The Australian Society of Baking Conference - Joy of Baking

“Window on the World”Rani Berry AB Mauri Marketing Manager

Market Insights - Agenda

• Global Category Overview

• New Product Launches

• New Product Launches by Region

• Front of Pack Claims

• A look at the Consumer • A look at the Consumer

• Global consumer

• Local consumer

• The Trends

• Health & Wellness

• Easy and Affordable

• Ethical and Sustainable

• Smart & Connected

Sources of Information

• Datamonitor

• Euromonitor

• Mintel

• Innova• Innova

• Ivestec Securities

• Imperial College; London

• Rutgers University; NJ

• Sosland publishing

• AB MAURI research intelligence

A Global Resource…with operations in over 50 countries

2012 New Product Launches

2012 saw 21,500 new products launched globally within the Bakery Segment, a 7.5% increase from 2011.

Cakes, Pastries and Sweet Goods

4,000

4,500

5,000

Nu

mb

er

of

Pro

du

cts

Lau

nch

ed

22%

16%

36%

17%

9%Bread and Bread Products

Sweet Cookies

Baking Ingredients and Mixes

Savoury Crackers0

500

1,000

1,500

2,000

2,500

3,000

3,500

2009 2010 2011 2012

Nu

mb

er

of

Pro

du

cts

Lau

nch

ed

Bread and Bread Products Bakery Ingredients and Mixes

Cakes, Pastries and Sweet Goods

Source: Mintel GNPD Database

New Product Launches by Region

20,000

25,000

0

5,000

10,000

15,000

2011 2012 2013

North America

Middle East & Africa

Latin America

Europe

Asia Pacific

2012 ‘on-pack’ Product Claims

Cleaner label and allergy free bakery products rank highly. While most claims have remained consistent for the past few years, the ‘seasonal’ claim has disappeared in favour of ‘ease of use’.

2500

3000

0

500

1000

1500

2000

Vegetarian No Additives / Preservatives

Ethical -Packaging

Low / No / Reduced Transfat

Kosher Low / No / Reduced Allergen

Wholegrain Gluten Free Ease of Use Organic

Source: Mintel GNPD Database

Consumers in 20122012

Global Consumer and Industry Outlook

Current and Future Outlook • Global population exceeded 7 billion in 2012 with the global

population expected to reach between 8.3 and 10.9 billion by 2050.

• Globally, bakery in the single largest category for NPD / NPL• Globally, bakery in the single largest category for NPD / NPL

• As of 2011/2012, Mexico has overtaken the US as the country with the highest percentage of obese people in its total population.

• The total number of people with diabetes is projected to rise from 171 million in 2000 to 366 million in 2030.

• The global functional, allergen free, organic and other healthy foods market will push through the $1 trillion (€770m) mark for the first time in 2017, as consumer interest in preventing illness via food snowballs.

Australian Consumer and Industry Outlook

• Baked goods records 4% retail value growth to be worth A$5.8 billion in 2012.

• Australia has the 7th highest prevalence and 6th highest incidence of type 1 diabetes in children aged 0-14 years (Australian Institute of Health and Welfare 2010, 2011).

• The total annual cost for people with type 2 diabetes in Australia is

Current and Future Outlook

• The total annual cost for people with type 2 diabetes in Australia is estimated at $6 billion (Colagiuri et al., 2003) and $570 million for people with type 1 diabetes (Colagiuri et al., 2009a).

• Fourteen million Australians are overweight or obese. If weight gain continues at current levels, by 2025, close to 80% of all Australian adults and a third of all children will be overweight or obese.

• Most Australian adults have a daily salt intake of about 10 grams. The ‘Adequate Intake’ corresponds to 1.15-2.3 grams of salt.

• Private label products accounted for 14% of retail value sales in 2012.

The Trends

HEALTH & WELLNESSHealth is addressed in a more holistic and personalized manner.SENSORY & INDULGENCEThe driving force behind higher

INDIVIDUALISM & EXPRESSIONToday’s consumers are increasingly empowered and confident.

EVOLVING LANDSCAPES

Eight Mega-Trends are Driving Changes in Consumer Packaged Goods

The driving force behind higher expectations of quality and variety.COMFORT & UNCERTAINTYRising stress and uncertainty are catalysts for safety, tradition, simplicity, and reassurance.SUSTAINABILITY & ETHICSShared social and environmental challenges command attention.

EASY & AFFORDABLEMaximization of scarce time and money shape decision-making.

SMART & CONNECTEDTechnology is increasingly changing and shaping consumer behavior.

EVOLVING LANDSCAPESSocio-demographic and economic trends are changing, long term.

SENSORY &

WellbeingPersonalised Health

MEGA-TREND TREND SUB-TREND

• Guided Health• Disease Management • Weight Management • Moderation & Avoidance• Ethical Wellbeing• Fresh & Natural

Premiumization• Experimentation • Sensory Fusion

HEALTH & WELLNESS

Trends and Sub Trends

SENSORY & INDULGENCE

INDIVIDUALISM & EXPRESSION

COMFORT &

UNCERTAINTY

PremiumizationNovelty

• Sensory Fusion• Authenticity

CautionAnchoring

• Simplicity • Cocooning • Trust & Transparency• Localism

IndividualitySpecificity

• Right-For-Me• Made-For-Me• Single Lifestyles

Source: Datamonitor analysis

SUSTAINBILITY & ETHICS

EASY &

Environmental & Social

Responsibility

MEGA-TREND TREND SUB-TREND

• Cruelty-Free• Fairly Traded• Resource Scarcity• Biodiversity

Time Scarcity

• Bargain Hunting • Private Label Evolution

Trends and Sub Trends

EASY & AFFORDABLE

EVOLVING LANDSCAPES

SMART & CONNECTED

Time ScarcityValue

• Private Label Evolution• On-The-Go • Efficient & Effective

Digital Consumption &Lifestyles

• Next Generation Shopping• Informed Shopping• Smart Living• Hyper-Connection

Socio Demographic & Economic Change

• Migrating Influence• Widening Inequality• Population Engines• Aging Populations• Situational Complexity

Source: Datamonitor analysis

Focus Trends

Trend #1: Avoidance - Carb / Gluten / Wheat

Trend #2: Guided Health - Protein revolution

“A focus on the enduring mega-trends should remain the core priority”

Trend #2: Guided Health - Protein revolution

Trend #3: Disease Management - Sugar Free or Reduced Sugar

Trend #4: Weight Management - Calorie Controlled

Trend #5: Time Scarcity and Value – On the Move & Kits

Trend #6: Environmental & Social responsibility

Trend #7: Digital consumption and Lifestyles

Trend: Carb / Gluten / Wheat avoidance

Trend: “Carbs are Bad”

Unless you play sport for Australia or run marathons, you don’t need carbs.“Elite Member” Cheappinz on website:

ironmagazine.com:

The Examples: Reduced or Low Carb

Innovative white bread with 70% less carbohydrates. Only 3 grams of carbohydrates per slice. Contains 70%

It is 59% less carbohydrates than a normal piece of rye bread. Carbohydrate content is (19%), but

Low-carb. Only 6.7% carbohydrate. 7.2% fiber. 25% protein.

carbohydrates per slice. Contains 70% less carbohydrates than regular white bread.

Low carbohydrate. 65% less carb than ordinary white bread. Contains 13% fiber. 15% more protein. Contain 19% seeds.

Low carbohydrates fitness bread suitable for the evenings.

of rye bread. Carbohydrate content is (19%), but it contains 12% protein and it's high in fiber (fiber 15%).

The Examples: Industry Response

BRINGING

BREAD

BACK INTO

FASHION FASHION

Trend: HIGH in PROTEIN

The Examples: High Protein

Japan: Pound Cake Mix. Added protein. It is a rich moist cake mix flavor.

7g of protein per serve. Contains hulled hemp seeds that provide a perfect vegan source of protein, omega 3 and essential amino acids.

High protein bread for enhanced muscle development.

Dr Zak’s protein bread is a nutritional revolution for athletes and body builders, who traditionally have shied away from bread due to their very high carbohydrate and low protein content.

Body Attack Protein Pancake is composed of 36 grams of high-quality protein and sweetened with Stevia

The Examples: High Protein & Low Carbohydrate

This new high protein and low carb bread evening breadThis bread only contains a minimal proportion of carbohydrates, but has a high content of protein and is suitable for those following a weight management diet.

2 in 1 day and night bread

The white or ‘day’ side is packed with grains and carbohydrates to ensure consumers are satisfied at breakfast time.

While the brown or ‘night’ side of the loaf is specifically dedicated to wheat and soy protein.

Trend : Sugar Free or Reduced Sugar

• Approximately 1 million Australians have been diagnosed

with diabetes.

• If diabetes continues to rise at the current rates, up to 3 million Australians over the age of 25 years will have diabetes by the

The Facts

Australians over the age of 25 years will have diabetes by the year 2025.

• For type 2, this is likely driven by rising obesity, the ageing population, dietary changes, and sedentary lifestyles.

• Obesity is a major contributor to type 2 diabetes with estimates showing that eliminating obesity from the population can potentially reduce the incidence of type 2 diabetes by over 40%.

The Examples: Sugar Free or Reduced Sugar

Suitable for diabetics. Gluten free. Suitable for coeliacs.

D-tick is a food approval program designed to make it

Diabetic friendly. Sprouted grains. Suitable for vegan. Certified organic grains. Low

Sans Sucre created the sugar-free brownie mix for those trying to cut back on their sugar, fat, cholesterol and calorie intake.

25% less sugar. No artificial colors or flavors.

Low fat. Low calories. With vitamins and minerals. Sugar free.

program designed to make it easy for people managing their blood sugar to identify healthy food options.

Certified organic grains. Low glycemic.

CALORIE CONTROLLED

Trend: Junk Health

• New trend that has emerged from the Health and Wellness mega trend.

• To deter consumers thoughts of ‘junk’ foods manufacturers are taking products and transforming them into the ‘better for you’ category with the use of technology. you’ category with the use of technology.

• Products containing probiotics, added protein and ‘fat blocking’ ingredients are beginning to hit the shelves.

• Calorie content claims are also making there way back to labels as calorie controlled diet plans are increasing in popularity.

Indulgence

The Examples: Calorie Controlled

51 calories per slice.

Calorie content is displayed, reduced fat & sugar, added vitamins & minerals, all natural.

Convenience

Health

Only 90 calories. Contains 9g protein. 0g sugar. 74% fewer net carbs than 2 slices of wheat bread.

80 calories per slice. Excellent source of fiber.

Contains only 40 calories per slice.

Contains 110 calories

Trends # and # :

“The New Convenience”

Trend: Breakfast on the Move

Australians spent $11.8bn on breakfast in 2012Food spend outweighs drinks spend four-to-one

BREAKFASTSPEND

Food Drinks

Retail 60% 17%

Foodservice 20% 3%

$1.14

$2.56$2.25$2.20$1.69

$1.19

Spend per day

who

wherewhen

what

The average Australian ate breakfast…

This equates to around 79 skipped breakfasts per person per year

5.3times a week in 2012.

Breakfast consumption predominantly occursin the home

Foodservice 20% 3%

At home

At work/school

Third place

On the move

Source: Datamonitor analysis

Trend: Breakfast On the Move Meal

Rate of growth in occasions per adult per year (compound annual growth rate), by location, 2011–16

AT-HOME MEALS ARE ON THE DECLINE

By 2016, Australian adults will eat 15.7 fewer breakfasts at home. Conversely, meals and snacksconsumed at a “third place” will rise at the fastest rate, as consumers spend less time planning andpreparing meals, and as the value proposition of foodservice outlets improves.

Source: Datamonitor analysis

The Examples: Breakfast Alternatives

The Examples: Bakery kits and par-baked products

Homemade No Knead Bread Mix.

A new yeast bread mix that is ready in less than an hour. Simply Homemade allows home bakers to prepare fresh baked bread in three easy steps – just stir, rise and bake.

Just break and bake

Just break apart the refrigerated dough, place onto a cookie sheet and bake in your oven. In just a few minutes, enjoy a warm chocolatey cookie.

Ready to bake sliced bread

Baking mix without ingredients to add

Tesco Easy Home Bake

Trend: Sustainability and Ethics

Sub-trendTrendMega-trend

Environmental Resource Scarcity

Regional is the new global!

There is an increase in focus on product source consequentlydriving interest in provenance and

SUSTAINABILITY & ETHICS

Environmental Responsibility

Biodiversity

Social Responsibility

Cruelty-Free

Fairly Traded

driving interest in provenance and‘artisan’ products. Consumers want to know where their choice productsare coming from as it creates anadded appeal of history, traditionand culture to the brand andproduct experience.

The Examples: Sustainability and Ethics

Compostable ‘breadbox’ meeting sustainable

requirements of concerned consumersIt has been designed to hold a quarter loaf of bread.

Edible labels and bar-codes Can be stuck to the wet surface of a loaf or pastry and are then safe for the consumer to eat along with the product.

Palm Free or certified sustainable palm bakery products

Woolworths announces removal of caged hen eggs by 2018

Trend: Access Anything, Anytime A virtual supermarket for on-the-go shoppers

• Consumers are more connected than ever before in human history• 60% of the Australian population now owns a smartphone. • You Tube is the 2nd largest search engine in the world and 4th most visited site online • 93% of the world’s population under the age of 40 have joined social networks• Social networking surpassed emails 2.5 years ago

Major supermarket goes mobileIn an Australian first, Woolworths launched an app allowing consumers to grocery shop from their mobile phone, with purchases delivered to their home or work at a convenient time for them. The app offers customers more choice in how and when they do their grocery shopping. Moreover, the functionality and versatility of the app makes it useful to shoppers at various stages of the path to purchase, and is certain to boost adoption of online shopping in Australia.

Online grocery shopping in Australia ($ millions), by device, 2011-16

2011 spend

2016spend

CAGR 2011-16

PC 1,487 2,673 12.4%

Tablet 23 146 45.0%

Smartphone 8 39 38.9%

TOTAL 1,517 2,858 13.5%

• Social networking surpassed emails 2.5 years ago• Over 70 million business professionals are on Linkedin

• Social Media has changed the world

• Link

AB MauriGlobal Expertise, Local KnowledgeGlobal Expertise, Local Knowledge

We Know Baking!

AB IMAURI