Exclusive: Retail Is Top Distribution Channel for Bread in Australia
Australia is the planet’s sixth largest country by surface, but according to official data, its population was only 24.6 million in 2017. Despite the fact that Australians are not very numerous, they enjoy their bread, with a market valued at USD4.7bn, in 2017.
By Catalina Mihu, Ioana Oancea
The research analysts from Technavio found bread and rolls, cakes and pastries, and cookies to be among the consumers’ favorite baked products.
In 2016, nearly 11 million Australian grocery buyers (72.3%) purchased bread in any given seven-day period, spending an average of USD8.20 each. Furthermore, in 2016, around USD83.4m pieces of organic packaged bread was sold in Australia.
Many Australians prefer to buy bread from supermarkets, specialized bread shops and bakeries, the research revealed. In 2017, shoppers who bought bread at Woolworths spent the highest average weekly amount (USD5.90), followed by IGA/Foodland bread buyers (USD5.80), Coles (USD5.70) and Aldi (USD4.40). Bread shops and bakeries accounted for 25.5% of total weekly dollars spent on bread, down from 26.9% in 2015.
Bakers Delight customers – a large Australian-owned bakery franchise chain with outlets both locally as well as in New Zealand and Canada – spent an average of USD8 (resulting in a market share of 13.1%), Brumby’s Bakery customers spend USD7.10 (accounting for 2.2% of all weekly bread dollars), and those who made their purchase from other bread shops spent USD7.40 per week (amounting to a 10.2% market share)
“Hypermarkets and supermarkets have been increasing their share of the market by selling wrapped loaves made by plant bakeries at a low cost and introducing in-store bakeries to produce specialty breads, rolls and pastries,” the analysts from Technavio explains.
Both packaged and frozen bakery markets are growing. However, frozen bakery products – cakes, pastries, bread, muffins – have a very limited shelf-life and are prone to spoilage.
The niche products market is on the rise in Australia like in many other countries around the world. Gluten-free baked foods are known to have a low Glycemic Index (GI) and calorie content, Technavio says. This helps fight obesity providing more energy than the normal baked products. However, when gluten is removed from the baked product, the product develops some undesirable traits such as grittiness, low volume and reduced shelf life. Hence, more bakers are conducting R&D and trying to improve the quality of gluten-free baked products, the analysts explain.
The Australian New Zealand Food Standards Code (Food Standards Code) has requirements with respect to both ingredient listing and products claiming to be gluten-free, according to the research firm. Mandatory Warning and Advisory Statements and Declaration of the Food Standards Code requires a declaration of the presence of cereals containing gluten in foods.
However, in ANZAC, bakery market is fragmented. Smaller artisanal bread companies are more numerous and more likely to focus on the production of bakery products. The markets’ main players typically have diversified operations, which helps them alleviate competition to some extent.