 870,275

Macadamias in “the Asian Century”

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Japanfirst mover

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The Japanese love affair with macadamias

￥-

￥200

￥400

￥600

￥800

￥1,000

￥1,200

￥1,400

￥1,600

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Avg

pri

ce p

er k

g (Y

en)

Vo

lum

e (k

g)

Macadamia kernel imports to Japan. MAT to December

Volume (kg) Japan avg import price

Sou

rce:

Jap

an c

ust

om

s

It’s all about Chocolate!

24

15

4

3

2

2

2

2

1

41

22

18

10

7

5

5

4

4

32

41

49

37

17

12

10

9

19

3

20

27

47

72

80

81

83

69

0

2

2

3

2

1

2

2

7

0% 20% 40% 60% 80% 100%

I eat chocolate with macadamia nuts.

I eat the nut kernels. (The shells are already removed)

I buy cakes or confectionery containing macadamia nuts at stores.

I buy bread containing macadamia nuts at stores.

I make cakes, confectionery using macadamia nuts at home.

I eat the nut kernels by cracking nut shells.

I bake bread using macadamia nuts at home.

I make meals using macadamia nuts at home.

I order meals containing macadamia nuts at restaurants.

Always Frequently Sometimes Never Not sure

65

37

22

13

9

8

7

6

6

Descending order of TOP2.

TOP2

Only females who have

consumed macadamia nuts in

the past 6 months.

• 65% of Japanese consumers regularly eat macadamias as part of a chocolate treat

• 33％ snack on raw or roasted macadamias

• 18％ consume in cakes or other confectionary

• 13% purchase macadamias in breads or pastries

• Very few report eating macadamias in a meal

(n=444)

Sou

rce:

HA

VA

S C

on

sum

er r

esea

rch

20

13

45

43

41

41

42

39

34

38

36

30

24

14

6

40

42

43

42

41

43

47

42

44

47

46

45

27

13

13

15

15

15

17

17

18

18

21

26

37

59

1

1

1

1

1

1

1

1

2

1

3

3

7

0

0

1

0

0

0

0

0

1

0

1

1

1

0% 20% 40% 60% 80% 100%

But Health is a Key Driver• 80-90% interested in health benefit -“anti-aging, heart health• Only 6% “very interested” in the Australian origin

• Low level awareness• Difficult to differentiate• The “Hawaiian effect”

Q25: For the following statements on the features of Macadamias, how much are you interested in each statement? (Matrix SA)

Descending order of TOP2.

Macadamias are keys for anti-aging

Cleansing effect on the arteries reactive blood vessels

Reactive blood vessels (to build strong blood vessels)

Burn fat around heart and liver and work as diet support

Macadamia Nuts have anti-aging benefit and good for skin

Go into blood vessels in the brain and help to prevent cerebral apoplexy

Macadamias match well with chocolate, and are a premium treat that can be enjoyed in cakes, cookies and other sweets

Lowers blood cholesterol

Macadamias are a healthy, cholesterol free healthy food

With a smooth texture and light crunch, they are great as nibbles with alcoholic beverages.Macadamia Oil is used in Aromatherapy and Massage Oils, and can also be used as cooking oil

Macadamias are grown in the natural surroundings of Australia

Macadamias are natively Australian

Female only

TOP2

86

85

84

83

83

82

82

81

80

77

71

59

33

Very much

interested in

Not interested in at

all

Somewhat

interested in Cannot say Not interested in very

much

Hea

lth-re

late

dH

ealth

-re

late

d

(n=700)

88

88

87

87

86

86

86

85

84

82

76

62

37

TOP2

*

* Base = Those who have consumed macadamia nuts in the past 6 months.

Sou

rce:

HA

VA

S C

on

sum

er r

esea

rch

20

13

Increasing focus on health as a key driver

New products and categories

Chocolate will never go away!

Volume growth will be modest

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What does the future hold for Japan?

Chinadevouring dragon!

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Inshell is the driving force in China

0.00

20.00

40.00

60.00

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

2012 2013 2014 YTD JUNE

Avg

pri

ce p

er k

g (R

MB

/HK

D)

Vo

lum

e (k

g)

Macadamia NIS imports to China & Hong Kong (volume)

Volume (kg) China avg import price (RMB) HK avg import price (HKD)

0

50

100

150

-

1,000,000

2,000,000

3,000,000

4,000,000

2012 2013 2014 YTD JUNE

Avg

pri

ce p

er k

g (R

MB

/HK

D)

Vo

lum

e (

kg)

Macadamia kernel imports to China and Hong Kong (volume)

World China avg import price (RMB) HK avg import price (HKD)

Sou

rce:

Ch

ina

Cu

sto

ms,

Ho

ng

Ko

ng

Cen

sus

& S

tati

stic

s D

epar

tmen

t

What the Chinese did to Pecans!

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0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

45,000.00

50,000.00

Nut-in-shell is here to stay for some time yet

Authentic, safe, wholesome, fresh

Entertainment included

Younger urbanised generation will turn to kernel

More convenient

More Western

Ingredient sector has huge potential

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What does the future hold for China?

Koreain waiting

Korea has shown steady growth

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KRW -

KRW 5,000

KRW 10,000

KRW 15,000

KRW 20,000

0

50,000

100,000

150,000

200,000

250,000

2009 2010 2011 2012 2013 2014

MAT JUNE

Vo

lum

e (k

g)

Macadamia kernel imports to Korea. MAT to June

Total import volume Korea average import price/kg

Sou

rce:

Ko

rea

Cu

sto

ms

and

Tra

de

Dev

elo

pm

ent

Inst

itu

tio

n

The Year of FTAs

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Market Tariff Rate FTA Status Phase out

5%Ratified but not yet implemented Immediate

24% Close… ??

30%Ratified but not yet implemented 5 years

Removal of tariff barrier will be a major catalyst

Likely to replicate much of Japanese-style consumption

patterns

High value market with substantial volume potential

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What does the future hold for Korea?

Who’s next?

Emerging Markets

India (1.2B pop.)

Supply chain is a limitation but there is massive latent

demand

Indonesia (250M pop.)

Very substantial and growing middle class

Increasingly Western fashion-oriented

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