History of the bread industry in Australia

The making and selling of bread is one of the oldest food manufacturing industries. In medieval times, bakers guilds were already in existence. Because bread is a staple food, the making and selling of bread is intricately interlinked with social, economic and consumer issues. The history of the bread industry in Australia illustrates how these issues have impacted on the way that bread is made and sold in Australia today.

Bread in Australia over the decades

Early 1800

• Grain was ground at public mills. The flour was used for baking bread at public bake houses. Bread rations were issued three times a week.
• Damper was made by those in the bush.

Early 1900

• Bread was produced, distributed and sold by small, independent family-owned bakeries.
• Bread (mostly white) was unwrapped and home delivered by horse-drawn cart to local households.

1950s

• Medium-sized family bakeries and some larger bakeries sold mainly white, high-top loaves (wholemeal and brown bread represented only about 5% of sales).
• Bread was sold over the counter or through grocery stores.
• Motorised vans were being used for home deliveries.
• Sliced bread was introduced.

1956-1960s

• Milling and baking industries merged to form four major bakery companies (each allied to a flour milling company).
• Pre-sliced, packaged white bread was popular (30% of sales).
• Supermarkets emerged and sold bread.
• A wider choice of bread, such as rye and kibbled bread, became available.

1970s

• Aggregation of bakeries continued.
• Hot bread shops opened supplying a variety of fresh, crusty bread throughout the day, including fancy breads.
• Breads such as flatbreads and mixed grain loaves became available.
• The bread industry started using marketing and advertising strategies to compete for market share.

1980s

• Smaller food companies started to merge to form large food companies.
• In-store (supermarket) bakeries opened providing a larger variety of breads.

1990s

• Independent bakeries and franchises (e.g. Bakers Delight and Brumby's) entered the bread market selling a range of breads such as traditional breads, Vienna, wholemeal and grain (e.g. oat bran, linseed and muesli) breads. Brumby's also sold traditional bakery items such as custard tarts, lamingtons, cakes, pies and drinks.
• A wide variety of white, mixed-grain, rye, wholemeal, Continental, Mediterranean and Middle Eastern breads became widely available.
• Emergence of breads developed and marketed for their positive health benefits, e.g. Wonder White®, Burgen® Soy Lin®.

Today (2001)

• The majority of bread (~60%) is sold through supermarkets and the remainder from hot bread shops, corner stores, food service outlets (e.g. restaurants, takeaways, hospitals, hotels etc.) and franchises (Bakers Delight and Brumby's).
• Goodman Fielder and George Weston Foods share around 56% of the bread market.

Factors which explain changes in bread marketing over the decades

i. Consumer demand

Taste
After the Second World War, migrants, mainly from continental Europe, arrived with different eating habits and a preference for different types of bread. They created a demand for bread other than the limited range of mainly white bread available at that time. Australian bakers, unaccustomed to such consumer demand, did not respond. Consequently, migrants established their own bakeries producing breads such as rye and kibbled bread (e.g. Vogels). Since then the different cultures living in Australia have created a bread supply which caters for many tastes and cuisines.

Fresh, crusty, bread sold by hot bread shops since the 1970s provided an alternative to the bread sold in supermarkets which some consumers considered bland, boring and not always fresh.

Socio-economic factors
With more women entering the paid workforce and increasing motor car ownership, it became more convenient to purchase bread from supermarkets. To enhance shelf life and differentiate one product from another, bread sold in supermarkets had to be packaged. Bakeries started selling bread to supermarkets rather than directly to consumers. Supermarkets have a big influence on the success of new products by determining their availability, location, shelf position, point-of-sale advertising, pricing and stock weight.

As the standard of living increased, bread consumption declined as consumers had more money to spend on luxury items.

The availability of a larger variety of foods, especially snack foods, had a negative impact on bread consumption.

Health and Nutrition
In the 1960s, the misconception that carbohydrates were fattening decreased bread consumption, particularly amongst those concerned about their body weight.

Since the 1980s, increasing scientific evidence supports a link between diet and disease. Wholegrain breads, which are higher in fibre, are becoming more mainstream as the link between bowel cancer and dietary fibre becomes accepted.

With access to more information on the relationship between diet and health, consumers are recognising the role of healthy eating in achieving optimal health. They are assuming greater personal responsibility for the health of their family by taking more care in choosing nutritious foods and are interested in receiving information about nutrition. The bread industry has responded to consumer interest in nutrition by developing breads in the functional foods category. A food is defined as a functional food when it offers health benefits other than the provision of simple nutrients. Promoting the positive health benefits of resistant starch and soy, found in breads such as Wonder White( and Burgen( Soy Lin(, is an important strategy for bread marketing.

In the 1990s, the food supply is seen to be less natural and more processed. This may partly explain the success of independent bakers such as Bakers Delight and Brumby's that produce breads perceived to be more natural.

Attitudes to bread
In the 1950s, bread was perceived as a staple food, not a luxury item. Since bread was not perceived as a health food, but rather as a commodity, it was difficult to increase consumption. Today, attitudes towards bread are changing with more consumers regarding bread as a healthy food.

ii. Technological changes
After WWII, there were significant technological changes, especially associated with automation. Mechanisation led to the establishment of large fully automated and quality controlled plant bakeries. Small bakeries could not compete with the efficiency of these large plant bakeries and were absorbed by them. Production time was further reduced with the introduction of the rapid dough process, a technique developed by the Bread Research Institute of Australia which reduces the time required for dough development by the addition of oxidising agents such as vitamin C (ascorbic acid).

Processing methods and packaging allowed bread to stay fresh for several days, increasing its shelf life.

Pre-mixed flours, automated equipment and frozen doughs allowed hot bread shop owners, who were initially not bakers, to specialise and compete with the larger manufacturers. It also made it possible to provide a continuous supply of fresh bread.

iii. Market forces
After WWII, export markets for flour declined as many third world countries built their own flour mills. Exports of flour declined from a peak of 884 898 tonnes in 1952-53 to 379 200 tonnes in 1968-69. Flour mills merged and acquired their own bakeries, replacing traditional family-owned businesses, to ensure a regular domestic market for their flour.

In the late 1950s, George Weston from Canada began acquiring bakeries in Australia. This company was mainly interested in modern bakeries and introduced many innovations, such as sliced and packaged bread, which was taken up by the Australian bread industry.

Regulations controlling the production, delivery and price of bread helped to minimise competition between bakers prior to the 1950s. For example, until 1991, Victorian regulations forbade bread to be distributed more than 48 km from a bakery (to protect country bakers). However, these regulations were no longer appropriate with the development of large automated plant bakeries. Big plants, which could produce up to 8 000 loaves an hour, could only run for five hours a day. To ensure delivery of bread early in the morning, production had to take place when penalty payment for employment was highest. Price regulations meant that the major plant bakeries maintained market share by reducing production costs and acquiring other bakeries to reduce competition. This lead to uniformity in the product since it was more cost efficient to produce a limited variety of square-shaped bread.

Market share of large plant bakeries peaked in 1975 and then started declining with the deregulation of baking hours which allowed hot bread shops to bake and sell fresh bread 6-7 days a week.

The bread industry is highly competitive since bread is eaten in almost all households. Bread manufacturers try to increase sales by persuading consumers to change brands or to eat even more bread. Larger bread manufacturers have the research and development (R&D) resources to develop innovative new products whereas smaller bakers can provide a greater variety of products.