Sunday, July 10, 2016

What's Going On In The Australian Biscuit Market, Part One: Australians Are No Longer Taking The Biscuit!

What's Going On In The Australian Biscuit Market, Part One: Australians Are No Longer Taking The Biscuit! biscuits, Australia, scan data, market growth, Arnotts
The Australian biscuit market is in trouble. 

It - the Australian “bickie” - used to be the default snack for generations of Australia. It was the answer to the question of what to dunk into your cup of tea.  Or coffee.

So proud were Australians of their biscuits that any American visitor daring to refer to them as “cookies” would find themselves at the receiving end of a stern correction: “We don’t call ‘em cookies here you drongo! They’re called bickies mate!”

Those days are gone.  Nobody says "drongos" anymore.

Nor do Australians eat biscuits anymore.  At least not in the numbers they once did.  There are simply so many more snacking options for them to eat. Consumers are switching to other snacking options, in other aisles of the supermarket.  Healthier options.  Or more decadent options. 

There’s such a wide range of biscuits on offer in your average Australian supermarket that making sweeping generalisations is rather futile. Some biscuit categories are growing and some are not.  But as a general rule, those biscuits whose major function is to be dunked in a cup of tea or coffee are struggling. 

To illustrate this point, let’s see what the folk at Roy Morgan Research have to say on the matter:

Oh dear.

Or take a look at this graph depicting the volume growth of biscuits through major supermarkets since 2010, using data lifted – as is the case with most of my graphs – from RetailWorld’s Annual Report

Well that, I’m sure we can agree, is one hell of a depressing looking graph.  Despite my choice of a sunny yellow backdrop.

Ever since the “golden days” of 2010 and 2011, the volume growth of biscuits has been negative for three out of four years.  And in the single year it was positive, it just scrapped through with 0.4% volume growth.

It’s hard not to be pessimistic, since the key take away from a graph such as this is that Australians have fallen out of love with the biscuit.  

But why?

Here are some thoughts: biscuits are used for a number of functions.  For older generations they are a treat which they can dunk in their tea (and are consequently at risk from the demographic challenges also facing the world of tea).  For younger generations working in their offices, they are a snack.  Something to get them through the afternoon. 

Sadly for biscuits, the number of snacking options is expanding all the time and many of these are perceived as being at least reasonably healthy. As has been noted elsewhere, by other people, Australian appetites are diverging in two different directions. Some Australians are attempting to eat healthier, whether they be image-conscious millennials or Baby Boomers whose doctors have just explained that they aren’t youngsters anymore. Whilst others embracing the latest in freak-shakes and Nutella-balls. Two trends that often reside in the same person. 

It’s diet or decadence.  And if I’m going to break my diet, you’ve got to make it worth it for me.  Sadly for Arnott’s their Assorted Creams range no longer really cuts it.

On the other hand, the biscuits we are eating are getting fancier. 

There’s never been a more exciting time to be an Australian biscuit connoisseur.  As can be seen if we look at the value growth graph!

Not a phenomenal amount of growth, but hey, it looks as though biscuits may be making a miraculous comeback, on the back of fancier biscuits!  All those Zumbo-concocted Tim Tams! And Arnott’s Twisted Faves!  And fancy European brands of wafers, like Loacker and Kras!
So let’s have a look at the Australian biscuit consumer. 

To begin with: how many are there?

Well, according to the ABS Australian Health Survey (sadly from 2011-2012, there ought to be an update in a year or so) on an average day, 24% of Australians will eat a sweetbiscuit, and 17.3% of Australians will eat a savoury biscuit.  Or to put it another way, 5.2million Australians will eat a sweet biscuit, and 3.7million will eat a savoury biscuit.

(Now “sweet biscuit” in this case - and in the case of the Roy Morgan figures also - includes plain biscuits, cream biscuits, shortbread, chocolate coated biscuits and choc chip cookies.  “Savoury biscuits” covers everything from Arnott’s Shapes to water crackers to rice crackers and rice cakes.)

These biscuit fans are not evenly spread across Australia’s demographic landscape.  They can be found in particularly large concentrations amongst both kids and the elderly.

And this is the case regardless of whether we are talking about sweet or savoury biscuits, as my next two posts will reveal!