Vegemite Spread Industry Analysis: A Report on Bega Cheese Limited

This report provides an industry analysis of Vegemite spread, a product owned by Bega Cheese Limited, an Australian dairy company with operations in Australia and Germany. The spread industry is experiencing rapid growth and is dominated by global players like Unilever and Nestle. The report highlights that spread companies are heavily involved in innovation to meet changing customer preferences. It includes a company overview of Bega Cheese Limited, product description of Vegemite, and competitor analysis focusing on Marmite (Unilever) and Maggi Dip and Spread (Nestle). The analysis covers the competitive landscapes in both Australia and Germany, supported by financial data and market statistics, demonstrating the challenges and opportunities for Vegemite in these markets. The report concludes by emphasizing the need for continued innovation and strategic adaptation to maintain competitiveness in the global spread industry.

Running head : INDUSTRY ANALYSIS
INDUSTRY ANALYSIS
Name of the Student:
Name of the University:
Author Note:

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INDUSTRY ANALYSIS
Executive Summary
The report shows that Vegamite Spread is owned by Bega Chesse Limited, a company that is
located in Australia and Germany. The report also shows that the spread industry is
undergoing rapid growth and is dominated by global companies like Unilever. The report
further shows that spread companies in order to cater to customers more appropriately are
carrying out large scale innovations.

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INDUSTRY ANALYSIS
Table of Contents
Company overview:...................................................................................................................3
Product description:...................................................................................................................4
Industry analysis:.......................................................................................................................5
Competitor analysis:...................................................................................................................6
References:.................................................................................................................................8
Appendix....................................................................................................................................9

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INDUSTRY ANALYSIS
Company overview:
Vegemite is a brand of flavoured spread owned by Bega Cheese Limited which is
Australian dairy company based in New South Wales, Australia. The company operates
under the leadership of Paul van Heerwaarden in the capacity of the CEO, Barry Irvin,
Executive Chairman and Collin Griffin, CFO, executive director and CS. The company is
listed on the ASXand has been experiencing a bearish trend. However, the stock prices of the
company are showing a little sign of recovery which is clear from the graph below. Bega
Cheese Limited earned a revenue AUD 28768as per the annual reports for the year ending
June 30, 2018 which lower than the previous year as shown in the second figure. The
business operations of Bega Cheese consist of marketing of cheese, spreads including
Vegemite, grocery and contract manufacturing which involves packing of natural cheddar as
well as processed cheddar for third party firms.
Figure 1. Stock index of Bega Cheese on ASX
(Source:Asx.com.au. 2019)

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INDUSTRY ANALYSIS
Figure 2. Highlights of the financial performance of Bega Cheese Limited for the year ended
June 30, 2018
(Source: Begacheese.com.au. 2019)
Product description:
Vegemite is a spread that is extracted from yeast and contains various vegetable
additives. It is the most popular and most loved Australian spread. The popularity is more for
products like Cenovis and Vitam R.

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INDUSTRY ANALYSIS
Industry analysis:
The two graphs below show that both Australia and Germany are extremely
competitive markets. As far as Germany is concerned, it can be pointed that the number of
companies manufacturing cheese and spread alone cross hundred. The spread market in
Australia on the other hand is expected to surpass $ 2045 million in 2019 but is expected to
fall from 2020. It can also be pointed pointed out that both the markets have large number of
foreign as well as resident dairy companies which make the competition even tougher for
Vegemite in these two markets.
Figure 3. Major dairy product market in Germany in 2016
(Source:Statista.com. 2019)

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INDUSTRY ANALYSIS
Figure 4. Graph showing cheese market in Australia
(Source:Statista.com. 2019)
Competitor analysis:
The main competitor of Vegamite are Mermite, owned Unilever and Maggi Dip and
Spread owned by Nestle. While conducting a competitor analysis of Bega in both Australia
and Germany, it can be pointed out that both the countries are strong markets of Unilever and
Nestle. These two companies hold higher position in the market which is proven by the PAT
graph of the three companies for 2017.
Company PAT($)
Vegamite (Bega Cheese Limited) 28,768,000
Mermite {Unilever Plc (PAT-CHF
7538000000)} 7672379926
Maggi Dip and Spread {Nestle S.A
(PAT-EU 6,486000000)} 7437820500

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INDUSTRY ANALYSIS
Bega Cheese Limited Unilever Plc (PAT-CHF
7538000000) Nestle S.A (PAT-EU
6,486000000)
0
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
8,000,000,000
9,000,000,000
28768000
7672379926 7437820500
Chart Title
Figure 5. Graph showing PAT for Bega Cheese, Nestle and Unilever for 2017
(Source: Author)
Vegamite is owned by Bega cheese Limited, Australian diary company that is based
in New South Wales. With an earning of AUD$28768 per annum the company can make
innovations based on the cheese it manufactures in the market. The spreads industry is
dominated by global companies like Unilever and Nestle. The market is estimated to be
worth 15.6 billion as on 2015 and is undergoing rapid changes owing to changing customer
preferences. The customers today demand more varied tastes like fruit and chocolate. The
industry trends of the spread industry today is to offer more premium and organic spreads
which contain no or minimum additives. The industry is dominated by private labels. The
dominating companies in the spread industry are using strategies of acquisition and merger to
acquire spread units of smaller companies to expand their own product lines. The recent
trends in the spread industry also consist of rapid innovation to offer more fat free variants of
spreads to suit the needs of the markets. In fact, it can also be pointed out that the companies
in the industry are making variants of spreads suited to the customer preferences of specific
markets. These trends have escalated the competitiveness in the global spread industry.

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INDUSTRY ANALYSIS
References:
Asx.com.au. 2019. Asx.com.au. [online] Available at: https://www.asx.com.au/asx/share-
price-research/company/BGA [Accessed 1 Jan. 2019].
Begacheese.com.au. 2019. Begacheese.com.au. [online] Available at:
https://www.begacheese.com.au/investors/annual-reports/ [Accessed 1 Jan. 2019].
Kennedy, D. (2018). [online] Available at: https://www.bbc.com/news/magazine-19908368
[Accessed 28 Dec. 2018].
Nestle.com. 2019. Nestle.com. [online] Available at:
https://www.nestle.com/asset-library/documents/library/documents/financial_statements/
2017-financial-statements-en.pdf [Accessed 1 Jan. 2019].
Statista.com. 2019. Statista.com. [online] Available at:
https://www.statista.com/statistics/519430/dairy-products-number-of-companies-in-germany/
[Accessed 1 Jan. 2019].
Unilever.com. 2019. Unilever.com. [online] Available at:
https://www.unilever.com/Images/unilever-annual-report-and-accounts-2017_tcm244-
516456_en.pdf [Accessed 1 Jan. 2019].

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INDUSTRY ANALYSIS
Appendix
Company PAT($)
Bega Cheese Limited 28,768,000
Unilever Plc (PAT-CHF
7538000000) 7672379926
Nestle S.A (PAT-EU
6,486000000) 7437820500
Bega Cheese Limited Unilever Plc (PAT-CHF
7538000000) Nestle S.A (PAT-EU
6,486000000)
0
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
8,000,000,000
9,000,000,000
28768000
7672379926 7437820500
Chart Title