The New Zealand baking industry is diverse and provides more than 8500 full time equivalent jobs in 20 plant bread and cake bakeries and 856 other bakeries, with overlaps into the takeaways and food service industries. The businesses in the industry can be divided into five broad categories:
Multinational plant bakeries
The big two, Goodman Fielder and Weston Foods, are characterised by
• Vertical integration: they do both milling and baking.
• Industrial production, line manufacturing techniques.
• Focus on marketing food staples.
• In-house R&D facilities.
• Head offices offshore (Australia)
• Trans- Tasman operations.
• Dominance of packaged bread industry and may own specialised subsidiaries producing pastries, pizzas and suchlike.
Specialised enterprises
A diverse group of medium sized businesses many of which have grown from single small or provincial bakeries. These specialised bakeries are characterised by:
• Use of industrial production line techniques.
• Often technical specialisation in a niche market.
• Often focus on export for growth.
• Often innovative.
• Found throughout New Zealand.
• New Zealand ownership and control.
Craft or artisan bakeries
A large number of small businesses, sometimes with multiple outlets, characterised by:
• Diverse product range.
• Make and sell either from base raw materials (“scratch”) or premixes.
• Local ownership.
• Short production runs.
• Focus on local market.
• May be versatile.
• Sometimes ethnic focus.
• May grow to become a specialised enterprise.
Franchises and in-store bakeries
Chains of specialised bakeries, for example Bakers Delight, Cheesecake Shop, Brumbys, and in-store supermarket bakeries which have some of the characteristics of franchises:
• Procedures and formulations centrally controlled.
• Look and promotional material consistent with franchise.
• Less scope for innovation.
• Strong focus on image.
• At risk from changes in food fashions.
• National spread.
Cafe bakeries
Characterised by:
• Food, drink and social relaxation.
• Baking from premix or frozen dough.
• Emphasis on service and style.
• Urban, affluent market.
Rationalisation of plant bakeries
• Multinational branded food businesses are concentrating on plant capitalisation and utilisation.
• Importing/exporting products made for the whole business, e.g. having one frozen dough plant for both Australia and New Zealand rather than one in each country.
• Moving to more automation and less labour (which leads to less skill).
Artisan/craft bakeries threatened by instore bakeries
• Supermarket multi-nationals have greater access to supplier product development and innovation resources, creating innovation.
• Instore bakeries (“ISBs”) have far greater reach to mainstream customers. They do not have to rely on educated or informed customers.
• ISBs often offer total packages with regard to product range and cross merchandising.
• ISBs in some cases offer attractive working environments such as up-to-date equipment, training systems, better hours and a career path).
• ISBs introduce latest merchandising systems and equipment.
• ISB must capitalise on “bakery” being a manufacturing unit.
Artisan/craft bakeries threatened by franchised bakeries
• Franchised bakeries have inhouse training and systems.
• Franchised bakeries have a local look and feel but are often working globally or nationally.
• Franchised bakeries often have many of the same resources as supermarket ISB, i.e.
- Access to suppliers’ training
- Attractive working environments
- Career path for bakers
- Latest merchandising displays
Unskilled labour in all bakery segments
• Driven by consistently reviewing and seeking to reduce labour and ingredient costs rather than by seeking to increase sales.
• Lack of government focus on apprenticeships in general. (This, however, is now changing!)
• Lower wages often paid to bakers and apprentices and lack of respect and professionalism for bakers in general.
• Automation: the introduction of machinery to take over what was skilled labour work.
• Industry facing increased costs from OSH and HACCP regulations and the need for more stringent food safety programmes.
• Industry competing for the consumer’s disposable income against both food and entertainment options, e.g. McDonald’s, KFC, Lotto, Internet.
• Large globally franchised “eating stations” now beginning to offer bakery items or treats, e.g. cookies, mud cakes, cake based desserts, croissants and danish, at outlets such as service stations.
• These stations offer quick service, and consistent and constant menu offerings . They same items are always available. How many bakeries offer this?
Changing eating habits (low fat, organics, etc.)
• Seen as a threat if baking doesn’t react to changing consumer demands.
• Craft bakeries must also offer products to this market otherwise they will lose out.
Lack of professionalism and passion within the baking industry
• Baking not seen as a “trendy” career.
• Often decisions are made by non-bakers and who have no passion for the craft or trade, with long term negative results.
• Shop layouts and frontages must be kept up-to-date.
• Must invest in latest designs.
Trends in the New Zealand baking industry
Instore bakeries offering wider product range
• Identifying trends and using "branding power" and market to introduce new products.
• Often contracting out "House branded" products which compliment freshly baked in store products i.e. ciabatta, speciality cakes and gateaux.
• Creating home baked feel.
• Creating categories e.g. children's products
• Dessert and convenience products are becoming popular.
• In New Zealand, instore bakery products are 85% impulse buys. Only 15% of customers have bakery products on their shopping list.
This indicates opportunities for greater awareness and sales.
• Stronger focus on health and nutritional benefits by consumers
• GMO in NZ is a big issue. All larger multi-national retailers and manufacturers are going GM free, a consumer driven initiative.
• Low fat becoming more popular, however, not as much as in the USA and UK. Still a niche market, though important.
• Organics growth in line with international trends
• Baking is going “back to the future”: going back to rustic/basic products but using futuristic technology.
Consumers driving for more artisan style product
Home-baked look requiring body, texture and flavour. Often all natural ingredients used.
More meals being consumed at home
• Home entertainment becoming popular, with TV celebrity chefs making cooking look easy.
• Dessert style cakes, gateaux, tarts are becoming popular as a quick, simple endings to the dinner party
• It is often seen as trendy to have purchased products from the local "in" bakery
• Must be rustic, home baked look!
Home baking is back
• Also following on from the Naked Chef and Nigella Lawson (and myself of course!).
• Informative, well written baking books are becoming popular — a must-have on the coffee table!
Creating bakeries as food destinations
• Complement your products with associated products, for example bread (sourdough, fig and aniseed) with a selection of cheeses, olive oils, dips.
• Use other regional foods within your bakery match your products with another artisan producer and vice versa.
• Sell books (baking/cooking) alongside your products.
• Offer exceptional coffee to go with your baking.
Towards a favourable future
Continued improvements in quality, functionality and consistency of raw materials
The baking industry is in competition with other sectors of the food industry as much as it is in competition with itself. For those who can afford to eat, all foods will continue to get better. There is much that can yet be done to improve the quality and properties of flour and other ingredients through biotechnology.
Continued improvements in processing that will enhance the value of products for both the manufacturer and the consumer
The manufacture of bakery goods can be seen as a complex multi-stage process with difficult machines and difficult materials. Emerging technologies offer pathways to more efficient, flexible, controlled processing through more advanced control systems.
Educate the consumer by better marketing and promotion of bakery products
Consumers are increasingly concerned about food safety issues and demanding proof of safety. The baking industry can, and should, continue to improve the safety of its foods.
Improved profile for the baking industry
The baking industry suffers from being so obvious and routine that it is invisible. Enhancing the image of the industry through promoting a sense of professionalism would assist in recruitment and retention of skilled staff, enhancing consumer respect for the industry’s products.
Creating a skilled, versatile workforce
One of the most significant changes currently in New Zealand industry is in upskilling the workforce through training within industry.
Most of the “catch up” in education of the workforce currently beginning is not taking place through the traditional tertiary trainers. The baking industry will need to ensure that gaining skills is an important part of industry development.
To ensure that training continues to be relevant, it will need to be industry rather than provider driven.
Improved communication within and by industry to the consumers and public
Ideas and knowledge tend to multiply when shared. Exchange of generic knowledge within the industry could be made easier through seminars and company-specific know-how should be promoted through training programmes. Enhanced communication between suppliers and consumers results in improved ability to meet consumers’ needs.
