According to Euromonitor International research, retail value sales of biscuits in Australia are expected to rise by 5% in 2011 (in fixed 2011 exchange rate terms) to total US$1.5bn, whilst retail volume sales will increase by 2% to 128,100 tonnes.
Value growth is being driven by growing demand for premium indulgent products viewed as affordable luxuries by Australian consumers.
Savoury biscuits and crackers, accounting for some 40% of overall value sales of biscuits, is expected to be the most dynamic category in 2011, rising by 6% in retail value and by 3% in retail volume terms.
Savoury biscuits are often preferred over savoury snacks, such as chips or crisps, since they typically contain lower levels of calories and fat. Multi-pack formats within savoury biscuits and crackers also offer portion control and convenience for different snacking occasions.
The successful relaunch of Shapes Sensations, Arnott’s Biscuits’ leading brand, accounting for 73% of category value sales in 2010, will contribute to savoury biscuits and crackers’ strong performance in 2011.
The brand has repositioned itself to capture the market for adult snacking and entertaining occasions through an extensive marketing campaign and discounted bulk-buy promotions in supermarkets throughout Australia.
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By GlobalDataSweet biscuits, accounting for 65% of overall volume sales of biscuits, is expected to increase by 4% in retail value and by 1% in retail volume terms in 2011.
The ongoing Australian Better Health Initiative, a national programme that aims to reduce risk factors for chronic disease, such as some cancers, heart disease and type 2 diabetes, announced the continuation of the ‘Measure Up’ campaign in 2011. ‘Swap It, Don’t Stop It’ is currently underway as the latest health awareness initiative promoting preventative health measures and encouraging consumers to choose healthier food options. Therefore, sweet biscuits are coming under scrutiny due to their high sugar and fat content.
Even though health and wellness movements such as these are causing changes in the formulation of products and the use of ingredients in many bakery categories, for sweet biscuits, indulgence will remain the primary trend, as these products are becoming increasingly associated with affordable treats.
Cookies will record retail value growth of 6% in 2011 to reach $148m, whilst retail volume sales are set to increase by 3% to 11,400 tonnes. Consumers of cookies are more willing to pay a premium for branded products in order to treat themselves rather than seek value through private label offerings.
Cookies are increasingly being added to other indulgence products such as ice cream and confectionery and used as an everyday treat. Manufacturers have reacted appropriately and extended the range of chocolate and fruit and nut cookies to include better-for-you oat, fruit and nut flavour combinations, as well as indulgent chocolate chip, brownie, fudge, caramel and nut variants. Paradise Foods, for instance, offers a range of low-fat Vive Lites Cookies and better-for-you Vive Wellbeing Cookies in regular and portion-controlled snack pack formats.
Responding to the consumer trend of seeking quality and value-for-money, Kraft reformulated the Chips Ahoy! range to feature real chocolate chips instead of compound chocolate in 2011.
The chocolate-coated biscuits category is set to increase sales to $274m in value and 22,300 tonnes in volume terms in 2011, posting healthy growth of 5% and 2% respectively. Arnott’s Tim Tam remains a successful growth driver due to a loyal following and continued brand innovation in terms of core range flavour extensions and new formats and textures.
Tim Tam Classic Dark, for instance, has witnessed significant sales value growth since its relaunch in 2010, and the release of two new dark chocolate Tim Tam flavours (Rum & Raisin and Mint) in March 2011 is anticipated to further impact the category in terms of dark chocolate range extensions.
While there are private label equivalents available, allegiance remains with branded products as an indulgence purchase. Household penetration is high and volume sales are being boosted by periodic “2-for-1” and “3-for-1” deals.
Further development and growth is anticipated within dark chocolate biscuit coatings and fillings, in line with the diversification seen by Lindt, Green & Black’s and Whittaker’s within chocolate confectionery. Consumers associate dark chocolate with health benefits such as antioxidants and tend to be quite passionate about their products. The reception for the Rum & Raisin and Mint Dark chocolate Tim Tam flavours will no doubt provide an indication of future market directions.
In 2011, private label range extensions are proving popular amongst value-conscious consumers as a post-recessionary measure to curb household expenditure, particularly more premium private label lines that closely imitate leading branded products. However, biscuit manufacturers are engaging in extensive price discounting in order to ensure that branded offerings remain attractive to thrifty consumers.
Widespread price promotions have been impacting all areas of biscuits, irrespective of the rising price of global commodities such as cereal and cocoa throughout 2011. It is expected that prices across the board within biscuits will increase by a moderate 3% in 2011 to an average of $11.40 per kg.