Aussie “mining to dining” boom amid health food rush

SoaringdemandfromAsianconsumersforpremiumAustralianhealthproductssuchasvitaminsupplementshaspromptedsomecompaniestostartdirectshippingservicestokeymarketssuchasChina.BabymilkpowderinparticularishighlysoughtafterbyparentsinChinaworriedaboutlaxfoodsafetystandardsathome.PHOTO:AGENCEFRANCE-PRESSE

(STRAITSTIMES)AsianconsumerskeentoimprovetheirlifestylesareboostingthefortunesofAustralianproducersofpremiumbabymilkformula,vitaminsandhoney,astheregion'smiddleclassjumpsonthehealthfoodbandwagon.

Middle-classshoppersaredrivingasharpincreaseinsalesofhigh-qualityproducts,sendingtheprofitsandsharepricesofhealthfoodfirms-especiallythosemakinginfantmilkformula-intonewterritory.LeadingthewayareChineseconsumersfearfuloflaxfoodsafetystandardsathome.

Thetrendisbeingdescribedasaseguefrom"miningtodining"asAustraliatransitionsawayfromsupplyingChinawithkeymetalssuchasironoreandcoal.

uchofthefocushasbeenonbeefanddairy,butsmallerfirmsthatproduceinfantmilkpowder,vitaminsupplementsandhoneyarealsobenefiting.

Lastyear,sharesofsupplementsmakerBlackmorestookthetopspotintheAustralianmarket,soaring534.03percenttoA$217.98.Thecompany'snetprofitforthesixmonthsendedDecemberwasup160percentcomparedwiththepreviouscorrespondingperiod,fuelledbysalestoChineseconsumers,whichaccountedfor40percentofitsrevenue.

Bellamy'sAustralia,whoseorganicbabymilkpowderisnicknamed"whitegold",sawitsstockpriceleapmorethan700percentlastyear,asitsnetprofitspikedby325percentinthesecondhalf.

SuchbrandsareconsideredtrustworthybytheChinesebecausetheyaresoldinmajorsupermarketchainsinAustralia,includingColesandWoolworths,saidMrBenjaminSunofdigitalmarketingconsultancyThinkChina.

"WhattheyarethinkingisthatifthemilkpowderisbeingtakenbyAustralianbabies,itshouldsafeforChinesebabies,"hesaid.

ButthisdemandforbabypowderhasoverwhelmedColesandWoolworths,whichhavecappedpurchasesattwoorfourtinspertransaction.

Toblameisaburgeoninggreymarketwherepurchasingagentsknownas"daigou"arehelpingChinesecustomerstosecureproductsinAustraliaandshipthemovertoChina.

MrSunestimatesthereare5,000to10,000daigouinAustralia,rangingfromentrepreneurstointernationalstudents.HesaidtheycanmakeanaverageofA$100,000(S$100,450)ayear.

MrPeterBarraket,whoheadsachainofsupplementsoutletsinSydney,saidheisnowplanningtogrowhisbusinessbyshippingdirectlytoChina.HeisconsideringaflagshipstoreonTmallGlobal,Alibaba'sbusiness-to-consumerplatform,butheiscautiousaboutmarketingtooheavilywhilestocklevelsremainlow.

"We'vegotonlyenoughtocaterforcurrentdemand,"saidMrBarraket,formerlyBlackmores'financialchief.