The VDB Association of Baking Technology Austria commissioned market researchers GfK AT to conduct a survey on how the COVID-19 pandemic is changing the baked goods market. It presented the first results at the beginning of March.
It should be said at the outset that GfK evaluates household shopping diaries (or its market observations and that the Austrian retail trade and bakery market have national characteristics that cannot necessarily be transferred to other countries. For example, Austria has a long tradition of supplying fresh baked goods to food retailers, which is increasingly being replaced by industrial and retailer-owned production structures.
COVID-19 and especially the restaurant lockdown have left a clear mark on in-home consumption. This also applies to baked goods consumption. Overall, baked goods consumed at home increased by 4.4% to 69kg per household. In total, an Austrian household spent EUR339 on baked goods in 2020. The strongest volume increases took place during the first hard shutdown. By the second shutdown at the end of the year, panic or frustration had already faded somewhat.
Bread and pastries are part of the daily diet in almost all households, regardless of whether the hot meals are consumed inside or outside. Meanwhile, the fact that the lockdowns triggered increased cooking is reflected in a comparison of sales. Sales of vegetables, pasta, milk, etc. increased significantly more than sales of baked goods over the entire year. The need to stay at home also gave the market for baking and preserving ingredients a significant boost.
Who is affected and
to what extent?
Crisis Types is what market researchers call the classification of the population according to perceived uncertainty caused by the pandemic. In a survey recurring over 12 months until September 2020, consumers were asked how they assess their financial situation and the security of their jobs or income.
According to the answers, the market researchers divided consumers into:
a) Those who are directly affected because they are unemployed or are very afraid of becoming unemployed
b) Worried people who have a secure job but a tight
financial situation, or pensioners in such a situation
c) Resistant people, who have both a secure job and
secure finances, or are retirees with secure finances.
The proportions also differ significantly within the EU, shown in % of consumers surveyed
Hypermarkets on the rise
In 2020, Austrian household spending on in-home consumption of fast-moving consumer goods (food, beverages, cleaning agents, cosmetics, soaps, paper goods, over-the-counter medicines, disposable items) increased by around 12%. In return, the number of shopping trips for this category fell from 231 in the year to 225. In the group of stationary shopping locations, hypermarkets were the clear winners. Their share of shopping trips increased from 16.8% to 17.1% in 2020 compared to the previous year. Their sales increased by 14.5%, while supermarkets ‘only’ turned over 12% more with the same share of shopping trips.
9% buy baked goods online
Online retail in the Corona year 2020 also shows growth in FMCGs in Austria. Shopper reach (percentage of consumers who purchased FMCGs online at least once within the year) increased by 3.8% from 2019 to 2020 to now 31.5%. Spending per shopping trip increased from EUR43.2 to EUR45.3. Nevertheless, the share of online sales in the overall market remains low at 2%, with just under 9% of consumers surveyed buying baked goods online in 2020, generally as part of larger purchases.
Winners and losers
More shoppers, more frequent purchases, and more quantity per purchase – this unbeatable formula only fulfilled the dreams of toast makers among bread suppliers in 2020, and when combined, resulted in a year-on-year increase in toast and sandwich consumption per household of more than 10%. White bread gained shoppers and purchase frequency, but stagnated in the amount purchased per shopping occasion. Alternatively, brown bread lost shoppers and purchase frequency, but gained in quantity per purchase. Ultimately, this meant a plus in consumption per household for both types of bread.
Specialty breads lost shoppers and the number of purchases, so, despite a slight increase in the quantity purchased per trip, the end result was a minus per household. Wholemeal bread fared even worse, attracting more shoppers with specialties such as wholemeal baguettes, but the number of purchases and the quantity per purchase ensured that the quantity per household fell by more than 5% compared to 2019.
Looking at the development of small baked goods, it is noticeable that almost all varieties increased because either more buyers made more purchases or bought more each time. Only multigrain bread rolls, pretzel-dough products, Kornspitz, pumpkin seed bread rolls and ‘other brown baked goods’ sat on the loser’s bench. Among the winners, the hamburger bun stands out with significantly more buyer households, although this is put into perspective by a rather small total quantity. However, Semmel, which is the main product among Austria’s bread rolls, did not gain any new customers, but it did gain in volume per purchase and thus also in volume per household.
The year also went well for pastries. Rouladen, teacakes, (seasonal) Stollen, striezel and brioche, muffin and small cakes, strudel, and even cakes performed well. The typical out-of-home baked goods such as doughnuts, donuts, croissants, etc. naturally suffered from a decline in purchasing frequency due to the lockdown, and also to a small extent from the quantities purchased in each case.
Falling sales of unpackaged fresh produce
Across all three product ranges – bread, bread rolls and pastries – it became apparent that the supply of fresh, unpackaged goods was unable to benefit from increases in the product range. Their share of sales fell from 65.2% to 63.2% for bread, from 89.8% to 88.8% for bread rolls and from 34.7% to 33.8% for pastries. In contrast, demand for frozen bakery products in Austria increased by 20.4% in 2020, with the total market at a volume of 2,000 tons per year.
The question remains as to who collected the increases. It certainly was not the artisan bakers. As in previous years, their market share fell in terms of both volume and sales. Both have migrated to hypermarkets in recent years. Supermarkets and discounters, however, have largely been able to stabilize their market shares.
A small ray of hope: the 2020 COVID year put the brakes on the longstanding decline in shoppers at artisan bakeries. Around 35.6% of all households purchased from artisan bakeries overall in 2020, compared with over 55% in 2010. Looking at the group of bakery customers by age, it is noticeable that 66% are older than 50 and just 11% are younger than 34. Millennials have yet to be won over by artisans
