Bakery & bread: inflation helps bread to rise again

Bread is on the rise again. Sales have risen 0.8%, ending five consecutive years of value decline. But don’t go popping any corks just yet. Not one of the top five wrapped bread brands has shifted any extra loaves.

Growth is purely inflationary, with milling wheat prices on the up since 2016. “Increased prices have added £33m to the market as higher costs fed through to consumers,” says Nielsen senior client manager Carol Ratcliff.

In fact, the supers have sold nearly 28 million fewer loaves overall, a decline of 2%. Brands have borne the brunt with a 7.3% slump in volume - 80.4 million fewer loaves - as retailers increase own-label listings.

Indeed, own-label bread is up by more than a fifth, having put an extra £43.9m through the tills. That makes it the fourth largest own-label gain in this year’s report, thanks to a flurry of premium NPD. Ratcliff notes Tesco and Asda have been particularly active.

“The big four and others are driving their identity via own label, resulting in greater space and range allocation,” adds Roberts Bakery marketing director Megan Harrison. “This is putting pressure on brands, who now have to redefine their value and purpose.”

Easier said than done. Kingsmill is yet to reap the rewards of its 2017 relaunch intended to emphasise its “baking credentials”, suffering the category’s greatest loss of £18.4m (8.4%). A steady stream of NPD hasn’t stopped Warburtons falling £9.9m (2.3%). Roberts has lost £3.5m (7.9%) despite 2017’s relaunch as the ‘Next Generation Bakery’ alongside premium innovations such as Gin & Tonic Fun Buns. (But Harrison cites later figures showing the brand taking share from the big three.)

Of the top three, Hovis is alone in achieving value growth of £3.3m (1.1%). Hovis head of insight Sara Green puts this down to growing demand for posher loaves. She believes bread’s relatively small share of food budgets suggests scope for further premiumisation.

“In response, our key focus is to develop new loaves that deliver more,” she says, pointing to its Seeded Batch loaf and premium White Bloomer.

Everyone’s at it. Roberts’ Bloomer range won national listings in Asda and Morrisons this year. Warbies’ Lancashire Thorough Bread was Nielsen’s top launch of the year, helping to drive 4.5% growth in premium bread. “Shoppers want to trade up and expand their bakery repertoire,” says Warburtons category controller Martin Baptie.

Still, things don’t always go to plan. Warburtons’ £1m new ‘craft’ facility (see Top Launch) looked on shaky ground in May, when a proposed Sainsbury’s trial of a trio of sourdoughs didn’t come off. Morrisons eventually listed the loaves in November. Let’s hope this innovation doesn’t turn sour.

TOP LAUNCH

Warburtons Sourdough, Warburtons

Britain’s biggest baker is blurring the boundaries between artisan and plant bread with its growing roster of sourdough loaves. The white sourdough toastie is the latest in a string of innovations following a £1m investment in a new Milton Keynes facility, designed to recreate craft offerings at a larger scale.  “We want to find the sweet spot between traditional packaged bread and the true artisan bakers,” chairman Jonathan Warburton said in May. Looks like he’s found it with this one.