Enhancing the functionality of australian wheat and flours derived from australian wheat in indonesia, malaysia, singapore, thailand and vietnam

Enhancing the functionality of Australian wheat and
flours derived from Australian wheat in Indonesia,
Malaysia, Singapore, Thailand and Vietnam

Peter J Batt and Fay Rola-Rubzen, Curtin University

KEY MESSAGES
The bread market in South East Asia is rapidly expanding as a result of greater westernisation,
increasing personal disposable income, convenience, the increasing assortment and greater range of
products available, and the perception that bread is a healthy product. While Canada and the US are
the major suppliers, Australian wheat and wheat from numerous other countries are often blended and
milled. For Australian wheat, after the abolition of the single desk, millers have reported a greater
variance in the quality of the Australian wheat they receive. While the product still conforms to the
desired specifications, the variance is much greater. This suggests the need for some regional or
geographic indicators to be used and the need for varieties to be segregated. Some concerns were
also raised by millers about the need for a quality assurance system. As many of the large scale
bakeries produce for an export market, traceability is mandatory to provide assurances that the
product is free from chemical residues. While white breads and buns dominate the market, the most
rapidly growing segment of the market is for wholegrain and multigrain products. In this segment of
the market, most customers are moving towards the use of premix flours, imported primarily from
Europe. Similarly, there is a growing trend in both pastries and the loaf bread segment for the use of
frozen dough and partly baked (70%) frozen bread. While it is possible to import flours derived from
organic wheat, it is almost impossible to source the other ingredients necessary to produce organic
breads.
AIMS

This study, commissioned by the Centre for Grain Food Innovation, sought to: (i) explore consumer
trends in the bread market in Indonesia, Malaysia, Singapore, Thailand and Vietnam; and (ii) identify
the key attributes that bread manufacturers look for in their decision to purchase flour.
METHODOLOGY

To gather the information necessary to answer each of the research questions, executive interviews
were undertaken with millers and a selection of bakers in each of the five target countries. The
interviews were undertaken by Dr Peter J. Batt, Professor of Food and Agribusiness Marketing at
Curtin University and Associate Professor Maria Fay Rola-Rubzen.
To facilitate the interviews, an interview guide was developed to ensure to the maximum extent
possible, that all respondents were asked similar questions. However, the order in which the
questions were asked was flexible and the duration of each interview was very much dependent upon
the amount of enthusiasm shown by the respondents.
In Indonesia, the list of potential interviewees and the interview schedule was developed by the
Australian Trade Commission in Jakarta. Over five days, 9 executive interviews were undertaken in
and around Jakarta.
In Malaysia, the interview schedule was developed by Dr Nolila Mohd Nawi, Department of
Agribusiness and Information Systems, Faculty of Agriculture, Universiti Putra Malaysia, who also
arranged transport and accompanied the researcher. A total of 6 executive interviews were completed
in the Klang Valley.
In Singapore, the list of potential interviewees and the interview schedule was developed by the
Australian Trade Commission. Over two days, 5 executive interviews were completed.
In Thailand, the interview schedule was developed by the Agricultural and Food Marketing Association
for Asia and the Pacific (AFMA), who also arranged transport and accompanied the researcher. A
total of 8 executive interviews were conducted in and around Bangkok.
In Vietnam, although the list of potential interviewees and the interview schedule was developed by
the Australian Trade Commission, the researcher was accompanied by Dr Pham Tam Minh from Nong
Lam University, who provided transportation and translation. Over 4 days, 10 executive interviews
were conducted in and around Ho Chi Minh City.
RESULTS

The market for bakery products is expanding. The key drivers for the expansion include:
• An increasing personal disposable income. • Greater westernisation, mainly through travel. • Convenience. With both partners working, there is less time available in the morning to cook rice. Sliced white bread is being consumed primarily for breakfast with a spread, which includes chocolate, kaya, jam and/or peanut butter. • The increasing assortment and range of products available. • Bread is perceived to be a healthy product. • Despite the growth, it is important to note that bread is NOT a staple food and it is still often Most customers are happy with their current suppliers. Flour from Japan is widely recognised as the market leader because: • The product is white (and unbleached). • Low ash content (often less than 0.35 and with a very narrow range). • High protein (through the use of blended wheats from the US and Canada). However, Japanese flours are expensive.
The major problems throughout the region are primarily associated with the age of the flour. Flour
which has been stored too long is more likely to be infested with weevils. Furthermore, many bakers
report significant differences in the baking quality commensurate with the age of the flour. This is
generally manifested by the need to adjust the amount of water added. Others report problems
associated with the variance in quality from one batch to another. No doubt this problem is related to
the different sources of wheat that the millers have utilised. Invariably, most bakers find it necessary
to sieve the flour before use because of the foreign matter that it often contains, the coarse grind and
the high humidity.
Few bakers have any direct experience with Australian flour, but most recognise that Australian wheat
is utilised in the blends. Since the abolition of the single desk, millers have reported a greater
variance in the quality of the Australian wheat they receive. While the product still conforms to the
desired specifications, the variance is much greater. This suggests the need for some regional or
geographic indicators to be used. Some concerns were also raised by millers about the decision by
CBH to abandon the Better Farm IQ system. For those bakeries that produce for an export market,
traceability is mandatory to provide assurances that the product is free from chemical residues.

In the five target countries: Indonesia, Malaysia, Singapore, Thailand and Vietnam, the baking market
can be clearly segmented into three discrete groupings: (1) loaf bread; (2) buns; and (3) cakes and
pastries.
In the loaf bread market, sliced white bread is the predominant product. However, the most rapid
growth in this segment is occurring for wholegrain and multigrain products.
Within the loaf bread market, it is important to differentiate between the large scale corporate bakeries,
the boutique manufacturers and the traditional bakeries.
For the large scale bakeries:
• The flour is often delivered in bulk one to two times per day directly from the mills. A Certificate of Analysis generally accompanies each shipment. The key purchasing parameters include: • The key purchasing criteria are reliable delivery, consistent quality and a competitive price. Customers do not readily switch suppliers because of the potential impact a change in flour quality may have on the bread making process. • Most large-scale customers want the flour to be delivered unadulterated: that is, they prefer to add any bread enhancers and other ingredients themselves as it gives them greater control and its less expensive. • The flours delivered are predominantly a blend of Australian, Canadian and US wheat. • Canada and the US are recognised as the major suppliers of wheat for bread flour because of • In this segment of the market, functional breads are common, where the product is enhanced through the addition of vitamins (B1, B2 and B3) and minerals (Ca and Fe). However, in much of Asia, given the high consumption of fish in the diet, bread is not perceived to be an appropriate carrier for Omega 3. • Most breads are free of preservatives. In the tropics, the high temperature and high humidity dramatically reduce the shelf life. In many instances, products are replaced on the retail shelves on a daily basis, with unsold product being frozen or reprocessed for the institutional market. • There is little recognition of the need or benefit from flours derived from wheat that have been grown in a sustainable manner. However, for the majority of corporate bakeries, since many export, the flour MUST be derived from wheat that is NON GM. The boutique bakeries which includes hotels, cafes and the retail chains, generally manufacture all three products. In this market segment, loaf bread generally comprises 20% of the product mix, buns 60% and pastries 20%. In this market segment: • The flour is generally delivered one time per week or one time every two weeks in bags. Product is generally delivered by distributors, rather than transacting directly with the mill. • Most customers are moving towards the use of premixes. The reasons for this include: the lack of skilled labour. Most firms are reluctant to train employees as the rate of staff turnover is high and there is always the risk of training a potential competitor the lack of space, particularly in the retail stores the need to standardise product quality. • The major suppliers of these premixed flours are European. • Most of the premixes are designed to be blended with local flours. This is because of the high • There is a growing trend in both pastries and the loaf bread segment for the use of frozen dough and partly baked (70%) frozen bread. This is driven again by the lack of staff, the lack of storage space and the poor shelf life of bread. The use of partly baked frozen bread enables the retailers and hotels to re-bake and condition the bread before making it available to consumers. • In order to compete with the large corporate bakeries, the smaller boutique operations are specialising in the production of traditional European breads including ciabatta, Dinkelberger, Dinkelspitz, pumpernickel, rye and spelt. As the majority of these breads are derived from imported mixes, there is little opportunity to differentiate as the mixes are generally available to all bakeries. Furthermore, as it is often necessary to have an import license, only one or two companies may be authorised to distribute product. • While it is possible to import flour derived from organic wheat, it is almost impossible to source the other ingredients necessary to produce organic bread. • The flour is generally delivered one time per week or one time every two weeks in bags. Product is generally delivered by distributors, rather than transacting directly with the mill. • The long and fragmented distribution system often results in contamination by insects and the • The key consideration in the decision to purchase is price. The flour is usually bleached and may contain a number of other additives including benzoyl peroxide and azodicarbonamide. However, bakers are generally reluctant to change suppliers because of the detrimental impact a change in flour may have the quality of the product. Margins are tight and bakers can seldom afford the risk. • Bakers may or may not use emulsifiers and bread improvers depending on the nature of the product. High cost ingredients such as butter are seldom used. • Preservatives are seldom used and hence the shelf life of the product is short. • Quality is generally assessed by taste, texture and colour. • In this segment of the market, price is also the main purchasing criteria for consumers. There is no demand for any improved functionality or sustainability as the inclusion of these attributes is perceived to add to the price.
For buns, the market can be broadly described a soft, sweet and white. The product is supplemented
by a variety of both savoury (meat and fish) and sweet (chocolate) fillings that are primarily eaten as a
snack. In this market segment, innovation is essential, with most bakeries introducing at least one
new product a month. Few products are truly innovative: most are simply a new product variant.
CONCLUSIONS

To varying degrees in all five countries, bread is produced not only for the domestic markets but also
for export markets. In this segment, there is a general requirement for NON GM wheat and for
traceability to the farm gate to provide assurances that the grain is not contaminated by chemical
residues or the use of prohibited or non prescribed chemicals. There is an immediate need for
industry to explore an appropriate mechanism to facilitate the greater adoption of on-farm quality
assurance systems among Australian grain growers.
Since the abolition of the single desk, millers and several of the larger corporate bakeries have spoken
of the greater variance in products derived from flours produced from Australian wheat. While the
wheat continues to meet established quality specifications, the variance has increased presumably as
a result of exporters sourcing from a greater number of growing areas and blending the wheat before
shipment. It may be appropriate to explore the use of geographic indicators as a means of assuring
customers of improved functionality.
With a growing shortage of skilled labour and the need to standardise product quality, there is a
growing trend among many institutional users of Australian flour towards the use of premixed flours.
While premixes are predominantly used for the production of traditional wholemeal, multigrain and
seed breads which are perceived to be more healthy premixed flours are also being used by many
small retail bakeries, franchises and hotels. As the majority of premixed flours are imported from
Europe for subsequent blending with locally produced flours, there is a need to explore how premixed
flours derived from Australian wheat perform compared to the European alternatives. For similar
reasons, the use of frozen doughs and partially cooked frozen bread loaves, buns, rolls and pastries is
expanding. It may be opportune to explore if the performance of products derived from frozen doughs
can be improved by the greater use of flours derived from Australian wheat.
There is an on-going demand for market research as the market is rapidly evolving. There is a need
to go beyond the millers and to establish collaborative long-term relationships with the major users of
flours derived or potentially derived from Australian wheat.
KEYWORDS

consumer trends, market segmentation, bread and baked products
ACKNOWLEDGEMENTS
GRDC Project No: CUR00008

Paper reviewed by: Janet Bornman, Sumana Bell, Stuart Johnson, Larisa Cato

Source: http://www.aegic.org.au/media/13513/cu2012_batt_peter_enhancing_the_functionality_of_australian_wheat_crop_paper.pdf