Major marketing report, ass1 Saskia Platzer, Mark101

1. The size of the Market (for both dollar and item sold)

The Australian biscuit market has one of the highest per capita biscuit consumption rates in
the world. Precovid, the Australian biscuit industry revenue was expected to decline at an
annualised 3.3% over the five years through 2018-19, to AUD 780.0 million.
However, a shift in the industries revenue from decline is now exponentially growing as a
result of the global pandemic.

Because of COVID19, consumers were purchasing large amounts of staple foods, long-life
pantry supplies, and sweets for a stay at home lifestyle. This growth of revenue is now
calculated to grow at an annualised 3.1% over the five years through 2020-21, to $1.1 billion
(Richardson,2021).

In general, the primary activities of this industry can be summarised as; biscuit and dough
manufacturing, Ice-cream cones or wafers manufacturing and Rusk manufacturing. The
Australian biscuit market can be divided into the categories; product type, competitors and
distribution channels.

Segmentation by product type

The product types within the Australian biscuit market segment into three categories;
1. Sweet Biscuits
2. Savoury Biscuits
3. Chocolate Biscuits

Segmentation by competitors

Competitors in the biscuit industry consist of;

1. biscuit manufacturers such as Arnotts and Kinrise,
2. Bakeries

While not a competitor as such, manufacturers and bakers also compete with people making
their home-baked goods.

Segmentation by distribution channel

The various produce is then categorised through the distribution channel segmentation. The
Australian biscuit distributed through supermarkets, exerting a majority of the Australian
Biscuit Market share in 2019, hypermarkets, online, as well as downstream domestic
channels including convenience stores, vending machines, grocers, cafes and so on
(TechSci Research,2020).
Major marketing report, ass1 Saskia Platzer, Mark101

The figure above shows the percentage of the distribution channels within the segmentation
of the market (Richardson, 2021).

The produce distributed fall under the market leaders that operate within the Australian
biscuit market, those being, Arnott’s Biscuits Holdings Pty Limited, Green's Foods Holdings
Pty Limited, Unibic, Byron Bay Cookie Company, Waterthins, Mondelez, Ausbic Pty Ltd,
among others (Richardson,2021).

2. The market share of the key products (both market share for companies, and individual
products)

Market share by companies

The research found that the Australian biscuit market has only a handful of major
companies, accounting for 80% of the industry which is a very concentrated market.

Beginning with the largest competitor, Arnotts accounts for 60.3% market share, Kinrise
PTY LTD for 11.8% market share, Byron Bay cookies fo (3.0 %m Kez’s Kitchen (2.0%), and
the remaining 22.9% are smaller players.

Market share by-products

Market share of individual products within the Australian biscuit manufacturing can be
broken down into three segments:

1. Sweet biscuits: Cream biscuits, shortbread biscuits, cookies and so on.

2. Savoury biscuits and snacks: Crackers, and flavoured snacks.
3. Chocolate biscuits: sold on a premium level, chocolate bars, and confectionery
cakes over the past five years.
Major marketing report, ass1 Saskia Platzer, Mark101

The graph below, provided from the Ibis report, provides a percentage breakdown of the
above segments.

Changes in the competitive landscape:

With the increase in consumer demand for confectionery and snack food, Australian biscuit
companies and products are facing higher external competition. The desirable modern-day
lifestyle of eating fresh foods with fewer preservatives resulting in new competitors producing
freshly baked cookies marketed with the selling point of, the baked the same day as
purchase. Australian biscuit companies such as Mrs Fields and cookie man are among the
fresh bakes that ship directly to their client base and the increasing demand for in-store
supermarket bakeries such as Woolworths and Cole who produce fresh baked goods each
day.

3. The reasons why consumers purchase the products; their underlying motivations

Biscuits are bought to cater to the consumer’s lifestyle and occasions, they are purchased
either exclusively as treats, convenient on the go snack, meal replacements, and/or
indulgence (Skelly,2015).

Note: Further explore why consumers purchase biscuits and what their underlying motivation
is.

4. Key emerging trends in the market

The food industry, specifically the Australian biscuit market, benefits from consumers
purchasing behaviours influenced by trends within their lifestyles (Kneebone). Consumers
are always following trends, and are influenced strongly by cultural, social, personal and
psychological behaviours.

The consumer’s characteristics,

Major marketing report, ass1 Saskia Platzer, Mark101

The Australian biscuit market has noticed a change in societal traditions of the morning and
afternoon tea and biscuits are gradually disappearing because of poor time consumers
on-the-go lifestyles. Consumers are now reaching for snack-size produce to eat on-the-go.
Arnotts took this trend emerging in 2019 and launched ranges of chocolate block and bar
versions of the biscuits that were common with teas.

With regards to 2020 trends, COVID19 dramatically affected the biscuit industry, increasing
its revenue by 3.1%. Although the lockdown stage did take consumers back to their old roots
of staying at home snacking and eating, there is reported to be a decline in the biscuit
industry once consumers go back to their old on-the-go lifestyle. An ABS article on peoples
lifestyles during April and May recorded that, “22 per cent who said they are eating more
snack foods such as chips, lollies and biscuits” (ABS,2020)

Health consciousness is the most dominant emerging trends within the biscuit market,
increased public health awareness have now reduced the demand for sugary and sweet
produce. For instance, the emerging trend of a low-fat diet has declined the sales of
chocolate biscuits.

With the rise of awareness for sustainability, consumers are becoming more ecologically
conscious. Manufacturers need to strive in producing more environmentally friendly
packaging. One of the market leaders in the biscuit industry, Campbells Arnott’s, were
awarded the American Power Conversion, APC, award. Their stand out achievement was
the reduction of 500 palettes and 3000 tones of packaging goods annually (Ong, 2014).

5. Macro environmental forces that could lead to opportunities or threats in the market.

The macro-environment is “the larger societal forces that affect the microenvironment –
demographic, economic, natural, technological, political and cultural forces”
(Armstrong,2021). Within the Australian biscuit market, the Marco environment is always
evolving through the influence of the five factors driving opportunities and threats.

Economic: Due to the global pandemic household disposable income is expected to

decrease in 2021, as a result, a consumers decision on purchasing biscuits will be the more
affordable option.

Technological: To be further research

Natural: The global pandemic resulted in the inability to trade produce globally, this resulted
in fluctuations of the importation rates due to the potential barriers. The supply of raw
materials for the biscuit industry fall under natural factors, one of the main products needed
within the Australian biscuit industry is Wheat. Due to wheat being a key ingredient price
inconstancies can easily affect the industry’s economy. The Ibis report states that “2020-21,
the domestic price of wheat is expected to decrease”,(Richardson, 2021), which will
Major marketing report, ass1 Saskia Platzer, Mark101

positively help the revenue of the industry. This report also highlights the second key
ingredient, sugar, prices expected to fall in 2021 (Richardson,2021).

Sourced from the Ibis world report, this figure highlights the external drivers for biscuit
manufacturing within the past 5 years.

The threats of consumer environmental forces consumers to consider how sustainable they
are. Positively, one of the market leaders, Arnotts have considered how environmentally
sustainable their brand is. This is evident across their website where they highlight
commitments to sustainability, such as:
1. Arnott’s Commitment to Sustainable Cocoa
2. Australian Packaging Covenant
3. Arnott's Biscuits Palm Oil Statement 2020

Political: Operations within the biscuit manufacturers must follow federal and state
legislation. Since July 2018, legalisation brought in the mandatory labelling of new Country
of Origin Labelling. This labelling system allows operators to claim if their products are
Australia made by displaying a kangaroo symbol with text and a bar chart of locally sourced
ingredients (GOV,2018).
Major marketing report, ass1 Saskia Platzer, Mark101

Ong, J. (2014). Campbell Arnott’s wins top award for eco packaging. Waste Management
and Environment, 25(8), 22.
https://search-informit-org.ezproxy.uow.edu.au/doi/10.3316/ielapa.568986226946261
(Original work published September 2014)

GOV. “IFN 03-18 – Country of Origin Labelling from 1 July 2018 - Department of Agriculture.”
Agriculture.gov.au, 2018, www.agriculture.gov.au/import/goods/food/notices/ifn03-18.

Richardson, Arna. “Biscuit Manufacturing in Australia.” Login.ezproxy.uow.edu.au, 2021,

my-ibisworld-com.ezproxy.uow.edu.au/download/au/en/industry/107/4/0/pdf. Accessed 25
Mar. 2021.

Armstrong, G (Gary M., Denize., Volkov., Adam., Kotler. & Ang. 2021, Principles of Marketing
8th edition., Pearson Australia, Melbourne, VIC.

ABS. “Loneliness Most Common Stressor during COVID-19 | Australian Bureau of

Statistics.” Www.abs.gov.au, 18 May 2020,
www.abs.gov.au/articles/loneliness-most-common-stressor-during-covid-19.
TechSci Research. “Australia Biscuit Market Size, Share & Forecast | TechSci Research.”
Techsciresearch.com, 2020,
www.techsciresearch.com/report/australia-biscuit-market/1704.html#:~:text=Australia%20bis
cuit%20market%20is%20projected. Accessed 25 Mar. 2021.

Skelly, Jack. “Biscuits: A Snack for All Occasions.” Www.bakingbusiness.com, 2015,

www.bakingbusiness.com/articles/35448-biscuits-a-snack-for-all-occasions.

Kneebone, Sarah. “FMCG Trends: The Snacking Revolution.” Playmr.com.au, 2018,

www.playmr.com.au/blog/fmcg-trends-the-snacking-revolution.

Flanders Investment and Trade. “OVERVIEW 2019 FOOD & BEVERAGE INDUSTRY
MARKET IN AUSTRALIA”. Flandersinvestmentandtrade.com, 2019,
https://www.flandersinvestmentandtrade.com/export/sites/trade/files/market_studies/Australi
a-Food%20and%20Beverage%20Industry%202019.pdf