Write an overview of Frozen Cake and Pastry Manufacturing in Australia focusing on sales trends in recent years and what factors might have led to this trend, and the industry outlook.
Write an overview of Frozen Cake and Pastry Manufacturing in Australia focusing on sales trends in recent years and what factors might have led to this trend, and the industry outlook. (200 words)
Provide a company background of Mrs Mac’s (a specific brand appeared on page 46 of the report) (100 words)
According to IBIS statistics, it can be seen that Mrs Mac’s has been stagnant in recent years; do some research (use at least 3 references) to evaluate and provide evidence to justify why Mrs Mac’s products are in a stagnant growth market or exhibiting stagnant growth (300 words)
Requirements:
Instructions
Use the IBIS World report as a reference,
Write an overview of Frozen Cake and Pastry Manufacturing in Australia focusing on sales trends in recent years and what led to this trend, and the industry outlook. (200 words)
Provide a company background of Mrs Mac’s (a specific brand appeared on page 46 of the report) (100 words)
According to IBIS statistics, it can be seen that Mrs Mac’s has been stagnant in recent years; do some research (use at least 3 references) to evaluate and provide evidence to justify why Mrs Mac’s products are in a stagnant growth market or exhibiting stagnant growth (300 words)
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep20231INDUSTRYREPORTFrozenCakeandPastryManufacturinginAustraliaSep2023
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep20233TableOfContents1.About…………………………………………………………………..5Definition…………………………………………………………….5What’sIncluded…………………………………………………5What’sNotIncluded…………………………………………5Companies………………………………………………………….5RelatedIndustries………………………………………………62.Performance……………………………………………………….8Highlights……………………………………………………………8KeyTakeaways……………………………………………………8ExecutiveSummary……………………………………………9PerformanceSnapshot…………………………………..10Volatility…………………………………………………………….16Outlook……………………………………………………………..19LifeCycle…………………………………………………………..203.ProductsandMarkets…………………………………….22Highlights………………………………………………………….22KeyTakeaways…………………………………………………22ProductsandServices…………………………………….23MajorMarkets………………………………………………….26InternationalTrade………………………………………….28Imports………………………………………………………………30Exports………………………………………………………………314.GeographicBreakdown………………………………….33KeyTakeaways…………………………………………………33BusinessLocations…………………………………………..345.CompetitiveForces…………………………………………37Highlights………………………………………………………….37KeyTakeaways…………………………………………………37Concentration…………………………………………………..38BarrierstoEntry……………………………………………….40Substitutes………………………………………………………..42Buyer&SupplierPower…………………………………436.Companies………………………………………………………..47KeyTakeaways…………………………………………………47MarketShare……………………………………………………47Companies………………………………………………………..497.ExternalEnvironment……………………………………..51Highlights………………………………………………………….51KeyTakeaways…………………………………………………51ExternalDrivers………………………………………………..51Regulation&Policy………………………………………..55Assistance…………………………………………………………568.FinancialBenchmarks……………………………………..58Highlights………………………………………………………….58KeyTakeaways…………………………………………………58CostStructure…………………………………………………..59KeyRatios…………………………………………………………629.KeyStatistics…………………………………………………….65IndustryData……………………………………………………65
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep20234AboutAquickdefinitionoftheindustry,itsproductsandservices,majorcompaniesandotherkeyidentifiershelpyouconfirmyou’reintherightplace.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202351.Abouthttps://my.ibisworld.com/au/en/industry/OD5097/aboutANZSIC20061172DefinitionIndustryfirmsmanufacturefrozenbakeryproducts,includingfrozencakesandpies,alongsidefrozenpastry.What’sIncludedxFrozendessertsxFrozensavouriesxFrozenpastryWhat’sNotIncludedxChocolatexSweetbiscuitsxSavourypastriesxPremiumtake-hometubsxSavourybiscuitsandsnacksxTake-hometubsxCakesxSweetpastriesxChocolatebiscuitsxCocoaproductsxTake-homemulti-packsxUnpackagedscoop-and-serveproductsxConfectioneryxOtherproductsxIndividuallypackagedproductsCompaniesxPattiesFoodsxMrsMac’s
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep20236xSaraLeexSargentsPtyLtdxReadyBakePtyLtdRelatedIndustriesIndustriesintheSameSectorxCompetitors:oCakeandPastryManufacturinginAustraliaxComplementors:oIceCreamManufacturinginAustraliaoBiscuitManufacturinginAustraliaoChocolateandConfectioneryManufacturinginAustraliaInternationalIndustriesxGlobalBakeryGoodsManufacturingxFrozenCake&PastryManufacturingintheUSxBread&BakeryGoodsProductionintheUK
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep20237PerformanceTrackhistorical,currentandforward-lookingtrendsinrevenue,profitandotherperformanceindicatorsthatmakeorbreakanindustry.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202382.Performancehttps://my.ibisworld.com/au/en/industry/OD5097/performanceHighlightsRevenue$868.5m2019-24CAGR↑0.4%2024-29CAGR↑0.9%Employees2,5242019-24CAGR↓1.7%2024-29CAGR↓0.7%Businesses2202019-24CAGR0.0%2024-29CAGR↑0.2%Profit$33.0m2019-24CAGR↓8.1%ProfitMargin3.8%2019-24CAGR↓2.1ppKeyTakeawaysxPrivatelabelpressures,competitionfromfresh-baked,unpackagedpies,andrisinghealthconsciousnessamongconsumershaveconstrainedindustrygrowthinrecentyears.Inresponse,frozencakeandpastrymanufacturershaverolledoutinnovativeproductrangestocapitaliseonshiftingconsumerpreferences.xGoingforward,industrymanufacturerswillfocusonhigher-pricedgourmetofferings,newhigher-marginmarketchannelsandongoingmovestoautomateproductionfacilitiesinlinewithimprovementstrategies.However,increasingcompetition,particularlyfromexternalsources,willconstraingrowthopportunities.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep20239ExecutiveSummaryFrozencakeandpastrymanufacturershavefacednumerouschallengesinrecentyears.Changingconsumerdietaryandlifestyletrendshaveworkedagainsttheindustry,assomeconsumershavecutbackonhigh-caloriefoodssuchascakesandpastriesinfavourofhealthiersnackanddessertalternatives.Otherconsumershavemovedawayfromfactory-producedfrozenpiesandpastriesinfavouroffresh,unpackagedproducts.Inaddition,thegrowingpopularityofprivate-labelproducts,whichareprevalentacrossmanyfoodmanufacturingindustries,representsamajorthreattotheindustry.Thistrendhasnegativelyaffectedindustryprofitmarginsovertheperiod,asbusinesseswithbrandedproductshavehadtolowerpricestoremaincompetitive,despiterisinginputcosts.TheCOVID-19pandemichasalsoaffectedtheindustry’sperformance,influencingbothdemandandsupplypatterns.<br/>Inviewofthesechallenges,growthinindustryrevenueisexpectedtobeasoft0.4%annualisedoverthefiveyearsthrough2023-24,tototal$868.5million.Ongoingproductinnovations,includingnew,premiumproductofferingsandnewdistributionchannels,havesupportedthisgrowth.Industryrevenueisexpectedtoclimbby1.2%in2023-24,pushedupbyhigherprices.<br/>Theindustry’sabilitytocatertoconsumers’changingeatingpatternswilldetermineitsperformanceinthecomingyears.Forexample,frozencakeandpastrymanufacturersaresettointroducemoregluten-freeandveganproductofferingstobettercaterfordifferentdietaryrequirements.Businessesareprojectedtofocusonlucrativenichemarketstogenerateadditionalrevenue,withanincreasingrangeofspecialtyfrozenbakedgoodsthattargetthefoodservicesector,includingready-to-bakeandready-to-thawproducts.Ongoingproductinnovationwillbecrucialtocounterintensifyingindustrycompetitionandexternalpressurefromartisanalandin-storesupermarketbakeriesthatofferfresh,gourmetsubstitutes.Despitecompetitivepressures,industryrevenueisforecasttoedgeupwardsbyanannualised0.9%overthefiveyearsto2028-29,tototal$906.7million.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202310PerformanceSnapshot↑2019-24RevenueCAGR+0.4%Revenue:Revenue$868.5m’19-’24↑0.4%’24-’29↑0.9%2024RevenueCAGR↑1.2%RevenueVolatility↑Low
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202311Employees:Employees2,524’19-’24↓1.7%’24-’29↓0.7%EmployeesperBusiness11’19-’24↓1.7%’24-’29↓0.8%RevenueperEmployee$344k’19-’24↑2.1%’24-’29↑1.5%
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202312Businesses:Businesses220’19-’240.0%’24-’29↑0.2%EmployeesperBusiness11’19-’24↓1.7%’24-’29↓0.8%RevenueperBusiness$3.9m’19-’24↑0.4%’24-’29↑0.7%
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202313Profit:TotalProfit$33.0m’19-’24↓8.1%ProfitMargin3.8%’19-’24↓2.1ppProfitperBusiness$150.0k’19-’24↓8.1%
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202314PerformanceSnapshotWhat’sdrivingcurrentindustryperformance?COVID-19exacerbatedalreadychallengingtradingconditionsxChallengingtradingconditionshavecharacterisedtheindustryinrecentyears.Privatelabelpressures,competitionfromfresh-baked,unpackagedpiesandrisinghealthconsciousnessamongconsumershaveconstrainedindustrygrowthovertheperiod.xTheCOVID-19pandemicaddedtotheindustry’schallenges,withthetemporaryclosureoffoodserviceoutletsduringlockdownperiodsleadingtoadramaticdropindemandfromthismarket.xWhileachangeinfoodconsumptionpatternsfromcafesandrestaurantstohomekitchensledtoariseinready-to-thawandready-to-bakefrozenproducts,ashouseboundconsumersstockedtheirfreezerswithnon-perishablefoodsupplies,otherconsumerstookadvantageoftheiradditionaltimeathometobakefreshcakes.PrivatelabelandimportpressuresaddtocompetitivepressuresxIndustrymanufacturershavecontendedwithseveralsupplychainchallengesinrecentyears,whichhaveconstrainedgrowthandaddedtoprofitmarginpressures.xTheincreasingdominanceofAustralia’stwolargestsupermarketshasbeenparticularlydifficultforindustrymanufacturers,withColesandWoolworthsestablishingprivatelabelproductsacrossmanyestablishedcategories,includingfrozencakes,dessertsandpastrysheets.Thesesupermarketshaverecentlyextendedtheserangestoincludegluten-freeoptions.xPrivatelabelproductsaregenerallycheaperthanbrandedproducts,fuellingpricecompetitionandadverselyaffectingprofitmarginsforindustrymanufacturers.xImportedproductsarealsogainingmarketshare,addingtocompetitivepressures.Importsareexpectedtosatisfyover40%ofdomesticdemandin2023-24.InnovativeproductrangesintroducedtowetconsumerappetitesxInresponse,frozenbakerymanufacturersarerollingoutinnovativeproductrangestocapitaliseonshiftingconsumerpreferences,includingcateringtoconsumerswhohavebecomemoreinclinedtocookandeatathome.xSomeindustrymanufacturershaveintroducedsingle-serveormulti-packsnackoptionstomeetchangingconsumerpreferencesandrisinghealthconsciousness.xOthershavelookedtoencourageconsumerpurchaseswithhigh-qualityingredients,includingWagyubeef,slow-cookedpulledpork,RSPCA-approvedchickenandpremiumofferingslikesaltedcaramelpuddings,appleandstickytoffeecrumbles,andminifilledchurros.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202315xOtherfrozenbakerymanufacturershaveintroducedgluten-freeoptions,alongsidemeat-freeandsoy-freesausagerolls.ChannelchangesimplementedtooffsetsaturatedmarketxTheindustry’sdistributionbasecontinuetomovebeyonditstraditionalrelianceonsupermarketfreezerspace,whichhashelptosupportindustrygrowth.xFrozencakeandpastrymanufacturershavefocusedonfoodserviceindustriesinrecentyears,whereinprivatelabelanddeflationarypricingpressuresarelowerrelativetothesupermarketsector.xOthershavetargetedexportmarkets,althoughexportsremainnegligibleasaproportionofindustryrevenue,astransportinglow-valuefrozenproductsoverlongdistancesrequiressignificanteconomiesofscale.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202316VolatilityWhatinfluencesindustryvolatility?ArelianceonseveralchannelshelpslowerdemandvolatilityxTheindustry’sabilitytoaccommodateshiftsinmacroeconomicconditionsandconsumerspendingbehaviourhasbeenvitalinrecentyears.Theindustryproducesarangeoffoodfordifferentmarkets,enablingfrozencakeandpastrymanufacturerstomaintainsalesdespitechangesinconsumersentiment,employmentandincome.xForexample,duringperiodsofweakeconomicgrowth,peopleoftencookathomeratherthaneatout.Thistrendheightensdemandfortheindustry’sfrozenproducts,whicharegenerallyeatenathome.Manyoftheseproductsareconsideredeitherstaplehouseholdfooditemsoranaffordableluxury,makingthemaconvenientandcost-effectivemealoption.VolatilesupplyconditionscontributetoindustryvolatilityxFluctuationsinthecostofrawmaterialsandenergyandoilpricesmaycreatevolatilesupplyconditions.Commoditieslikecerealgrains,flour,sugar,flavourings,processedmeats,vegetablesandvegetableoilsareprimaryinputsintheproductionprocessandanymarkedpricechangesimpactindustrysupply.xThesecommodities’priceshavefluctuateddramaticallyinrecentyears.Inparticular,thepriceofwheathasbeenhighlyvolatile.xWhileindustrymanufacturersmayseektoraisepricestocoverhigherinputcosts,thehighlycompetitivepricingenvironmentcharacterisingtheindustrymeansthatthisdoesnotalwaysoccur.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202317
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202318Howdosuccessfulbusinessesovercomevolatility?PassoncostincreasesFrozenbakerymanufacturersmustbeabletopassonanysustainedrisinginputpricestoremaincompetitive.Volatilepricesforinputssuchassugar,flourandmeatcansubstantiallyaffectprofitmargins.EstablishsupplycontractsforkeyinputsManufacturersmustlockincontractswithsupplierstominimisevolatilityduetoupstreampriceshifts.Firmsmustavoidsupplychainissuestoguaranteeproductiondeadlines.SecureeconomiesofscaleSuccessfulfrozenbakerymanufacturershaveexpensiveandsophisticatedproductionsystemsthatdrivelabourproductivityandreduceper-unitproductioncosts.Large-scaleindustrymanufacturershavesignificantcostadvantagescomparedwithsmallercompetitors.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202319OutlookWhat’sdrivingtheindustryoutlook?FavourablegrowthdriverswillsupportgrowthxSoftgrowthisforecastfortheindustry,supportedbythecontinuingpopularityoffrozenpastrystaples,especiallyasthehumblemeatpiehasnowbeenreinventedtoincludewine-infusedingredientsandplant-basedfillings.xOpportunitiesinnichemarketsandthecontinuedrolloutofgourmetproductofferingswilldriveindustrygrowth.Astheseproductsareoftensoldatapremium,thistrendwillbolsterindustryprofitabilityandhelpfirmsrecovermarketsharethattheyhavelosttoprivate-labelproducts.xModestgrowthinrealhouseholddisposableincomeoverthenextfiveyearswillsupportdemandforfrozenpastriesandcakes,particularlyproductspurchasedastakeawayitems.Growingconsumerdemandforconvenienceandincreasingrelianceonon-the-gomealswillalsosupportthistrend.ExternalthreatswillconstraingrowthopportunitiesxExternalcompetitionfromartisancakemakers,franchisedbakerychains,hotbreadshopsandin-storesupermarketbakerieswillconstrainindustryrevenuegrowth.xTheserivalswillincreasinglycatertoconsumersseekingfresh-bakedandartisanal-stylegoods,insteadofindustriallyproducedfrozenproducts.xAtthesametime,private-labelfrozenpastryandcakeproductsaresettoundercutbrandedproductsanderodebrandloyalty,minimisinggrowthopportunitiesformanyoftheindustry’slargerplayers.xImportsarealsoforecasttogainfurthermarketshare.ProductlineextensionstoenticeconsumersxIndustrymanufacturersaresettoextendproductlinestocounterintensifyingcompetitivepressures.Higher-qualityandgourmetingredientswillhelpdifferentiatebrandedproductsfromlower-qualitygenericproductsandfreshlybakedgoods.xManufacturerswillalsorolloutanincreasingrangeofsingle-serveorbite-sizeproductstoenticehealth-consciousconsumers.Othersaresettocatertobusyconsumers,asadvancesinpackagingallowforagrowingrangeofmicrowaveableorinstantsingle-servemeals,treatsorsnacks.xIncreasinghealthconsciousnesswillencouragenewlow-fat,reducedsaltandcholesterol-freeproducts,oruseall-natural,organicorplant-basedingredients.Theincreasingpopularityofgluten-freeandfunctionalfoodswillhelpcreatenichemarkets.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202320LifeCycleWhyistheindustrymature?ContributiontoGDPTheFrozenCakeandPastryManufacturingindustryisinamaturelifecyclephase,demonstratedbyitsweakgrowthinindustryvalueadded,whichislaggingthatofthebroadereconomy.MarketSaturationTheindustryischaracterisedbyitsmatureandsaturatedmarketandthewholeheartedacceptanceofitsproductsbyconsumers.ProductslikeFour’NTwentypiesandSaraLeecheesecakesarestaplesinmanyAustralianhomes.InnovationSeveralindustrymanufacturersareundertakingproductinnovationandproductlineextensionstocompetewithprivatelabels,growbrandloyaltyandcatertochangingconsumerpreferences.Nichemarkets,includinglow-fat,premiumgourmetandfortifiedfoodranges,representnewgrowthopportunities.ConsolidationConsolidationtrendscurrentlycharacterisetheindustry,witheventheindustry’smajorplayerschanginghands.FollowingMcCainFoods’recentdivestmentofSaraLeeHoldingstoNewZealand-basedprivateequity,PattiesFoodsPtyLimitedhasbeensoldbyitsprivateequityowner.Technology&SystemsInnovationsinfreezingtechnology,whichallowsproductstoretaintheirfreshnessandpremium-qualitycharacteristics,areenablingnewrangesofready-to-eatpastryitemstargetedatconsumers,alongsidenewready-to-thawandready-to-bakefrozenproductsgearedtowardsvariousfoodserviceindustries.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202321ProductsandMarketsFindoutwhattheindustryoffers,wheretradeismostconcentratedandwhichmarketsarebuyingandwhy.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep2023223.ProductsandMarketshttps://my.ibisworld.com/au/en/industry/OD5097/products-and-marketsHighlightsLargestMarket$553.2mFrozensavouriesProductInnovationModerateKeyTakeawaysxTheportionofindustryrevenuederivedfromeachproductcategoryischanginginlinewithchangingdietsandfoodconsumptionpatterns.Changingdistributionchannelsarealsoinfluencingtherelativeimportanceofeachproductsegment.xTheindustryhasmovedtowardsawiderdistributionbaseoverthepastdecade.Thishasoccurredasfrozencakeandpastrymanufacturershavegraduallymovedawayfromtheirtraditionalrelianceonthegrocerychannel,infavourofnewhigher-marginmarkets.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202323ProductsandServicesHowaretheindustry’sproductsandservicesperforming?FrozensavouriesgoupmarketxProductsinthefrozensavouriessegmentincludemeatpies,pasties,sausagerolls,quichesandothersavouryfingerfoods.Manyoftheseproductsareconsideredstaplefoodsandcontinuetoperformwell,despiteconsumerpreferencesshiftingtowardshealthierandmorepremiumoptions.xThissegmenthasgrownasaproportionofrevenueovertheperiod,asfrozenpastrymanufacturerscontinuetodevelopnewproductstokeeppacewithconsumerpreferences.Forexample,meatpieshavebecomemoregourmet,withoptionsincludingWagyubeefandThairedcurry.xRobustsalesgrowthofsingle-serveportionshasalsocontributedtothefrozensavouriessegmentexpandingasashareofrevenue.Frozendessertsarere-positionedasindulgentsnacksxFrozendessertsincludecakes,fruitpies,Danishes,strudels,cheesecakesandtarts.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202324xPremiumfrozendessertshaveperformedbetterthanmid-marketproductsinrecentyears,ascompetitionfromsupermarketprivate-labelproductshasbeenlessdetrimental.xManyfrozencakemanufacturersareexpandingtheirrangeoffrozencakesandpastriestomeetdemandfromtheCafesandCoffeeShopsindustryandtheRestaurantsindustry.xOthersarerepackagingandrepositioningdessertsasindulgentsnacks,tohelpcounterconsumersseekingtorestricttheirintakeofhigh-caloriefoods.FrozenpastrybenefitsfromrenewedinterestinhomecookingxFrozenpastryproductsincludefrozensheetpastryandfrozenpastryshellslikequichebases.Productsinthissegmentdifferfromothersegments,astheyaresoldasarecipeingredientratherthanasready-to-eat.xThismeansfrozenpastrycanbesubjecttoconsumerhomecookingtrends,whichhaveundergonearesurgenceinrecentyears,particularlyduringCOVID-19-relatedlockdowns.xFrozenpastrymanufacturershavealsotargetedthefoodservicesectorwitharangeofbakedandunbakedpastryshellsandcupsanddispenser-readyrolledpastry.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202325Whatareinnovationsinindustryproductsandservices?PremiumproductsaredrivinggrowthxWhilethemarketisgenerallysaturated,somegrowthopportunitiesexistforfrozenbakerymanufacturers,especiallyinnichemarkets,includinglow-fat,premiumgourmetandfortifiedfoodranges.xIndustrymanufacturersareinvestingconsiderableresourcestoconvinceconsumerstochoosehealthiersnackoptionsortradeuptoupgradedmeatpies,likethosethatincorporateslow-cookedAngusbeeforaremadewithlocallysourcedcraftbeerorredwine.xOthersarerollingoutanewrangeofplant-basedandgluten-freeofferingstocaterforconsumerswithdifferentdietaryrequirements.Newrangesofspecialtypastryproductsmadewithpremium-qualityingredientsarealsobeingrolledouttofoodserviceoperators.AutomationisallowingformoreefficientproductionprocessesxSeveralofthelargerplayershaveworld-standardtechnologyandsystemsinplace.Severalaspectsofthesupplychain,frombakingtopacking,arenowautomatedandrequirefarlesslabourperproductproducedcomparedwithadecadeago.Thisautomationenablesindustrymanufacturerstoworkatproductivecapacityforupto24hoursperday.xPackagingefficiencyhasimprovedasmanufacturershaveinvestedinnewpackagingequipment,includingcollators,conveyors,spiralchutes,cartondropsandautomatedcasepackers.PattiesFoodshasrecentlyinstalledanewsingle-boxpackingmachine,inlinewiththestronggrowthofsingle-servepiescateringforthegrowingnumberofconsumerseatingonthego.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202326MajorMarketsWhat’sinfluencingdemandfromtheindustry’smarkets?SupermarketsandgrocerystoreshavebeenthetraditionalfocusofindustrymanufacturersxTheindustrymakesmostofitssalesthroughsupermarketsandgrocerystores,whichincludegrocerywholesalersthatonselltosupermarketsandothergrocers,anddirectsales.Supermarketsarethemaindistributionchannelforfrozencakeandpastryproducts.xColesandWoolworthsaretheindustry’slargestcustomersbyrevenue,andhavesignificantnegotiatingpower.ThesesupermarketsarealsopurchasinganincreasingamountofprivatelabelproductsfromAustralianmanufacturers.xThismarket’sshareofrevenuehasfallenovertheperiod,asmanufacturershavefocusedongrowinghigher-marginsalesinalternativedistributionchannels.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202327FoodservicesprovidersrepresentagrowingmarketxFrozenproductsdesignedfortakeawayconsumptionaresoldtocaterers,cafesandrestaurants,accommodationproviders,corporateclientsandgovernmentorganisations.xThismarketisasmallpartoftheindustry,butanimportantandgrowingmarketfornichecakeandpastrymanufacturersthatmakespecialtypastryanddessertproducts.SaraLees’Foodservicedivisionsellstoarangeoffoodserviceproviders,providingquickandconvenientfoodoptionsforcustomers.xThismarkethasexpandedasashareofindustryrevenueovertheperiod.ConveniencestoresandpetrolstationslosegroundxConveniencestoresandpetrolstationsinclude7-Eleven,CaltexStarMart,BPandColesExpress,alongwithcornerstoresandmilkbars.xOn-the-gofoodconsumptiontrendshaveledtomorepetrolstationsandconveniencestorespurchasingfrozenpiestosellasready-to-eatpiesinfoodwarmersovertheperiod.xSomeconveniencestoresalsosellfrozenproductsthatareeatenathome,butdemandfortheseproductsfromconveniencestoreshasdroppedaway.xFallingsalesintheConvenienceStoresindustryhastranslatedintoadropinthismarket’srevenuecontributionoverthepastfiveyears.HouseholdnamebrandsdominatesalestosportsstadiumsandfacilitiesxSeveraloftheindustry’sparticipantssupplyfrozentakeawayproductsatsportsgroundsinAustralia.xForexample,PattiesFoodshasexclusivesupplyrightsatallmajorEastCoastfootballstadiums,includingtheMelbourneCricketGround,Gabba,SydneyCricketGroundandSuncorpStadium.ThesedealsprovidebrandslikeFour’NTwentywithconsiderableexposure.xSalestothismarketsegmenthaverecentlyrecovered,followingasharpdownturnduringCOVID-19lockdowns.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202328InternationalTradeTotalImports$664.0m’19-’24↑3.9%’24-’29↑2.5%TotalExports$19.5m’19-’24↓5.6%’24-’29↑1.2%TradeBalanceNetImporter↓Deficit:$-644.5m
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202329InternationalTrade
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202330ImportsHighIncreasingWhataretheindustry’simporttrends?Importpenetrationratesaretrendingupwards,addingtotheindustry’scompetitivepressuresxIncontrasttotheweakperformancepostedbyindustryexports,industryimportshaveriseninrecentyearswithimportsincreasinginbothabsoluteandrelativeterms.xImportsareexpectedtosatisfynearly45%ofdomesticdemandin2023-24,followingariseinimportpenetrationrates.xThistrendhasaddedtothecompetitivepressuresfacingindustrymanufacturersandfuelledpricecompetition.Keytradingpartnersarescattered,representingamixofoldandnewxAswithexports,importsareoftensourcedfromnearbyregionalmarkets.KeyregionaltradingpartnersincludeNewZealand,MalaysiaandThailand.xProductsarealsosourcedfromAustralia’straditionaltradingpartners,includingtheUK,FranceandtheUS.ThismixofmarketsreflectsthewideandchangingtastesofAustralianswithregardtotheirconsumptionpreferencesforcakesandpastries.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202331ExportsLowDecreasingWhataretheindustry’sexporttrends?TheneedforeconomiesofscalelimitsexportsxWhilefrozencakesandpastriesarelessperishablethantheirfreshcounterparts,firmsrequireeconomiesofscaletotransportlow-valuefrozenproductsoverlongdistances.Thisrequirementhashistoricallylimitedtheextenttowhichfrozencakeandpastrymanufacturersundertakeexportactivities.xNonetheless,industrymanufacturershavebeenattemptingtoovercomeincreasinglocalmarketsaturationandprivatelabeltrendsbyestablishingtheirbrandsabroad.MajorcompanieslikeMrsMac’sPtyLtd,SaraLeeHoldingsPtyLtdandPattiesFoodsarenowexportinglimitedoutputvolumes.xThelowvalueoftheindustry’sproductsmeansexportmarketsareoftenlocatedclosebyandincludeNewZealand,HongKongandSingapore.ExportsfailtogaingroundxDespiteeffortsbythelargerplayerstotargetnearbymarkets,exportshavetrendeddownwardsoverthepastfewyears.xIn2023-24,exportsareexpectedtobenegligible,generatinglessthan3.0%ofindustryrevenue.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202332GeographicBreakdownDiscoverwherebusinessactivityismostconcentratedinthisindustryandwhat’sdrivingthesetrends.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep2023334.GeographicBreakdownhttps://my.ibisworld.com/au/en/industry/OD5097/geographic-breakdownKeyTakeawaysxSimilartotheCakeandPastryManufacturingindustry,frozencakeandpastryproductionisconcentratedalongtheeasternseaboard.NewSouthWales,VictoriaandQueenslandaccountforthemajorityofindustryactivity.xTheneedforeconomiesofscaleinfluencestheindustry’sgeographicspread.ThishelpsexplainthelimitednumberofindustryestablishmentsinTasmania,theAustralianCapitalTerritoryandtheNorthernTerritory.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202334BusinessLocationsLGAEstablishments%Population%NSW36.732.6VIC26.224.8QLD17.420.0WA9.610.1SA7.17.5TAS1.62.3ACT1.01.6NT0.41.0
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202335Whereareindustrybusinesseslocated?Theeasternseaboarddominatestheindustry’sgeographicspreadinlinewithitspopulationsharexSimilartotheCakeandPastryManufacturingindustry,frozencakeandpastryproductionisconcentratedalongtheeasternseaboard.xNewSouthWales,VictoriaandQueenslandaccountforthemajorityofindustryactivity.xThedistributionoffrozencakeandpastrymanufacturerslargelycorrelateswiththatofAustralia’spopulation,withthesethreestateshometothree-quartersofAustralia’spopulation.xThissuggeststhatfrozencakeandpastrymanufacturersopttobeclosetotheirdownstreamcustomerbase.RegionalareasareoftenfavouredtosavecostsxSeveralofthemajorplayers’manufacturingfacilitiesarelocatedinregionalareas,insteadofmajororstatecapitalcities.Forexample,PattiesFoodsislocatedinBairnsdale,VIC.SaraLee’smanufacturingplantisbasedinGosford,NSW,whichisalsoaregionalarea.xRegionalareasrepresentsignificantcostadvantagesforfrozencakeandpastrymanufacturers,astheycanavoidpayingwagepremiumsandhavemoreflexibilitytomakecapitalinvestmentsthroughcheaperlandandconstructioncosts.xProximitytomajormarketsislesscrucialformanufacturersoffrozenproductsrelativetoperishablebakedproducts,asthesecanbetransportedgreaterdistances.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202336CompetitiveForcesUncoverchallengesandbenefitsintheoperatingenvironment,diggingintomarketshare,buyerandsupplierpowerandkeysuccessfactorsforoperators.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep2023375.CompetitiveForceshttps://my.ibisworld.com/au/en/industry/OD5097/competitive-forcesHighlightsConcentrationModerateCompetition↓High↓IncreasingBarrierstoEntryModerate↑IncreasingSubstitutes↓High↓IncreasingBuyerPowerModerate↑DecreasingSupplierPowerModerateSteadyKeyTakeawaysxAstheindustry’smarketsaresensitivetopricefluctuationstovaryingdegrees,priceisakeycompetitivebasis.Pricecompetitionhasbecomeincreasinglyimportantinrecentyearsasmajorsupermarketshaveaggressivelypromotedprivate-labelproducts.xTheindustryissubjecttosignificantexternalcompetitionfromproducersoffreshcakesandpastries.Australianconsumersareincreasinglyoptingforfresh,innovativebakedgoodsthatareavailablefrominstoresupermarketbakeries,artisanalbakeriesandhotbreadfranchises.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202338ConcentrationModerateWhatimpactstheindustry’smarketshareconcentration?Recentconsolidationtrendsunderlietheindustry’smoderatemarketshareconcentrationxTheindustryischaracterisedbymoderateconcentration,withthetopthreeplayersexpectedtoaccountformorethan60%ofindustryrevenuein2023-24.xTheindustryhasconsolidatedoverthepastdecade,asallmajorplayershaveexpandedthroughacquisitionsandproductdevelopment.xManytopbrandshavealsoundertakenaggressivemarketingtoentrenchtheirmarket-leadingpositions.MarketshareconcentrationvariesbetweenproductsegmentsxConcentrationpatternscanvarybetweenproductsegments.xGoodmanFielderPtyLimitedisestimatedtosellmorethan60%offrozensheetpastryinAustralia,whilePattiesFoodsPtyLimitedisestimatedtomanufacturehalfofthefrozenmeatpiesandsausagerollssoldthroughgrocerychannelsinAustralia.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202339xSaraLeeHoldingsPtyLtdisexpectedtoaccountforhalfofAustralia’sfrozendessertmarket(includingitsicecreamproductrange).Thesesharesdemonstratetheconsiderablecustomerloyaltythatsomebrandscommand.Howdosuccessfulbusinesseshandleconcentration?SecureeconomiesofscaleSuccessfulfrozenbakerymanufacturershaveexpensiveandsophisticatedproductionsystemsthatdrivelabourproductivityandreduceper-unitproductioncosts.Large-scaleindustrymanufacturershavesignificantcostadvantagescomparedwithsmallercompetitors.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202340BarrierstoEntryModerateIncreasingWhatchallengesdopotentialindustryentrantsface?LegalxFrozencakeandpastryfoodmanufacturersmustobservestateandFederalgovernments’foodandhealthregulationstoensurepropersafetystandardsforproducing,distributing,handlingandconsumingfood.TheymustalsocomplywiththeAustraliaNewZealandFoodStandardsCode.Start-UpCostsxNewindustryentrantsrequiresignificantcapitalforproductionfacilitiesofanyrealscale.Theindustry’smajorplayershaveinvestedheavilyintheirsystemsandsupplychainsoverthepastdecadetobecomemoreefficient.DifferentiationxTheindustryishighlyconcentratedandsignificantbrandloyaltyisassociatedwithsomeproducts.Thebestpotentialopportunitiesfornew,smallandnimbleentrantsareinsupplyingnichemarketsthatlargerindustryplayersaretoolargetoaccess.CapitalExpensesxTheindustryismoderatelycapitalintensivewithmanyofthelargermanufacturersrelyingonthelatestmanufacturingandpackingtechnology,includingroboticpackagingprocesses.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202341Howcanpotentialentrantsovercomebarrierstoentry?EstablishsupplycontractsfordomesticsalesManufacturersmustlockincontractswithsupplierstominimisevolatilityduetoupstreampriceshifts.Firmsmustavoidsupplychainissuestoguaranteeproductiondeadlines.SecureeconomiesofscaleSuccessfulfrozenbakerymanufacturershaveexpensiveandsophisticatedproductionsystemsthatdrivelabourproductivityandreduceper-unitproductioncosts.Large-scaleindustrymanufacturershavesignificantcostadvantagescomparedwithsmallercompetitors.DevelopmarketingexpertiseLeadingbrandsrequiresignificantmarketingtocommunicatetheirproducts’perceivedadvantagestoconsumers.Manufacturersseekingtobreakintocertainmarketsrequirehighlyeffectivemarketingandqualityproducts.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202342SubstitutesHighIncreasingWhataresubstitutesforindustryservices?ImportsxInrecentyears,localfrozencakeandpastrymanufactureshaveenduredhighimportcompetitionfromrivalfrozencakesandpastriesmanufacturedinNewZealand,MalaysiaandFrance.xFollowingasteadyriseinimportpenetrationlevelsoverthepastdecade,importsareexpectedtosatisfyjustover45%ofdomesticdemandin2023-24.BakeryProductManufacturingxTheFrozenCakeandPastryManufacturingindustryissubjecttosignificantexternalcompetitionfrommanufacturersoffresh(ratherthanfrozen)products.xBakeryproductmanufacturersprimarilybakeandsellbreadandotherbakeryproducts,includingcakes,pastries,muffinsandbiscuitsandoftenusethesamedistributionchannelsasfrozencakeandpastrymanufacturers.xThethreatfromrivalbakeryproductmanufacturershasbecomemorepronouncedinrecentyearsasAustralianconsumershaveincreasinglyoptedforfresh,innovativebakedgoodsthatareavailablefromin-storesupermarketbakeries,artisanalbakeriesandhotbreadfranchises.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202343Buyer&SupplierPowerWhatpowerdobuyersandsuppliershaveovertheindustry?Buyers:newdistributionchannelsreducetraditionalbuyerpowerheldbysupermarketsModerateDecreasingxKeybuyersfortheindustryincludegenerallinewholesalers,supermarketchains,foodserviceproviders,conveniencestoresandsportsstadiums.Itiscrucialforfrozenbakerymanufacturersofbothtakeawayproductsandproductseatenathometohavestrongrelationshipswitharangeofbuyers.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202344xWhiletheabilitytosecuresupermarketshelfspaceremainsimportant,frozenbakerymanufacturersaremovingawayfromtraditionaldistributionnetworksinfavourofconveniencestores,shoppingcentrekiosksandvenueswithhighpedestriantraffic,likesportsstadiums.Thisisservingtoerodethetraditionalbuyerpowercommandedbysupermarkets.Suppliers:supplycontractsbolstersupplierpowerModerateSteadyxPurchasesrepresentthelargestcostitemforfrozencakeandpastrymanufacturers,withmanyoftheingredientsusedtomanufacturethesebakedgoodssubjecttomarketpricefluctuationsarisingfromgrowingconditionsandglobalcommoditypricevariations.Thisincludescoarsegrains,sugar,oilandfatsandmeat.xContractswithfoodmanufacturershelpsmoothoutpricefluctuationsforfrozencakeandpastrymanufacturersandalsoassistwiththesecurityofsupply.However,theexistenceofsuchcontractsandanyestablishedrelationshipsorassociatedswitchingcostsmaygrantkeysuppliersadegreeofsupplierpower.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202345Howdosuccessfulbusinessesmanagebuyer&supplierpower?PassoncostincreasesFrozenbakerymanufacturersmustbeabletopassonanysustainedrisinginputpricestoremaincompetitive.Volatilepricesforinputslikesugar,flourandmeatcansubstantiallyaffectprofitmargins.EstablishsupplycontractsforkeyinputsFrozenbakerymanufacturersmustlockincontractswithsupplierstominimisevolatilityduetoupstreampriceshifts.Firmsmustavoidsupplychainissuestoguaranteeproductiondeadlines.SecureeconomiesofscaleSuccessfulfrozenbakerymanufacturershaveexpensiveandsophisticatedproductionsystemsthatdrivelabourproductivityandreduceper-unitproductioncosts.Large-scaleindustrymanufacturershavesignificantcostadvantagescomparedwithsmallercompetitors.DevelopmarketingexpertiseLeadingbrandsrequiresignificantmarketingtocommunicatetheirproducts’perceivedadvantagestoconsumers.Manufacturersseekingtobreakintocertainmarketsrequirehighlyeffectivemarketingandqualityproducts.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202346CompaniesFindoutwhichcompaniesholdthemostmarketshareandhowrevenue,profitandmarketsharehaveshiftedovertimefortheseleaders.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep2023476.Companieshttps://my.ibisworld.com/au/en/industry/OD5097/companiesKeyTakeawaysxTheFrozenCakeandPastryManufacturingindustryincludesmanysmall-scaleplayers.However,thestrongmarketpositionsofPattiesFoods,MrsMac’sandSaraLeetendtoovershadowthesesmallermanufacturers.xDespitetheirstrongmarketpositions,theindustry’smajorplayershavenotbeenimpervioustoconsolidationtrends.Theindustry’sthreelargestplayershaveallchangedhandsoverthepastthreeyears.MarketShare
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202348ChartdisplayscurrentyearonlyinthePDFversionofthisreport.Youcanviewanddownloadchartforallotheryearsassociatedwiththisindustryonmy.ibisworld.com.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202349CompaniesCompanyMarketShare(%)2024Revenue($m)2024Profit($m)2024ProfitMargin(%)2024PattiesFoods39.1340.0N/AN/AMrsMac’s13.0112.8N/AN/ASaraLee10.087.2N/AN/ASargentsPtyLtd4.035.0N/AN/AReadyBakePtyLtd3.530.0N/AN/AYoucanviewanddownloadcompanydetailsonmy.ibisworld.com.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202350ExternalEnvironmentUnderstandthe demographic,economicandregulatoryfactorspositivelyandnegativelyaffectingtheindustry.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep2023517.ExternalEnvironmenthttps://my.ibisworld.com/au/en/industry/OD5097/external-environmentHighlightsRegulation&PolicyModerate↓IncreasingAssistance↓LowSteadyKeyTakeawaysxRisingdisposableincomesaregenerallypositivefortheindustry,especiallyforthetakeawaysegment,whichreliesondiscretionarypurchases.However,consumerswithrisingincomesmaysubstitutefrozencakeandpastryproductsformoreupmarketchoices,includingfreshcakesandpastries.xBoththeFederalandstategovernmentsregulatetheproductionandsaleofprocessedfoods,includingfrozencakeandpastryfoods.Industrymanufacturersmustobservefoodandhealthregulationstoensurepropersafetystandardsforproducing,distributing,handlingandconsumingfood.ExternalDriversWhatdemographicandmacroeconomicfactorsimpacttheindustry?
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202352Risinghouseholddisposableincomecanboostsalesofhigh-endfrozendessertsandpastries.However,fallingdisposableincomecanalsobenefittheindustry,givenitsproducts’lowcostcomparedwithdiningout.Theindustrytendstobenefitmorefromanincreaseindiscretionaryincome,asthisstimulatesdemandforhigher-priceditemsthatattracthigherprofitmargins.Householddisposableincomeisexpectedtoedgeupwardsin2023-24.Frozenproductsdesignedfortakeawayconsumptionaresoldtocaterers,cafesandrestaurants,andfastfoodproviders.Althoughthismarketisasmallpartoftheindustry,itisanimportantandgrowingmarketfornicheoperatorsthatmakespecialtypastryanddessertproductsandrepresentsagrowthopportunity.In2023-24,growthindemandfromthismarketsegmentisexpectedtobesoft.Trendsinpercapitafatconsumptioncanindicatedemandfortheindustry’sproducts,asmanyfrozencakesandpastryproductsarehighinsugar,fatorsodium.Frozencakeandpastrymanufacturershaveaimedto
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202353counterthesetrends’effectsbyprovidinghealthieroptions,includinglow-fatorreducedsodiumoptionsandsmallerportions.Apparentfatconsumptionisexpectedtoclimbin2023-24.Theindustrytendstobenefitfromnegativeconsumersentiment,asconsumersaremorelikelytochooselow-costfooditemssuchasfrozencakesordessertstoeatathome,insteadofdiningoutfordessert.Conversely,apositiveindexcanrepresentathreat,asconsumersmayfavourdiningoutinsteadofpurchasingdessertsfromthesupermarket.Whileconsumersentimentisexpectedtoimprovein2023-24,itwillremainnegative.Whilefluctuationsinwheatcommoditypricessignificantlyimpactindustryprofitability,theyhavelessofaneffectonrevenue,astheindustryishighlycompetitive.Althoughcakeandpastryproducershavepassedsomecostincreasesdownthesupplychainthroughhigherprices,theyhavealsoabsorbedsignificantincreasesinthefaceoffiercepricecompetition,particularlyforlower-endretailproducts.Thedomestic
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202354priceofwheatisexpectedtodropin2023-24.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202355Regulation&PolicyModerateIncreasingWhatregulationsimpacttheindustry?TheAustraliaNewZealandFoodStandardsCodeThestandardssetoutintheAustraliaNewZealandFoodStandardsCodearelegislativeinstrumentsundertheLegislationAct2003.Thecodeenforceslabellingrequirementsforthefoodsector.Manufacturersmustprovideinformationonaproduct’snutritionalvalueandingredients.TheoverseeingbodyisFoodStandardsAustraliaNewZealand(FSANZ),anindependentstatutoryagencythatfallsundertheAustralianGovernment’sHealthportfolio.LabellingrequirementsAllfoodmanufacturers(includingfrozencakeandpastrymakers)arerequiredtotakereasonablestepstoestablishwhethertheirrawingredientscontainanygeneticallymodifiedfood.TheymustalsocomplywiththeCountryofOriginLabellinglawsthatcameintoeffecton1July2018.Severalindustrymanufacturerscompeteonthebasisofusinglocallysourcedpremiumingredients.ModernSlaveryAct2018FortheFrozenCakeandPastryManufacturingindustry,thislegislationmeansensuringthattheingredientsusedtomanufacturecakesandpastries,alongwiththeproductsthemselves,arenotmadeusingslavelabour.However,onlyahandfulofindustrymanufacturersgeneraterevenueofmorethan$100.0millionwiththisnewactoflittleconsequencetomostoftheindustry’soperators.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202356AssistanceLowSteadyWhatassistanceisavailabletothisindustry?Publicsupportdoesn’tapplytotheindustryTheFrozenCakeandPastryManufacturingindustrydoesnotreceiveanypublicsectorsupport.NationalBakingIndustryAssociationAnot-for-profitorganisation,theNationalBakingIndustryAssociation(NBIA)supportsthewiderAustralianbakingsector.TheNBIAworkstopromoteAustralia’sbakingindustry,providingaccesstoequipmentandingredientsuppliersviaaffiliationsandensuringaskilledworkforce.Italsoprovidesinformationaboutindustrydevelopments.AssociatedentitiesincludeBakingIndustryAssociationofQueensland,BakingIndustryGroupandBakingIndustryTrainingAustralia.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202357FinancialBenchmarksUnderstandaveragecostsforindustryoperatorsandcomparefinancialdataagainstkeyratiosandfinancialbenchmarksbrokendownbybusinesssize.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep2023588.FinancialBenchmarkshttps://my.ibisworld.com/au/en/industry/OD5097/financial-benchmarksHighlightsProfitMargin3.8%↑HigherthansectorAverageWage$40,135↓LowerthansectorLargestCostPurchases55.7%ofRevenueKeyTakeawaysxIndividualcoststructuresvarydependingonthetypeofproductsproducedandoperationsize.Theindustry’slargerplayersaregenerallymoreprofitablethansmallerplayersbecauseoftheireconomiesofscaleandscope.xIndustryproducersgenerallyrequiresizeablemanufacturingfacilitiesandexpensivemanufacturingequipmenttoproducebakeryproductsonalargescale.Whileproducerswhodonotownfacilitiesandequipmenttendtohavelowerdepreciationcosts,theyhavehigherrentcosts.xOthersignificantcostsincludemarketingandadvertisingexpenses.Thesecostsareparticularlyrelevanttotheindustry’smajorcompaniessuchasSaraLeeandPattiesFoods,whichrelyonconsumerbrandloyalty.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202359CostStructureChartdisplayscurrentyearonlyinthePDFversionofthisreport.Youcanviewanddownloadchartforallotheryearsassociatedwiththisindustryonmy.ibisworld.com.Whattrendsimpactindustrycosts?AutomationhelpscutwagecostsxWagesareoneoftheindustry’smostsignificantcosts,althoughwagecostsarelowerasaproportionofrevenuefortheindustrythanfortheoverallCakeandPastryManufacturingindustry.Thisfactorreflectstheindustry’sgreaterrelianceonautomatedproductionprocesses,asopposedtocakeandpastrymanufacturing’smoreartisanalcomponent.xTheindustry’sincreasedrelianceonpre-mixesandautomatedsystemsforpackingandpickinghasreducedtheseprocesses’labourreliance.xLoweremploymentnumbersandfallingaveragewagesunderliethedownwardtrendinwagesinproportionateterms.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202360VolatilepurchasepriceswreakhavoconprofitmarginsxTheindustry’skeyinputsincludewheat,sugar,fruitandmeat,allofwhicharesubjecttomarkedpricevariationsinlinewithchangingdemandandsupplyvariables.xThepricesofthesekeyinputshavebeenhighlyvolatileinrecentyears,especiallywheatprices,whichreachedrecordhighsin2022-23thankstoglobaldisruptionsassociatedwiththeRussia-Ukraineconflict.Domesticsugarpricesareexpectedtoreachnewrecordhighsin2023-24,addingtocostpressures.ProfitmarginsunderpressurefromvariousquartersxProfitabilitydependsonthesizeofacompany’soperationsanditsproductrange.Giventhelowcostoftheindustry’smajorproductsegments,companiestendtobemoreprofitableiftheycanattaineconomiesofscaletolowerper-unitcosts.xIndustryprofitmarginshavebeenunderpressureinrecentyearsinthefaceoffiercepricecompetitionandagrowingrelianceonpricediscountingforproductseatenathome.Volatileinputcostshavealsonegativelyaffectedprofitmargins.xWhileprofitmarginshavefluctuatedonayearlybasis,theyhavetrendeddownwardsovertheperiod.HeftymarketingbudgetsunderpinbrandloyaltyxOthercostsincludemarketingandadvertisingexpenses.Thesecostsareparticularlyrelevanttotheindustry’smajorcompaniessuchasSaraLeeandPattiesFoods,whichrelyonconsumerbrandloyalty.Brandloyaltyhashelpedtheindustrylimitdeclinesinbrandedproducts’marketshare,despiteincreasingacceptanceofprivatelabelproducts.xAlsoincludedinothercostsareoverheadexpenses,interest,researchanddevelopment,andtransportcosts.xOthercostshavefalleninproportionateterms,primarilybecauseofrisingpurchasecosts.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202361
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202362KeyRatiosYearRevenueperEmployee($)RevenueperEnterprise($million)EmployeesperEstab.(Units)EmployeesperEnt.(Units)AverageWage($)Wages/Revenue(%)Estab.perEnterprise(Units)IVA/Revenue(%)Imports/Demand(%)Exports/Revenue(%)2006-07214,9943.210.014.944,58220.71.529.523.53.02007-08212,7723.19.914.746,37221.81.535.124.62.82008-09225,3863.310.514.547,05520.91.433.425.02.52009-10243,5573.410.714.041,85717.21.331.822.92.22010-11253,5963.09.711.743,12617.01.229.925.92.12011-12253,9363.410.913.348,51319.11.231.625.32.02012-13234,9773.312.014.245,33119.31.231.628.82.62013-14264,9293.511.413.244,11016.61.227.232.12.72014-15259,1943.411.613.344,58317.21.129.634.52.72015-16247,3783.512.514.346,23518.71.131.437.42.72016-17310,1734.111.613.345,78314.81.126.535.02.52017-18309,0334.111.513.149,79516.11.124.336.92.82018-19309,9623.911.012.545,82114.81.123.639.93.02019-20321,9694.211.513.046,51414.41.120.741.33.12020-21316,6804.111.613.040,57612.81.123.040.92.52021-22327,0793.910.711.939,31512.01.120.041.92.42022-23336,7973.910.511.639,97011.91.118.243.02.32023-24344,0973.910.311.540,13511.71.119.143.92.2
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep2023632024-25352,9364.010.311.440,87111.61.119.444.42.32025-26355,1134.010.411.441,46511.71.119.044.02.32026-27362,8504.110.211.241,81911.51.119.044.52.32027-28366,4764.110.111.142,37411.61.119.045.12.32028-29371,1424.110.111.042,85711.51.119.145.92.32029-30375,5654.110.011.043,45011.61.119.146.22.3
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep202364KeyStatisticsDiscover14yearsof historical,currentandforward-looking industryperformancedataintableformat.
IBISWorld|FrozenCakeandPastryManufacturinginAustraliaSep2023659.KeyStatisticshttps://my.ibisworld.com/au/en/industry/OD5097/key-statisticsIndustryDataYearRevenue($million)IVA($million)Establishments(Units)Enterpr
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