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 ASX and 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 28768 as 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)
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 spread was developed by Cyril Percy Callister in Melbourne, Victoria in the year 1922 (Kennedy, 2018). Since then vegemite is found on the breakfast table of every Australian household. Australians and New Zealanders have a special fondness for vegemite. The spread is not that popular in other parts of the world as yet. Marmite is a popular British version of vegemite. However, in Germany it is not yet popular as Germans have totally different taste. In the UK and Ireland jams and marmalades are play a predominant role in the spreads industry. Then there are people in the US who prefer honey and peanut butter. In the recent years, chocolate spreads have also become trendy.
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 cheese 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)
Figure 4. Graph showing cheese market in Australia
(Source: Statista.com. 2019)
Competitor analysis:
The main competitor if Vegemite in Australia and Germany are similar products from multinational dairy companies. 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($) |
| Bega Cheese Limited | 28,768,000 |
| Unilever Plc (PAT-CHF 7538000000) | 7672379926 |
| Nestle S.A (PAT-EU 6,486000000) | 7437820500 |
Figure 5. Graph showing PAT for Bega Cheese, Nestle and Unilever for 2017
(Source: Author)
There are other substitutes of vegemite in the global market like cenovis and vitam R. Cenovis is primarily a Swiss product. The Swiss version of vegemite comes both in a jar and a tube. Marmite and cenovis are available all over Europe but vegemite is rarely available. Vegemite is darker in color than its counterparts. Vegemite is also matte and lacks shine. Marmite has a thick toffee-like consistency and is very shiny. Cenovis is slightly sticky and shiny. In terms of flavor, Marmite is the strongest, with a sort of ‘meaty’ taste. Cenovis shows its brewing roots more, with a beer-ish undertone. Vegemite has a very slight fishy taste, plus the taste of dessicated onion flakes. However, one must understand that it is a matter of acquired taste. People who live in Asia or the United States do not prefer any of these yeast spreads. They wonder how anybody can prefer salty spreads with toasts.
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].
