Australian Society of Baking
19th October 2011
• Shannon O’Connell, National Sales Manager
• Kate Hurley, Category Development Manager
Agenda
Market Trends
Kate Hurley
Category Development Manager
International Trade Show
Shannon O’ Connell
National Sales Manager
• Bakery industry influences & drivers
• The bakery shopper
• Bakery mega trends
• Future growth opportunities
• International Dairy Deli and Bakery
Association (IDDBA) June 2011
• New products
Market Insights
Kate Hurley
__________________________________________________________________________________
Retail Environment
The major supermarkets will continue to dominate and grow their share of Australian’s bakery goods
expenditure.
Grocery
Specialty/Route/P&C
Foodservice/Away from Home
46% share
33% share
21% share
Consumer/Shopper
Source: BIS Shrapnel, Aztec, Internal Estimates
The Shopper
SINKS/DINKS
FAMILIES
EMPTY NESTERS
% of Pop: 48%
% of Pop: 35%
% of Pop: 17%
Defined: Single Income No Kids
(SINKS) and Double Income No Kids
(DINKS) are typically aged between 25-35
Defined: Younger families have kids aged
5-12 years and older families have kids
aged 13-17 years
Defined: Empty nesters are parents
whose children have flown the family
nest. They are aged 55 years+
•
•
•
•
•
Younger Families
• Switch between brands
•
•
•
•
•
More disposable income
Quality, premium & gourmet
Willing to try new products
Entertain regularly
Single serve options
Older Families
• Volume and private label based
High disposable income
Brand loyal
Value for money
Less open to new products
More likely to buy mainstream
Sinks/Dinks and Empty Nesters, currently two thirds of the market and growing, will be the key target groups
with higher incomes seeking specialty products.
Source: Retail World, Australian Bureau of Statistics
Demographic & Socio-Economic Drivers
The demographic and socio-economic factors in Australia will drive the need for more ethnic products,
smaller portion sizes, high quality premium offerings and products that appeal to the over 65 age group
Population
Households
Age
Income
65% of population growth is driven
by migration
Increased demand for more ethnic
products
Couples will outnumber families in
the next 5 years
Rising demand for smaller portion
sizes
The proportion of Australians over
65 is projected to increase from
13.9% to 22.6% in 2050
Average household income grew by
4% year on year
Products will need to be adapted
to appeal to mature customers
Ongoing demand for premium
products
Source: ABS, Datamonitor
Influences When Choosing A Food Product
The fundamental importance when choosing a food or drink is sensory appeal and value for money. Over
half of Australians are also highly influenced by health.
Influence of the following factors choosing food and beverage products
81
Showing ‘high’ or ‘very high’ influence
69
55
37
37
Production
methods
Recommendations
from friends/family
Ability to share
Scent or aroma
Country of origin
Convenience
Habit or preferred
brand
Health
Price
Taste or flavor
27
22
21
20
13
Packaging design
39
Customization
benefits
41
Brand name or
image
42
%
Ethics/Sustainability
benefits
55
Source: Datamonitor BFCM0401, August 2010
Bakery Mega Trends
Natural/clean label
Functional ingredients
Seeds, grains & oats
Nuts & fruits
Organic
Gluten Free
Real Value for Money
Address a need
Bakery
Innovation
Drivers
Gourmet/Indulgent
Exotic flavours
Traditional/Authentic
Experience
Exclusive
Portion Control
Customised
Occasion Specific
Consumer Focused
Ethnic Proposition
Product innovation is a key
driver of growth within the
Bakery market
New product
launches need to
deliver against
mega trends to be
successful
Bakery Industry Influencers
The baking industry will be influenced by private label growth and imported products, increased labour
costs, declining consumer confidence and increased demand for convenient formats.
1
Consumer confidence is in decline
2
Private label market share is expected to double to 50% by 2025
3
Increased labour and rent costs are big challenges
4
Growth in the demand for convenient fully finished formats
5
Increase in imported products
Source: Rabobank, Datamonitor
Future Growth Opportunities
Retail
Foodservice
•
Expand tiered offering
•
Regional expansion
•
Increase specialty offering
•
Product range expansion & improvements
•
Smaller convenience store formats
•
Celebrity endorsements
•
Retailers and suppliers working together
•
24 hour service
•
Implementing shopper marketing strategies
•
Moving out of shopping centers
•
Online retailing
•
Day part marketing
•
Social media
•
Social media
•
‘Village market’ feel
•
Experiential Merchandising
What does this mean?
MARKET TREND
IMPLICATIONS
The major supermarkets will continue to
dominate and grow
Shift in manufacturers to entertain more
private label manufacturing
Retail and foodservice players are under
pressure from increasing costs
Decreased shop footprints and a move
towards convenient formats
Increase in migrants, smaller
households, over 65 population and
average income
Develop ethnic, mini, premium product
concepts and adapt products to mature
consumers
Consumers are highly influenced by
taste, price and health
Future product innovation and
investment need to correlate with these
trends
International Trade Show
Shannon O’ Connell
__________________________________________________________________________________
IDDBA Show held in June 2011 at Anehaim CA
• A 3 day event once a year
• Largest show in the world serving these categories
• 1,500 booths focussed on new products
• Broad spectrum of exhibitors from large multinational exhibitors
(CSM, Richs, General Mills) to small independently owned
businesses
• Over 8,000 attendees
• Fantastic guest speakers (Dr Condeeleza Rice, Joe Montana etc)
Rich’sofAncient
Grain
Range
all natural
breads, one popular flavour being Ancient Grains
supported by the Whole Grain stamp
Rich’s Par Bake All Natural range
Thin please….
sandwich
bunsthins popular in US and UK.
Turning thin……
sandwich
The bagel
hassandwich
also turned
thin..
Not just
thins….introducing
the `thin` Bagel
Various different flat breads with unique shapes
Flat bread across a variety of shapes, ingredients and formats. Is this also
a case of clutter claim?
Functional Probiotic bread with GanedenBC30 to promote digestive health
Calorie counting across bread, cupcakes, biscuits etc….
Calorie Counting to encourage sensible indulgence
Sugar Free (justSugar
add splender)
alternatives with splender
Improvement in taste and texture performance across gluten free products
as technology improves
Or is it……With Out Wheat
Kuko
Bites
Wheat
free
and dairy free. Packed with seeds, nuts, dried fruit, goji berries
and cocoa nibs
Wheat and
dairy free.
Packed with
seeds, nuts,
dried fruit, goji
berries and
cocoa nibs.
Supporting Breast Cancer Awareness with a Berry 5” Cake
Novelty donuts drive incremental sales during key seasonal or event
activities
Key Focus Is Artisan
Canadian Baker – Boulart. Unique shapes all par bake
Ace Bakery - Raisin and Walnut
Focaccia flat style also popular
More shapes…..
ChunkyHandcrafted
hand cut cookies
chunky cookies with natural ingredients
Textured…filled
and
centred
All about
texture….filled,
soft, crunchy, oozing
Filled scones
`Centerfuls are delectable dollops of flavour surrounded by a soft chewy
cookie`
Layer upon layer upon layer…….
“Desserts can fit into an overall healthy diet when used in small portions and
balanced with healthy foods," said Melanie Douglass, a dietitian, personal trainer
and author of a new weight-loss book called "Losing It! 5 Keys to Successful
Just for me….
Layer
upon layer upon
layer…….
Bite sized
treats…..another
dimension
to portion control
Bite size Brownies
For the couple households – 5 “ cakes are exploding!
$8.00
4” – 6” cakes
$19.00
An American classic…..
Red Velvet donuts, cookies, cupcakes, whoppies…..
In summary……
Real Value for Money
Address a need
Natural clean label
Thin/Flat
Functional
Calorie Counting
No Added Sugar
Gluten Free
Bakery
Innovation
Drivers
Artisan
Texture
Handcrafted
Portion Control
Exotic Flavours
Kids Celebration Cakes
Cause-related
Seasonal Events
Thank you…
Please feel free to approach Kate or myself if you wish to obtain our contact details.