THE neighbourhood bakery with its cakes and pastries, is becoming an endangered species as big players mass-produce similar bakery products (including canned or frozen bakery products) and sell them through large supermarket chains.
The Australian Society of Baking’s secretary/treasurer, Robin Alberry, said the industry consolidation of recent years has settled down.
“Franchises like Bakers Delight and Brumbys are powering ahead, they’re happy. I think the outlook is reasonably good,” he said.
There is little threat from imports, which are seasonal and comprise mainly long shelf-life products from Europe, such as mince pies from England and Christmas specialties from Holland.
“Most product consumed in Australia is locally made. There are some exports, mainly to Asia, of frozen doughs et cetera. Asia is the only possible area for growth, otherwise the industry is static,” Alberry said.
A battle for market share is being played out between the top 50’s fifth-ranked player, Burns Philp (which acquired Goodman Fielder last year) and sixth-ranked George Weston Foods. Both have invested huge amounts of money in plant and acquisitions.
Alberry noted that George Weston Foods was building an ‘enormous plant’ in Sydney.
“They are spending about $135 million and they’ll be looking for extra markets in Asia to recoup that. The big people are difficult to talk to; they won’t even talk to us. They’re afraid of giving anything away to their competitors,” he said.
George Weston’s brands include Tip Top, Sunblest, Holsom’s and Noble Rise.
According to IBISWorld, their revenue was marginally, up primarily due to the volume growth in the baking division with the launch of Noble Rise Crunchy Toast, White and Fruit varieties, the Holsom range and the re-launch of the Burgen range. However, a highly competitive discounting environment negatively affected their biscuit and cake division.
George Weston Foods has recently introduced several new products including the EZY Bakery mixes and products for the in-store bakery markets.
Competitor Burns Philp’s purchase last year of Goodman Fielder brought operations like Quality Bakers Australia and Pampas into its stable.
Goodman Fielder brands include Buttercup, Wonder White, Vogel’s, Riga, Crumb Craft and Country Bake.
Since the purchase, Burns Philp has been in the spotlight for its $3billion total debt exposure and has been taking steps to reduce the debt, such as selling off its herbs and spices business.
Both Goodman Fielder and George Weston foods declined to comment on the state of the industry for Food Magazine.
The Australian Society of Baking says things are hardest for traditional bakeries.
Alberry said the growth was mostly in big shopping centres that sought known brands.
“It’s difficult for local bakers to compete, unless they are in a good shopping area away from a big mall. This means there are less outlets taking on trainees and apprentices. The big ones don’t care about employing trainees.
“It’s a problem getting young people into the industry now, although girls are doing well and are often taking out the two big major competitions in the industry,” he said.