Want to own your own business? Check out our baker’s dozen for key facts about the bakery sector.
1. In Australia there are 743 businesses bringing in a $41.4m profit on revenue of $753.4m.
2. Wholemeal and seeded breads generate about one fifth of industry revenue; artisanal breads just 13 percent, hot pastries and pies about six percent of industry revenue.
3. Pastries (sweet and savoury) and muffins, cookies, doughnuts, biscuits are considered affordable treats and revenue has remained steady.
4. Bread remains a staple, but the taste for gourmet and premium products is resulting in a more elastic demand. In turn, this means disposable income and macro-economic influences now have an impact on the sector.
5. Supermarkets have aggressive price discounting and operate more than 1200 instore bakeries. Their share of the baked product sales has increased over the past five years.
6. Supermarkets also pose a threat in the celebration cake arena.
7. Artisanal products including exotic cakes and cheesecakes are increasingly supplied to cafes and restaurants.
8. Consumers shopping for artisan items look for ciabatta, brioche, sourdough, baguettes, and are more likely to buy fresh each day.
9. Healthy-minded consumers search for fortified and enriched products. Increasing demand is expected for wholemeal, rye and seeded breads which have a premium price and higher profit margins.
10. Despite the presence of high profile franchise chains, the bakery sector is dominated by independents.
11. Franchises and independents have to compete with supermarkets operating extended opening hours and central locations.
12. Industry profitability will be attacked by external competition and companies competing on price will be worst hit.
13. Value oriented retailers are predicted to reduce their profit margins to continue to operate competitively while those selling premium items will continue to see rising profit margins.
[Source: Artisanal Bakery Product Manufacturing in Australia (August 2016); Bread and cake retailing in Australia (February 2016).]
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