Edexcel A-Level Business A2 4.3.3 2b Global Niche Markets Topic Practice

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Question 1

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Source for use with Extract D Australian farmers turn to global niche markets From banana flour to organic milk, innovative Australian farmers are taking advantage of the rise of valuable global niche markets due to more health-conscious shoppers. In the north of Australia, banana grower Krista Watkins was concerned with the 500 tonnes of wasted green bananas being dumped from local farms every week. Then came the idea to establish the world’s first green banana processing facility which has now grown to three factories producing 50 different products. “We’re the first people in the world to commercialise banana flour,” Krista said. “We are gluten-free, vegan and Australian-made.” Other farmers’ waste products including sweet potatoes and broccoli are also being converted to powder as the processing operation grows. More than 3,000km further south, dairy farmers Graham and Melissa Clay have recently secured organic certification. The family farm has undergone a major change in the past three years as it gets rid of pesticides and herbicides once thought essential to dairy production. Australian Consolidated Milk general manager, Peter Jones, said that while organic dairy was once thought to be unprofitable, farmers could convert and take advantage of premium prices. “It is a niche market, but it is a niche market that’s growing not just in Australia, but globally,” he said. Converting to organic production can be expensive but organic milk offers a more stable price, with consumers happy to pay extra. About 0.7% (80,000,000 litres) of Australia’s milk is organic.

Evaluate whether or not a business benefits by operating in a global niche market.

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