What's Going On In The Australian Biscuits Market? Part Eight: "Flavoured Snacks" Back In Good Shape!

“Flavoured Snacks.”  Probably not the illuminative category description in the world – I mean, aren’t all snacks flavoured? – but it’s what Retail World have decided to call those cracker-like biscuits with “flavour you can see.”  Flavours like BBQ, Chicken, Pizza, the generic Savoury.  And increasingly flavours like Sweet Chilli & Sour Cream, Honey BBQ Chicken, BBQ Ribs Blast, Hot Dog, Peri Peri Chicken Slam and Caramelised Onion & Cheddar (which just goes to show that there may be no category on the supermarket shelves that has not become foodie-fied).

Other people just call them “Savoury Crackers.”

Probably the easiest way to describe the category to an Australian would just be to say, “like Arnott’s Shapes.”

No surprise then what the dominant brand is.

“Flavoured snacks” aren’t only Arnott’s Shapes however.  There are challengers of sorts, or at least wannabe challenges.  They are just far, far behind.  According to Retail World Annual Report, Arnott’s were on 84.9% value market share in 2015.  No other brand even came close to breaking double figures.  

Fantastic Delite is even heading backwards, hence their pinkish hue in our graph, where green means making market share gains and red means market share losses.

There is Fantastic Delites for the more sophisticated snacker.  And Ritz Snackz for the only slightly more sophisticated snacker.  There used to be Ritz In A Biskit, but they were discontinued in 2014 (unfairly I believe, for whilst In A Biskit’s market share was certainly trending downward, it was quite a gradual trend and they were still holding a quite respectable 7% value market share in 2013, which means that their absence left a significant number of fans feeling distraught)

What's Going On In The Australian Biscuit Market? Part Seven: Is The Crackers and Crispbread Market Crumbling?

Crackers and Crispbread; it’s what you eat when you kind of want a sandwich, but you’re only hungry enough for a snack.  It’s what you take on a picnic.  Or at a BBQ.  Or for nibbles at any of an array of social occasions.

It’s a category filled with variety, stretching from the almost-a-sandwich offerings of Cruskits and Vita Weat, to the bite size cracker market increasingly dominated by Arnott’s Jatz.  Or sometimes Savoy in Victoria. 

Even within the “cracker” side of the market, the Australian cracker consumer falls into one of two camps: the Jatz/Savoy consumer, who often eats the product straight out of the box although that’s almost certainly not their intended use, or perhaps with a sliver of supermarket brand, Coon or Bega cheese. 

And then there are those who want something a little more sophisticated.  Perhaps with granules of cracked pepper scattered throughout.  These consumers usually eat their crackers with a camembert of brie.

It's clearly a complicated category.

But regardless of what Australians choose to put on their cracker or crispbread, it’s sad to say that Australians do not seem to be engaging in this practice anymore.  Volume growth – according to the scan data quoted in Retail World - has been up and down, but mostly positive, so at least there’s that.

But value growth – following a Vita-Weat-led boom in crispbread sales around 2012 – has been negative for three consecutive years, each year experiencing a decline that is slightly deeper than the year before.

And despite the hipster foodie revolution allegedly turning Australians into the kinds of food snobs that prefer a camembert to a Coon, Jatz is by some distance the largest brand of cracker in Australia with 24% value market share, according to Retail World.

What's Going On In The Australian Biscuits Market? Part Six: Sweet Biscuits Growth Prospects Not So Sweet

“Sweet biscuits”- and in this case we are using the Retail World definition of “sweet biscuits” which includes plain biscuits, cream biscuits, and cookies, but not chocolate coated biscuits which are a whole other thing - make up just over a third of the total biscuit market in Australia.  Sweet biscuits are also by some distance the largest biscuit category in Australia, big enough that their performance is critical to the performance of the biscuit aisle overall.

And the performance of the “sweet biscuits” category in recent years has largely been lacklustre.  Even if we assume that the sudden dip in 2013 was an aberration at least partially due to the Zumbo-led Tim Tam revival being experienced over in the chocolate coated biscuit category, the one-and-a-bit percent value growth over the last two years is hardly something to get excited about.

This lacklustre performance of “sweet biscuits” is even more concerning when you consider that since 2013 it has included a new brand; a brand so different from what you usually think of when you say “sweet biscuits” that some might argue it should not be included at all.  Some might argue that it shouldn’t even be stocked in the biscuit aisle, but the breakfast aisle. I myself am rather sympathetic to these arguments. 

I am of course referring to Belvita, the “sweet biscuit” so big that it is marketed as a breakfast replacement.  Launched into the Australian “sweet biscuit” market with quite a bit of hype, it grabbed 3.2% value market share that year, and has gradually expanded its popularity from there.  Very gradually.  In 2015 Belvita’s market share reached 4%.  Belvita’s momentum might be slow, but it’s still one of the more dynamic performers of the “sweet biscuits” category.

The only brand more dynamic is Oreo.  Although Oreo's performance over the last five years has been inconsistent; sometimes up, sometimes down, but always hovering somewhere between 5-8% market share, which actually makes them the most popular sweet biscuit brand in Australia.  But 2015 was one of the good years.  And that's before the launch of Oreo Thins, which didn't happen until early 2016.  A good time then for Mondelez - who own Oreo - to launch an Oreo Cadbury Dairy Milk!

Yes, 2015 was certainly a good year for Oreo.

A bad year however for Arnott's Tiny Teddy, a brand that only until last year was the largest brand in sweet biscuits; it's now No.2.  Are the parents of Australia looking for a healthier snack for their children?

What's particularly impressive about Oreo's success - although looking at the longer term of five years their market share has barely budged - is that they have achieved this despite having the highest unit price on the market.

Therefore, much of the already slow growth being experienced by the “sweet biscuits” category is coming from outside of the category’s traditional market.  A look at which demographics particularlyenjoy a “sweet biscuit” – as we did a few blog posts ago - goes a long way in revealing why; “sweet biscuits” are particularly favoured by elderly Australians (and particularly elderly ladies) who like to partake of an Arnott’s Kingston (my personal favourite “sweet biscuit”) whilst having a cupof tea or coffee.

And this is the problem that “sweet biscuits” face.  As we mentioned in a previous post, the Australian tea market is in a seemingly irreversible decline, largely due to the fact that the consumption of tea is particularly skewed towards those over the age of 70, an age group that is - to put it in as sensitive a manner as possible - coming to the end of their lifecycle. 

The prospects for “sweet biscuits” are not quite as dire.  Whilst consumption of tea is very generation-specific, the consumption of coffee is not; and coffee consumers still need something to dunk in their coffee.  Still the idea of a relaxing coffee/biscuit combination is increasingly seeming quaint, particularly if you could have something a bit fancier instead: a brownie perhaps, or a friand.  Or a chocolate coated biscuit.

The result is that “sweet biscuits” consumption is increasingly skewed towards the sweet old lady demographic.

Little surprise therefore that by far the largest player in the “sweet biscuits” category is a company whose brands – for the most part – go back even further than their key demographic. 

I am referring of course to Arnott’s; a company with 58.5% value market share of the “sweet biscuits” market in 2015.  A company whose Facebook page currently features a cover photo of an old fashioned biscuit tin.  Their nostalgia-hungry fans – no doubt – would approve.

(Although they certainly don’t approve of the new Shapes flavour! But that’s a whole different story)

Nostalgic photos of biscuit tins are fine for reinforcing Arnott’s brand image as the great Australian biscuit company, but it’s not the sort of thing that lends itself to category growth.  Particularly in the face of the rather more dynamic chocolate coated biscuit category which appears to be stealing consumers from the neighbouring “sweet biscuits” portion of the biscuits aisle. 

Chocolate coatedbiscuits have grown because of the innovative flavours launched by Tim Tam, who are of course also owned by Arnott’s. Arnott’s have paid a lot of attention to their chocolate coated biscuits brands, and relatively little attention to their “sweet biscuits” brands, which have remained virtually unchanged for decades.

Little surprise then that Coles has gone off searching around the world for a brand to bring a little pizzazz to the biscuit aisle.  Although, as with most things Coles does, that simply means importing a popular British brand: Maryland, otherwise known as “Britain’s Favourite Cookie,” - who appear to have taken a kind of Cadbury’s Marvellous Creations take on the cookie: “Mix’ems with Fruit Jellies and Candy Shells”! – and Fox’s. 

Woolworths’ preferred pizzazzing strategy is to launch a range of cookies under their gourmet Woolworths’ Gold private label brand.

Private labels have a relatively strong presence in “sweet biscuits”, hovering just over 10%.  Whilst not particularly high in the grand scheme of things, that’s twice as high as is the case in chocolate coated biscuits, where Tim Tam’s range of fancy biscuits has kept them a step or two ahead of competition.

There is more to the “sweet biscuits” market than just the continued dominance of Arnott’s and the rise of Belvita however.  Mondelez’ other brand – Oreo – appears to have found a stable following in Australia, hovering just over 5%, but the final relatively major player – Green’s, the owner of Paradise and Greens cookies since 2014, before which Paradise was owned by Goodman Fielder – appears to have lost its way, losing 4.4% market share over the last four years.

Specializing in cookies, Greens appears to have lost the cookie consumer to the moister offerings of store baked cookies, their market share almost halving from 11.3% in 2011 down to 6.9% in 2015. It is rather difficult to compete with freshly baked cookies after all.

Which is yet another threat that Arnott’s needs to deal with.  It’s not just the demographic difficulties, it’s the temptation of freshly baked cookies outside of the biscuit aisle.  They’ve already succeeded in revitalizing the chocolate coated biscuit category; what can they do with “sweet biscuits”?

Following the success of Tim Tam’s efforts, Arnott’s have finally come up with a two-pronged strategy to revitalise the “sweet biscuits” category.  The first, and less exciting of the two, is to reinvent the packaging from white to a more majestic looking metallic red.  The second is their Twisted Faves range, another example of what I like to call the Marvellous Creationism of snack foods.  There is a Salted Caramel Monte Carlo.  A Jaffa Choc Orange Delta Cream.  A Strawberries & Cream Shortbread Cream.  A Choc Chip Scotch Finger.  

It’s not quite Espresso Martini flavour, but it’s something.

Arnott’s claimed that all of this was just to celebrate their 150^th Anniversary. But it’s probably also to inject some excitement into a quite frankly stale category.  It certainly needs it.

What's Going On In The Australian Biscuit Market? Part Five: Tim Tam Slams The Chocolate Coated Biscuit Market

The Australian chocolate coated biscuit market is BACK!  More or less.

Things had been looking shaking there for a couple of years, dipping into quite worrying levels of negative value growth in 2012, at which time the impulse purchase nature of the category encouraged retailers to discount them heavily.  Which, it has to be said, was not the most imaginative solution in the world.  Which was a pity, because if there was one thing that the chocolate coated biscuits market needed, it was imagination. And they were about to get it!

Because something big had to change.  Or to be more specific, something big had to change for the one brand big enough to single handedly change the course of the entire category. 

And I think we all know which brand that was.

If you ask the average Australian on the street to name a brand of chocolate coated biscuit, most of the time (I’d wager as often as 99%) they will say Arnott’s Tim Tams. Arnott’s Tim Tams are pretty much what chocolate biscuits mean to the majority of Australians.  You don’t see Australians teach foreigners the intricacies of how to do a Mint Slice Slam do you?  So it may be surprising to hear that for all of its fame, Arnott’s Tim Tams actually make up less than half of the chocolate biscuit market in Australia.  Although it does come quite close.  And is getting closer.  But we’ll discuss that in more detail later.

The fortunes of both Tim Tam and consequently the overall chocolate biscuit market began to change in 2013 when the brand started to focus on flavours other than the classic Tim Tam Original, first by launching Tim Tam Treat Packs, small packs of Tim Tam’s in a wider range of flavours than previously thought possible.

Anyone who thought that this was as far as they could go was in for a rude shock.  In 2014, Tim Tam brought Adriano Zumbo – almost certainly Australia’s most famous pastry chef – to invent three new flavours.

These flavours – Salted Caramel, Choc Brownie and Raspberry White Choc – were a significant departure from the previous offerings, such as Original, Dark Chocolate, Caramel, White Chocolate.  The old flavours were very well and good, but nothing you could really call “on trend”.  Nothing that captured the zeitgeist.  But “salted caramel”!  It might seem a little passé now, but in 2014 that was some true “finger on the pulse” work.  They stood out on the shelf, and not only because Raspberry White Choc came in a bright pink pack.

It’s only been two and a half years since Adriano Zumbo introduced the Salted Caramel Tim Tam, but it sometimes feels like there have been more flavours invented in those two and a half years than in the entire history of, not just Tim Tams, but the entire chocolate coated biscuit industry!

Here’s a quick rundown of some of the various versions of Tim Tams that have appeared over the last couple of years: Espresso Martini, Pina Colada, Strawberry Champagne, Toffee Apple, Red Velvet, Three Beans, Chocolate Coconut and the rest of the Adriano Zumbo range.  Not to mention the whole Chocolicious range which is becoming increasingly fancy itself with such flavours as Velvet Mudslide.    

So many flavours in fact that they’ve had to divide their new releases between Woolworths and Coles; Woolworths have received the “mocktails” range, whilst Coles have been delivered Choc Banana and Choc Pineapple.

Not all of these variations have been successes, but they have certainly helped keep the Tim Tam brand at the front of every chocolate coated biscuit lovers mind. 

Whether this strategy has been a success has been a matter of much debate amongst commentators within the chocolate coated biscuit industry; with rumours of late night meetings between the Australian office and their American masters, apologising that maybe this time – with the Pina Colada or Strawberry Champagne range – they went too far.

And that seems to be the common consensus opinion: Salted Caramel may have been an inspired idea, but now things are just getting ridiculous.

Still, you can’t say that the experiment hasn’t been at least a partial success. Value growth of chocolate coated biscuits returned to positive territory, even whilst volume growth remained negative and seemingly trending downwards.  More revenue for less chocolate coated biscuits; that must count as some sort of success.

The reason volume growth has gone down is largely because those fancy new flavours of Tim Tam come in smaller pack sizes, of 165-175g compared to 200g for the Tim Tam original.

Meanwhile Tim Tams have also grabbed a larger slice of the Australian chocolate coated biscuit market.  In 2015, Tim Tams made up 45.6% of the market (according to the Retail World Annual Report), just less than half.  Strong gains that have continued into 2015.

The Tim Tam revolution is not the only thing to have happened in the Australian chocolate coated biscuit market over the last half decade or so.  There has also been the rise, and then fall of the Cadbury biscuits brand. 

Cadbury arrived on the chocolate coated biscuit block in 2013, and made some rather impressive early gains, debuting at 7.6% market share. There was clearly a high level of excitement about the possibility of a Cadbury biscuit – a chocolate biscuit made by people who know about chocolate, with a range of popular chocolate brand names to wack on them – but it didn’t really work out.  Two years later and Cadbury’s now only hold 3.5% value market share in 2015.

Then there has been the fall of private labels.  Don’t fall for the whole “private labels are taking over the world” line, because as Tim Tam has convinced Australian consumers to expect so much more from a chocolate coated biscuit, private label brands have fallen back.  Private label have declined each year over the last half decade, from 13.9% in 2010 down to 7% in 2015. It just goes to show that it is a trend that can be reversed if you just make something a little bit exciting.

Not to mention possibly surprisingly cheap.  Because despite all this text-book premiumisation and gourmet flavours to excite the "foodies", Tim Tam remains one of the least expensive chocolate coated biscuits on the market, largely due to being such a big drawcard for supermarkets that it's almost permanently on special.

No wonder it's slamming the competition.

It hasn’t been all good news for Arnott’s though, since virtually every other non-Tim Tam Arnott’s brand has also suffered. Simply because why would you eat an Arnott’s Royal when you could have a Tim Tam? 

Arnott’s Mint Slice has been the exception to the rule.  Slightly.  Although even they have fallen backwards in 2015.

Which means that, as a result, Arnott's corporate market share has actually gone backwards, despite the success of Tim Tam.  Although they are clearly still far far ahead.

So Arnott’s Tim Tam have revolutionised the Australian chocolate coated biscuit market and returned the category to reasonable levels of positive growth.  Categories don’t operate in a vacuum though, and most of this growth has come from the category that is chocolate coated biscuits most obvious and closest substitute: sweet biscuits, a category whose performance over the last few years could be described as shaky at best.  And this is something that Arnott’s probably isn’t too happy about.

What's Going On In The Australian Biscuit Market? Part Four: Which Biscuits Are Australians Eating?

biscuits, Australia, sweet biscuits, chocolate biscuits, crackers, crispbread, rice cakes, rice crackers

So in the last couple of posts we have established the following

(a)   that Australians are no longer eating biscuits in the quantities that they used to

(b)   that the biscuits we are eating are slightly “fancier”, leading to some value growth despite rather consistent volume decline

(c)    that the most passionate devotees of biscuits are kids and the elderly

(d)   that the number of people who eat “sweet biscuits” is greater than the number that eat “savoury biscuits”

But “sweet biscuits” and “savoury biscuits” are still rather vague categories. So let’s have a look in little more detail; at which types of biscuits the Australian consumer bought in 2015 according to the Retail World Annual Report.  Here we have a graph in the form of a planogram, or as I like to call it, a planograph.

“Sweet Biscuits” in this case include cream biscuits, plain biscuits and cookies, but not chocolate coated biscuits.

 What’s interesting about these proportions is that they have barely changed over the last five years. 

Crackers & Crispbreads have lost a square, as have “Flavoured Snacks” (ie Arnott’s Shapes and other similar snacking related brands).

Rice crackers and premium/entertaining (think of Waterthins Twists for example) have gained one each. 

And about half a percentage point market share appears to have drifted from Sweet Biscuits straight to Chocolate Coated Biscuits, as consumers go for something a little more decadent.

But that is about it.

Despite the hustle and bustle of the last couple of years – the Zumbo-concocted Tim Tam revolution, the rise of Belvita, the fall of Ritz In A Biskit – the end result is that Australians are largely eating much the same biscuits as they were half a decade ago.,

Quite a lot has occurred within each sub-category however, so let’s have a look at them in closer detail, starting with Chocolate Coated Biscuits.