Australian Society of Baking 19 th 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 21 20 13 Packaging design 22 Customization benefits 27 Brand name or image 37 Production methods 37 Recommendations from friends/family 39 Ability to share 41 Scent or aroma Habit or preferred brand Health Price Taste or flavor Convenience 42 % Ethics/Sustainability benefits 55 Country of origin 55 Source: Datamonitor BFCM 0401, 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 • ‘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’s Ancient Grain Range of 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 bageljust sandwich thins…. introducing the `thin` Bagel Not has also turned thin. .
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 Ganeden. BC 30 to promote digestive health
Calorie counting across bread, cupcakes, biscuits etc…. Calorie Counting to encourage sensible indulgence
Sugar Free (just. Sugar splender) with splender add alternatives
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…. .
Chunky hand cut cookies with natural ingredients Handcrafted chunky
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…….
“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 dimension to portion control Bite sized treats…. . anotherupon layer…….
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.
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