Retail Bakery Market in Switzerland

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  • Assumption sounds reasonable, but I found no numbers about it.
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  • Thank you,

    But did you came up to any figures about the portion of bread and bakery products produced by retail bakeris vs Coop and Migros?
    I suppose that it might be 40 and 60 % accordingly or even bigger weigh of two groceries.
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  • Retailers such as Coop and Migros were not included in the survey of the SBKV. These numbers are only about retail bakeries.
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  • Bread sold by Coop and Migros on a pie chart (slide 5) belong to wich category? Or they dont refer to retail?
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Retail Bakery Market in Switzerland

  1. 1. Retail Bakery Chains in SwitzerlandChristian Busin, 25.05.2012
  2. 2. Agenda► Introduction► The Swiss bakery market► Market Composition and Main Players► Competitors► Substitutes► Potential Entrants► Suppliers► The role of corporate social responsibility► Concluding remarks2 Christian Busin, 25.05.2012
  3. 3. Introduction► Bread, pastries, chocolates…► 2010: 49.3 kg of bread per capita► More then 200 different kind of bread at sale► Retail bakery vs. wholesale bakery► Characteristics of the Swiss food market (Rudolph and Weber 2011): ► High value of quality ► High loyalty, importance of image3 Christian Busin, 25.05.2012
  4. 4. The Swiss Bakery Market► Market volume 2011: 2.2 billion CHF► Sales influenced by the World economic crisis► Market in a maturity state Schweizerischer Bäckerei- und Konditoreiverband SBKV 20124 Christian Busin, 25.05.2012 Schweizerbrot 2012
  5. 5. The Swiss Bakery Market► A picture of the Swiss retail bakery market► Main cost drivers (as share of total turnover) ► Employees 44-46% ► Ingredients 30% SBKV 20125 Christian Busin, 25.05.2012
  6. 6. The Swiss Bakery Market► Fragmented Market (Porter) ► Low overall entry barriers ► High transportation costs ► Diseconomies of scale► Entry barriers for foreign competitors6 Christian Busin, 25.05.2012
  7. 7. Market Composition and Main Player Own figure7 Christian Busin, 25.05.2012
  8. 8. Main player: Goupe Aimé Pouly► Headquartered in Geneva► Several independent companies ► Pouly Tradition SA ► Boulangerie Polli► Turnover of about 85 million CHF in 2007► Founder: Aimé Pouly PME 20078 Christian Busin, 25.05.2012
  9. 9. Main player: Goupe Aimé Pouly► Successful innovation: The Pain Paillasse► Trademarked combination of flour► Joint venture with Groupe Minoteries► Franchise system: 1‟200 bakeries in Switzerland and 11 other countries in Europe sell the bread9 Christian Busin, 25.05.2012
  10. 10. Main player: Bäckerei Hug► Biggest retail bakery chain in Central Switzerland► 19 branches, specialized on bread and buns► Central production in Lucerne► Annual turnover 2011: 30 million CHF (1.5% market share)► Family-owned in the 5th generation► management bay-out in 2009 (Paul Phillip Hug)► Retail business: focus on high quality and geographic area of Central Switzerland► Wholesaling business: cost leadership, capacity utilization10 Christian Busin, 25.05.2012
  11. 11. Main player: BackWerk► German company with 1 branch in Schaffhausen► Self-Service► Focus on price leadership► Heavily depending on central points of sale11 Christian Busin, 25.05.2012
  12. 12. Main players: Summary of the generic strategies ► Focus strategy: high quality and particular segment (i.e. limited geographic market) ► Only BackWerk stands out (“real” bakery?)12 Christian Busin, 25.05.2012
  13. 13. Competitors ► Direct competitors in the bread market ► Food retailer ► Petrol station shops ► Substitutes and potential entrants ► McDonalds, Bretzelkönig ► Foreign Retail Bakery chains13 Christian Busin, 25.05.2012
  14. 14. Competitors: Migros ► Biggest Food retailer in Switzerland (26% market share in food) ► Own bakery: Jowa ► 792.8 million turnover 2011 ► 8 regional industrial and 90 in-store bakeries ► supplies Migros twice a day with fresh products ► Point of Sale: 623 supermarket and 150 petrol station shops ► Product range ► about 200 breads ► Relatively cheap standard breads to high quality products (Pain Création) ► Sustainability and CSR valued high14 Christian Busin, 25.05.2012
  15. 15. Competitors: Coop ► Second biggest food retailer (market share 22%) ► High-quality approach, implementation of a process that allows longer fermentation ► Operates 7 industrial and 35 in-store bakeries ► 230 products ► Point of sale: 557 supermarkets and 258 Coop Prontos ► Production strategy 2015 ► CSR issues15 Christian Busin, 25.05.2012
  16. 16. Competitors: Aldi ► Market entry 2005, 150 branches ► 8 different breads, all of them organic ► Relative cheap prices ► Automatic-baking oven as an innovation?16 Christian Busin, 25.05.2012
  17. 17. Illustrative Map of the Swiss Bread Market very specialized Average Retail Bakery the Product Range Specialization of somewhat specialized standard range Low High Quality Focus17 Christian Busin, 25.05.2012
  18. 18. Competitors: Petrol Station Shops ► Competitive advantages: long opening hours, good reachability ► Products final baked in-store ► Main players: ► Coop Pronto ► Migrol (Migros) ► BP ► Eni (Agip) ► Avec18 Christian Busin, 25.05.2012
  19. 19. Substituts: McDonalds ► Easy Morning strategy ► Range of breakfast meals: Croissant, toasts, drinks ► Aims directly at market shares of retail bakeries19 Christian Busin, 25.05.2012
  20. 20. Substituts: Bretzelkönig ► Offers pretzels, sandwiches, hot dogs ► Point of sale: highly frequented places (railway station) ► High quality, high price strategy ► Targets at commuters20 Christian Busin, 25.05.2012
  21. 21. Potential Entrants: Paul ► French boulangerie chain from Lille ► 449 franchises worldwide in 27 countries ► 140 different kind of bread ► Strategy: bakery-based fast-casual coffee ► Products centrally produced in France and deep-frozen delivered to the branches ► Switzerland: Naville with franchise rights ► 4 branches in 2008, ambitious plans ► All closed down by the end of 200921 Christian Busin, 25.05.2012
  22. 22. Potential Entrants: Kamps ► German retail bakery chain ► Early 2000s: 2„000 branches in Germany and the Netherlands (Bakker Bart) ► German market: determined by price ► Financial difficulties and down-sizing ► Newest strategy: KAMPS Backstube ► Back to the roots ► Self-made products22 Christian Busin, 25.05.2012
  23. 23. Suppliers Flour ► Main supplier: Swiss mills ► Very concentrated market ► Bakery industry not a big customer ► Threat of forward integration ► High bargaining power ► Limitation of the power: ► Strategy of product standardization by the SBKV (lowers switching costs) ► Pistor (purchasing cooperative)23 Christian Busin, 25.05.2012
  24. 24. Suppliers Labor ► Well-skilled workers needed ► High value of apprenticeships ► Wage agreement between union and employers representatives ► GAV, universally valid ► High bargaining power of Labor24 Christian Busin, 25.05.2012
  25. 25. Buyers ► Very differentiated ► Purchase only small quantities ► But: ► have qualitative alternative sources (Migros, Coop) ► face only low switching cost ► Medium bargaining power25 Christian Busin, 25.05.2012
  26. 26. Corporate Social Responsibility ► Many bakeries too small to be a political actor ► However: local initiatives that show CSR ► Procurement practice: organic ingredients, free-range eggs, sustainable palm oil e.g. Beck Keller: purchases its ingredients entirely from local farmers ► Usage of resources: high power intensity of the baking process e.g. Bakery association of Obwalden: waterpower ► Human resources: Educating apprentices as a social issue, extremely high share of apprentices in the bakery sector (12%) e.g. Sutter Begg: Rookie-Club Porter and Kramer 200826 Christian Busin, 25.05.2012
  27. 27. Concluding remarks► The Swiss retail bakery market is at change: ► Trend toward concentration ► Competition from food retailer with high quality strategy► However: still very much fragmented► Possible solution: Franchising! ► Why not? • Insufficient financial resources • Locally driven bakery market? • Failure of such a strategy (Paul)27 Christian Busin, 25.05.2012
  28. 28. Thanks for your attention!28 Christian Busin, 25.05.2012

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