Bakery products are in the midst of a radical shift, writes Daniel Grimsey, senior research analyst at Euromonitor International.
Consumption of baked goods is undergoing a dramatic shift as Australians move away from eating bakery products for breakfast.
As is well known, many consumers are not consuming breakfast at all – or at least not in a solid form, given the growth of liquid breakfast options.
And yet consumption of bakery products like baked goods, biscuits and breakfast cereals continues to rise in value by an annual average growth rate of 3.8 per cent over 2009-2014.
The baked goods category, which includes breads, cakes and pastries, has grown by an average of 4.5 per cent through retail over the same period. Breakfast cereals, not surprisingly, have performed poorly due to consumers skipping breakfast.
A diverse category, baked goods is also a key player in the middle of the day as an integral part of lunch, but even then it is not bread as we know it. Recent years have seen flat bread soar in popularity, from making up 6.6 per cent of packaged/industrial bread sales in 2009 up to 13 per cent in 2014.
Despite flat breads’ Middle Eastern origins, their success is not primarily due to immigration patterns but low carb credentials. Flat bread didn't really take off in Australia until it started to be used in wraps.
Growing health concerns have also led to a boost in the gluten-free bakery category, the value of which has grown by an average of 24 per cent annually between 2009 and 2014.
These days, the consumption of bakery products is increasingly occurring between meals as a snack during the day, and accompanied by a coffee.
Much of this is through foodservice – most notably cafés and specialist coffee shops – where the volume of pastries consumed has grown by an annual average of 5.4 per cent over the last five years due to the dynamic growth experienced by Australia’s café and specialist coffee shop sectors.
Australia now has more cafés per capita than either France or Spain, and therefore many more opportunities to enjoy a pastry with your coffee. And there is plenty of scope for even more, particularly through retail. Australians simply aren’t pulling their weight when it comes to pastries.
Unlike Western Europe and North America, where the bulk of pastry sales take place through retail channels such as grocery retailers, Australia’s pastries are predominately sold through foodservice.
Per capita, Australians only consume 2kg of pastries through retail each year, most of which is either crumpets or English muffins. In Western Europe the figure is 3.2kg, where it’s made up of an extensive range of regional specialties such as Berliners and Windbeutel in Germany, and brioches and croissants in France. In North America it is 5.4kg – mostly Pop Tarts and doughnuts.
Much of this has to do with substitute products. Instead of having a cannoli with their coffee, Australians are more likely to consume a biscuit.
The situation is beginning to change, however, with the value of packaged pastries sold through retail growing by an annual average of five per cent over the last five years, while unpackaged pastries have grown by seven per cent. And the products growing are generally those consumed as a snack.
Given Australian consumers are increasingly finding excuses to avoid breakfast, this is good news for the industry. It is also an opportunity for retailers. The growing number of cafés found within larger Australian supermarkets is already demonstrative of a blurring of the lines between grocery and consumer foodservice sectors.
Meanwhile, the growing number of artisanal bakeries and self-service Asian-inspired bakeries (such as Breadtop and Bon Bons) has paved the way by creating a sense of excitement about small-serve bakery products.
Danishes and almond croissants have been sold in Australian supermarkets for some time, but as Australia becomes more cosmopolitan, consumers are likely to look towards pastries to satisfy their snacking needs.
The time is ripe for this momentum to migrate to the supermarket shelves.
