Deeper deals take big slice of bread sales

Few have escaped unscathed from the battlefield of the wrapped bread market, with price cuts and falling volumes wiping £142m off the category’s value. That’s the fifth greatest decline of the year. 

Allied Bakeries’ Kingsmill has suffered the worst, with average prices down 10% year on year and bread sales down £77m. Allied will be hoping this year’s packaging refresh, and recent relisting of its core bread lines in Tesco, will help turn around its performance. Like many bakers, it has also looked to sandwich alternatives to drive value, launching Kingsmill Sandwich Thins in 2014.  

Late to the game, Hovis extended into sandwich alternatives with thins and flatbreads in October. Like the fortified loaves launched in September (see below), these are branded Good Inside and set apart from rivals by being fortified with omega-3, fibre and wheatgerm, and 14 ‘essential vitamins & minerals’. Good Inside has been promoted with the first Hovis TV push in three years - a modern take on the brand’s ‘boy on a bike’ advertising. Hovis hopes Good Inside - first in a pipeline of innovation planned for the coming months - will add value: Hovis has suffered an even steeper average price decline than Kingsmill, although a stronger volume performance has kept its sales loss below £50m.  

“Prices in the bread market have become substantially more competitive,” says Hovis market strategy & planning director Chris Brough. “Bakery features in almost every household’s weekly purchases, placing it firmly under the spotlight when it comes to offering consumers value.” 

Warburtons invested £18m in ads fronted by Sylvester Stallone in the spring, and topped that in the autumn with a £25m push starring The Muppets to promote its new giant crumpets. Unlike its big two rivals, Warburtons has increased volume sales in the past year and, while it has also suffered price deflation, this has been slightly shallower than Hovis or Kingsmill, resulting in total wrapped bread sales down a relatively modest £5.7m. 

But it isn’t all bad news in bread, with many bakers suggesting the market is stronger than a year ago despite the pricing activity that is eroding value. Indeed, things could be starting to stabilise; volume decline has slowed from the 6.4% recorded a year ago to 2%. 

There are even some heroes in bread, with Genius sales up almost a third year on year as the brand rides the soaring interest in free-from. Roberts Bakery, meanwhile, has grown value and volume, focusing marketing activity on its sliced white under the banner ‘Bring out their soft and fluffy side’.

And in spite of bread’s losses, it’s not toast yet, says commercial director Tim Wild: “With penetration of 96%, bread is still loved and eaten by practically the total population.”