Cakes & Pastry Manufacturing in Australia
Industry Report
Cakes & Pastry Manufacturing in Australia
The industry is forecast to grow marginally over the next five years by 0.8% . Volatile input prices and strong external competition have been challenging for industry operators.
OVERVIEW
Over the next five years, industry players are expected to face challenging operating conditions due to increasing competitive pressures and changing food consumption trends. In response, operators will have to innovate new products and meet changing dietary and lifestyle trends.
Health and nutritional concerns are anticipated to drive consumption choices, while trends in product convenience, durability and portability will also be important.
Operators will need to cultivate relationships with customers in alternative distribution channels, to offset many consumers moving away from traditional pre-packaged cakes and meat pies. These new markets, product line extensions and higher priced premium products will contribute to projected industry revenue growth.
Profit margins are forecasted to be constrained by Input costs, rising development costs associated with introducing innovative foods and Intensifying competition from instore supermarket bakeries and hot bread shops.
Higher spending on product innovation, advertising and marketing is anticipated to partially offset gains from production efficiencies. However, an increased focus on higher margin functional foods will likely help offset some of these pressures on profitability. Additionally, a focus on high-priced premium products will likely help operators deal with increasing competition from private-label products.
Imported products will represent another competitive threat, with imports forecast to account for just over one-third of domestic demand in 2025.
Due to these trends, industry restructuring will likely continue over the next five years and key players could change hands.
Due to intensifying competition, both industry establishment and employment numbers are projected to decline over the next five years.
