Australia's desserts sector: a snapshot [part one]
Australia’s desserts industry is thriving, and its thanks in part to franchised brands that play in the space.
Today’s consumer is increasingly health conscious, so when they choose to treat themselves and indulge in a sweet treat; they opt for premium quality products, and franchises are changing up their offering in response.
In IBISWorld’s Speciality chocolate stores in Australia industry report (September 2014) franchises such as San Churro are credited with transforming the shopping experience.
The report reads: “Specialty chocolate stores have positioned themselves as places to consume high-quality food and beverage products and marketed themselves as a place to source premium products.
“Franchised specialty chocolate stores have also been more successful than their coffee shop equivalents, with consumers readily associating well- known brands with quality chocolate.”
The report states franchises have driven demand within the speciality chocolate stores industry over the current year, with revenue forecast to grow by 2.6 percent over 2014-15, to reach $297.6 million.
Additionally, it is forecast to grow at a compound annual rate of 2.7 percent over the five years through 2019-20, bringing revenue to $339.5 million.
When it comes to ice cream, customers are similarly seeking premium quality products, and healthier options are expected to gain momentum.
IBISWorld’s Ice cream stores in Australia industry report (August 2014) states: "Ice cream and gelato stores that offer premium and gourmet products are also expected to be more profitable than stores offering basic, generic ice creams products.”
Franchises in particular are fuelling growth within the sector, both in terms of revenue and outlet numbers.
IBISWorld’s ice cream report predicts “the four largest companies operating in the industry, which have extensive franchising networks, will account for 30.2 percent of ice cream stores and 40.7 percent of industry revenue in 2014-15."
In the five years through 2019-20, ice cream industry revenue is forecast to increase at an annualised 2.1 percent, to reach $593.2 million.
St. Louis operates within both the ice cream and chocolate store sub-sectors – its offering includes ice cream, sorbet and yoghurt products, as well as those typical of a specialty chocolate store or cafe.
“We have a full dessert menu that includes sweet crepes, Belgian waffles, Churros and a range of cakes and patisserie products, which are made fresh daily,” explains operations manager Artemisia Karamalis.
She’s noticed an increase in demand for more indulgent items among customers, and says St. Louis has updated its offering in response. “Over the years, our clientele have told us they want more decadent, authentic desserts, and we have worked hard to perfect this.
“The dessert bar industry has blossomed of late, and we feel it can only improve and expand, as our clientele love to indulge.”
It makes sense then, that the brand’s most popular products are quite decadent, both in their flavour and presentation – it reflects the idea that while people are more health conscious, when they opt to consume a dessert they want to go all out on premium products.
“Our clients are those who are happy to splurge on something yummy that is made from good ingredients – we don’t compromise on quality,” Karamalis explains.
St Louis’s best-selling products include the Sweet Amalia Profiterole Journey, which comprises three different flavoured profiterole ice cream sandwiches – there’s Nutella, wild strawberry and choc-peanut butter, and they are drizzled with pure melted chocolate.
There’s also the Ferrero Waffle – a warm Belgian waffle which is again drizzled with pure melted chocolate, and it is topped with crunchy chocolate coated wafer balls, melted Nutella and milk chocolate drops and served with french vanilla ice cream.
Karamalis also sees the rise of the after-dinner dessert destination – where rather than order from a restaurant’s dessert menu, diners opt for a separate venue alltogether.
“[People are] actually entering entire other premises to satisfy their dessert needs," she says.
“We also predict there to be a trend in the éclair in the coming months and hope to be a part of this trend.”
She explains St. Louis updates its menu on a seasonal basis, and that the brand offers great support and training. “Our franchisees receive a high level of support, guidance and training during all stages of the franchising process.
“We provide on-site training at our flagship store and in-store training both prior to and during the early stages of opening. An ongoing support service is also offered to our franchisees.”
Franchisees don’t need any prior experience by virtue of the St. Louis model, which Karamalis says is simple and user-friendly.
“A passionate, well-motivated and driven individual will succeed in a St. Louis franchise. They must have great communication skills and most importantly, have a love for all things dessert,” she adds.