
ECON7200 Economic Principles Report Sample
Assignment Details
Your task is to select a market and present an analysis of the demand and supply changes that have occurred in that market over a recent period of time, and how the interaction of those changes impacted market outcomes such as price and quantity traded.
Market Selection
You must clearly define the market that you are analysing. Markets may be defined by product type (including how specific/broad), location and time period.
This could be for example be the ‘market for organic Roma tomatoes in Adelaide’, or it could be the ‘global market for tomatoes’. Both of those would be acceptable. Think carefully how best to define the market for analysis, as this will impact the arguments you can make, and your ability to support them with data.
Note that the demand and supply model is most applicable to describing competitive markets; and you may wish to avoid markets where pricing and other outcomes are driven primarily by factors outside of the basic demand and supply framework.
As this is an individual assignment, students should not intentionally select the same market as their classmates.
Time Period
Select and communicate clearly the period of analysis. For example, you may wish to discuss changes over the past 12 months until now. Alternatively, you may wish to select a more limited period of time to focus the analysis. Such as the changes in the March quarter of 2023.
Economic Analysis
You should seek to identify all relevant changes in demand and changes in supply. These changes should be based on evidence or data where appropriate, but can also include logically justified assumptions. You should use a demand and supply model to discuss how the changes have jointly led to the price and quantity outcomes. These outcomes should be supported by evidence or data obtained through your own online search. Where demand and supply diagrams are used, they should be your own diagrams, whether prepared in a computer software, or (often more easily) hand-drawn and a scan/photo embedded in the document. Make sure to refer to all relevant economic concepts that have been studied, for example elasticity, if/where relevant.
Topics of Primary Relevance
You will find topics ‘Demand and Supply’ from Week 2 and ‘Elasticity’ from Week 3 to be most relevant. You may of course find course content from other topics useful, but there is no need to try to force their incorporation if not relevant. To give you adequate time to work on this assignment, I consider that only topics up to Week 3 inclusive are expected to be included. Week 4 or Week 5 topics may be included if you specifically want to, however we will not be specifically expecting you to do so, and given they are not the focus of what we are looking for on this assessment task, I would suggest you do not waste too much time, effort or limited word count on that.
Referencing
Where referencing is used, it can be in any standard style, so long as it is consistent. The Harvard referencing style is preferred, as it is the standard in Economics and is also common in Business disciplines.
Solution
Introduction
The growth of the Vegan food market is mainly driven by an increase in demand for vegan food and beverages with increasing awareness of health benefits attached to same. Even the advantages of cholesterol-free diets have increased acceptance of plant-based diets and contributed to a significant extent to Australian vegan food market growth (Sendhil et al, 2024). The recent innovations in the food market i.e. shakes and protein bars have made space for new opportunities for market expansion by catering to consumer preference for clean label and healthy products. The present report focuses on the economic analysis of the Vegan food market of Australia by analysing demand and supply changes in the last twelve months with the intent to evaluate significant changes in the stated industry along with its future perspectives.
Market Selection and Period
The Vegan food market of Australia has been selected for the present study. The scope of the period assessed is the last two to four years so as main focus has been made on recent changes or evolution faced by specified industries. Overall, focus has been made on market analysis of Vegan food products in Australia to analyse changes in its demand and supply in recent times for university assignment help.
Economic Analysis
Market Analysis
Australia is the third growing vegan market at the global level and its market size was $433.03 million in the year 2023 and expected to grow at a CAGR of 7.7% between 2024 and 2032 i.e. $848.13 million by 2023 (Bogueva and Marinova, 2024). The significant growth in vegan products is driven by the shift in consumer behaviour i.e. plant-based substitutes have been expanded beyond tofu and soy milk and used in alternatives like vegan burgers, cheese, and sausages which are considered the best alternative to animal products as they provide taste and texture of meat to non-vegetarian consumers.
The price elasticity of vegan products represents the extent to which the quantity of demand is sensitive in context with changes in their prices. The fact cannot be denied that the Australian vegan food market has assessed significant growth due to an increase in health and environmental concerns. Woolworths, the main supermarket chain in Australia has witnessed an increase of 50% in demand for plant-based products. Even major changes have been seen in the menu of Domino’s and Pizza Hut as they have included vegan cheese, vegan buffalo chicken which represents the increasing demand for plant based (vegan) products in fast food industry as well.
Figure 1: Representation of the relationship of change in price elasticity and demand for vegan products
(Source: Marchese et al, 2024)
It would be appropriate to state that the price elasticity of vegan products in the Australian market is driven by consumer preferences, health awareness and market dynamics. All these factors are currently in favour of vegan products thus, processed vegan items could be marked up significantly in comparison to conventional counterparts (Greene, Zhu and Dolnicar, 2024). Overall, a change in the price of vegan products would significantly affect demand for the product shortly.
Change in Supply
A change in supply results in to shift in the supply curve which eventually leads towards an imbalance in the market which is rectified through the change in price and demand. An increase or decrease in in change in supply is represented through the shifting of the curve i.e. right in case of increase in supply and left in case of decrease in supply of product. A notable change has been witnessed in the supply of vegan products in Australia in the past 12 months i.e. establishment of Vgarden Australia Pty Ltd, which aims to operate a manufacturing facility in Darra, Brisbane for vegan products. Even the growth of revenue of companies like Beyond Meat and Oatly AB represents the increase in consumer demand and market growth (Zhuo et al, 2024).
Figure 2: Supply curve representing rightward shift i.e. increase in supply of vegan products
Considering the perspective relating to consumer preference and development in the growth of vegan products manufacturers and retailers; it would be appropriate to expect significant growth in the supply of vegan products shortly.
Change in demand
The demand curve reflects the relationship between the price of a product or service along with the quantity demanded within a particular period. If there is an increment in the uantity relating to demand of product at every price level then in such a case, the demand curve will shift in a rightward direction. In contrary to this, if there reduction in the demand of quantity is assessed at every price level, then the demand curve will shift in a leftward direction. In the context of vegan products in Australia, as of 2023, around 3% of Australians are following a vegan diet, denoting a significant enhancement as compared to the previous year (Statista, 2024). This increase in demand shows a broader trend of Australians embracing-based alternatives, proof of the increasing popularity of vegan products, with around 40% of households incorporating them into their daily diets. It has been identified that there is an increment from 250000 vegans in 2019 to 9000000 in 2023 (Rock, 2024). This transformation reflects abiut surge in demand for healthier and sustainable meal options. The vegan sector has evolved in a significant manner, shifting from a niche market to a robust industry boasting more than 30 brands and around 300 products across Australia.
Figure 3 Enhancement in the demand for vegan products at every price level leads towards a shift of demand in the rightward direction
Amalgamation of Supply and Demand
The above analysis reflected that about the factors that influence the demand and supply of vegan products. It has been identified that an increment in the supply of vegan products leads towards shifting of supply curve to the right direction and an increment in the demand for vegan products also shifts demand to the right foot.
Figure 4 Shift of demand and supply in the right direction
Conclusion
The above analysis reflects how the demand and supply of vegan products are affected by an increase in customer preference and health concerns. Further, it has been identified that in recent years, there has been a significant increment in the demand for vegan products and their supply. Demand for such type of product is mainly because of increasing awareness of health advantages associated with plant-based food items. Eventually, an increment in demand and supply leads towards a shift of demand and supply curve in the right direction and the same has been represented in graphs.
References
Bogueva, D. and Marinova, D., 2024. Generation Z and novel plant-based food alternatives. In Plant-Based Food Consumption (pp. 105-129). Woodhead Publishing.
Greene, D., Zhu, O.Y. and Dolnicar, S., 2024. Vegan burger, no thanks! Juicy American burger, yes please! The effect of restaurant meal names on affective appeal. Food Quality and Preference, 113, p.105042.
Marchese, L.E., Hendrie, G.A., McNaughton, S.A., Brooker, P.G., Dickinson, K.M. and Livingstone, K.M., 2024. Comparison of the nutritional composition of supermarket plant-based meat and dairy alternatives with the Australian Food Composition Database. Journal of Food Composition and Analysis, 129, p.106017.
Rock, J., 2024. The Growth of Vegans in Australia. (Online). Available through <https://www.thatvegandad.net/blog/growth-of-vegans-in-australia> [Accessed on 19 April 2024]
Sendhil, R., Bhuvana, C.R., Yadav, S., Gayathry, G., Ragupathy, R., Pouchepparadjou, A. and Ramasundaram, P., 2024. Consumer perception and preference toward plant-based meat alternatives–Bibliometric trends and policy implications. Food and Humanity, p.100229.
Statista, 2024. Number of people who signed up for Veganuary worldwide in 2023. (Online). Available through <https://www.statista.com/statistics/1266145/number-of-people-participating-in-veganuary-worldwide/> [Accessed on 19 April 2024]
Statista, 2024. Plant-based food in Australia - statistics & facts. (Online). Available through<https://www.statista.com/topics/8030/plant-based-food-in-australia/#topicOverview> [Accessed on 19 April 2024]
Statista, 2024. Value of packaged vegan food in Australia from 2016 to 2020. (Online). Available through <https://www.statista.com/statistics/731052/australia-value-packaged-vegan-food/#:~:text=In%202020%2C%20the%20value%20of,growth%20rate%20of%209.6%20percent.> [Accessed on 19 April 2024]
The Vegan Revolution: How plant-based foods are set to dominate the economy. 2023. (Online). Available through < https://www.businessexpert.co.uk/the-vegan-economy/>. [Accessed on 19 April 2024]
Vegan Food Market size from 2021 to 2030, 2023. (Online). Available through < https://www.precedenceresearch.com/vegan-food-market>. [Accessed on 19th April 2024]
Zhuo, Z., Chen, S., Yan, H. and He, Y., 2024. A new demand function graph: Analysis of retailer-to-individual customer product supply strategies under a non-essential demand pattern. Plos one, 19(2), p.e0298381.
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