Cake and Pastry Manufacturing in Australia Industry Market Research Report Now Updated by IBISWorld

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Rising input prices and intensifying external competitive pressures have posed some serious challenges to the Cake and Pastry Manufacturing industry over the past five years. For this reason, industry research firm IBISWorld has updated its report on the Cake and Pastry Manufacturing industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

Supermarkets have extended their private-label offerings, to the detriment of manufacturers

Changing consumer trends, volatile commodity prices and a saturated market have characterised the Cake and Pastry Manufacturing industry in Australia. Rising input prices and intensifying external competitive pressures have posed some serious challenges to the industry over the past five years. For example, supermarkets have extended their private-label offerings as part of their ongoing push into the fresh food market. In addition, the move towards artisanal and gourmet foods has increased competition from retail bakeries, which have posed a threat to branded manufacturers in other parts of the baked goods sector. According to IBISWorld industry analyst Arna Richardson, “in response to these challenges and sweeping changes in consumption needs and preferences, industry operators have relied on innovation and new products to stimulate demand in an otherwise stagnant market.” Over the past five years, industry operators have promoted a widening range of products on the basis of health, wellbeing and convenience. Despite these measures, industry revenue is expected to contract at an annualised 1.3% over the five years through 2014-15, as heightened competitive pressures and restrained household disposable expenditure have taken a toll on the industry.

Over the five years through 2019-20, the industry will slowly evolve in line with its changing operating environment. New products, including lower sugar, low-fat and gluten-free alternatives and those containing added functional ingredients, will continue to be rolled out as the industry focuses on specialised, higher margin products. In view of intensifying competitive forces in traditional distribution channels, including the grocery channel, “the industry is expected to increasingly focus on food-service providers and convenience stores as preferred channels for purchases of pies and cakes,” says Richardson.

The Cake and Pastry Manufacturing industry is characterised by a low level of concentration, reflecting the existence of a large number of small and medium operators. This is despite the existence of some larger manufacturers with global connections including George Weston and Sara Lee. Concentration also varies between product segments. The cake segment tends to be less concentrated, as numerous niche players exist and production tends to be labour-intensive. Pies, however, command higher brand and customer loyalty and are therefore more concentrated, with the major players competing for market share. Typically, the industry's larger firms tend to specialise in mainstream products, targeting the low to mid-price range of the final market. Smaller firms tend to concentrate on specialty products requiring short production runs and lower volumes. Despite the presence of smaller firms, manufacturing is moving toward larger scale, concentrated production.

For more information, visit IBISWorld’s Cake and Pastry Manufacturing industry in Australia report page.

This industry consists of companies engaged in the manufacturing of cakes, pastries and similar bakery products (including frozen products) from either a factory-based premises or home. It does not include those companies that produce and sell their products direct to consumers on the same premises, such as retail bakeries and supermarket instore bakeries.

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IBISWorld industry Report Key Topics

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
IBISWorld
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