The bread market is in a strong state as a health-conscious but indulgent public trades up from economy loaves to something more special, says Tracy WestA whopping 99% of the UK population eats bread. But, according to TGI/BMRB data, we're eating it less frequently. In 2002, 80% of adults ate bread once or more a day, but by 2005 this figure had dropped to 73%. Despite this, in the year to February 26, 2006 the total wrapped bread market was worth £1.3bn, up 6.3% on the previous year [TNS].
Much of that growth came from companies passing on increased costs - such as hikes in energy and in flour.
But Sarah Miskell, category marketing controller at Warburtons, says half the growth came from shoppers trading up. &aquot;Shoppers who usually buy own label are going into brands. They like consistent quality. Those who used to buy economy bread are moving into premium lines. Products such as farmhouse loaves with a domed top, dusted with flour, are selling well.&aquot;
Stephen Davis, Hovis Granary's marketing manager, says: &aquot;The demand for premium and healthy bread, including seeded and wholegrain, continues to grow. We have relaunched and broadened our Hovis Granary range to provide health-conscious consumers with more quality, choice and variety. The success of Hovis Granary shows that consumers are prepared to pay a premium for these products.&aquot;
Health, as Davis says, is another key driver. Publicity about folic acid added to bread has been doing the rounds while the FSA decides whether to make fortification mandatory, and salt levels are pushed down.
Miskell agrees health is important, but is keen to add that &aquot;bread is inherently healthy - a good thing to eat&aquot;. &aquot;We found that added-value loaves, such as white bread with the goodness of wholemeal, are performing very well. So are grain and seeded loaves, as more people recognise the importance of fibre and wholegrain in their diets.&aquot;
Jonathan Burr, director of customer
marketing at Allied Bakeries, also says that bread is increasingly seen by consumers as a vital part of a healthy diet. &aquot;Although recent surveys show that the British move to a healthier diet is a slow one, the growing trend is away from quick-fix diets and vitamin pills towards more wholesome foods,&aquot; he says.
&aquot;Consumers are also taking a greater
interest in the quality and origin of food than ever before. However, the biggest
challenges to healthier eating - taste and time - remain unchanged. For suppliers such as Allied, the provision of tasty, wholesome foods that are convenient is crucial to help improve the nation's diet.&aquot;
Gordon Polson, director of the Federation of Bakers, says that salt levels in bread have been reduced by some 25% over the past 25 years. Within the next 12 months, he says, bread will contain a maximum of 0.6g of sodium per 100g, dropping to 0.54g within two years.
However, Polson argues that salt reduction in bread should not go too far. &aquot;It is widely recognised that any change that may diminish the flavour of bread would be
counterproductive to the objective of improving the nation's diets. Salt plays a critical technical role in dough formation and, as levels decline, this can become a significant risk factor.&aquot;
To make bread even more convenient for consumers, manufacturers have been concentrating on packaging and, in particular, smaller pack sizes to meet the nation's changing demographic to more single households. Miskell says it is important to note that smaller households want smaller loaves, but they want the same size slices - just fewer of them. And in rolls, Warburtons is doing smaller pack sizes - from packs of one to packs of four - to reflect these needs.
According to TNS, the rolls and baps
market is worth more than £490m and showing growth of 2.6% in value and 8% in volume [52 w/e February 26, 2006]. The key sales driver is consumers buying more frequently and spending more on average per trip.
Branded bread rolls and baps are driving growth, with sales of white up 6.4% and brown up 11.6%. Own label brown is the biggest contributor, up 24.4%. Warburtons is the leading brand and the bestselling SKU is its 12 white sliced sandwich rolls.
NPD is vital, but RHM is keen to cash in on the heritage of its Hovis brand. It is celebrating '120 years of goodness' this month with limited-edition packaging for Hovis Original Wheatgerm 400g and 800g loaves.
Over at Allied, Jonathan Burr says: &aquot;Bread, rolls and snacks are constantly evolving categories, particularly now that retailers can no longer rely on just a few products to meet their customers' needs,&aquot; he says. &aquot;Allied Bakeries and its competitors invest millions of pounds each year on NPD in response to consumer demand.&aquot;
As a result, in the bakery pipeline is a new chilled range from Kingsmill comprising salsa ciabatta, smoky BBQ ciabatta, cheese-topped dough balls and roasted garlic flatbread, which the company says is tapping into the growing demand for premium, Continental-style products in the UK.
And, after a successful trial in Sainsbury,
Allinson Oatmeal and White will be made more widely available this summer.
Allied Bakeries has also enlisted the help of celebrity chefs. James Martin has been endorsing the Allinson brand, while Antony
Worrall Thompson championed the new Burgen wholegrain & cranberry loaf from Allied via a low-GI roadshow. Worrall Thompson was diagnosed with a pre-diabetic condition, but claims to have turned his health around by losing more than two stone on the GI diet, of which low-GI bread can be a part. What's more, Allied Bakeries claims that its new Burgen brand is bringing in new consumers to the healthy breads sector and has achieved sales of £500,000 in just 12 weeks.
The retailer's view
The supplier's view
The Expert's View
Kingsmill
Budget: undisclosed
Manufacturer: Allied Bakeries
All in One Riddlers
Budget: part of a £2m spend
Manufacturer: Warburtons
Hovis
Budget: part of a £1m campaign
Manufacturer: RHM
Soundbites
looking back what we said in 2001
Trends & Developments
Research Notes
CONSUMER FEEDBACK
Nick Hill
Category manager for bakery, Musgrave Budgens LondisStandard plant bread will always be around but performance is pretty static. The sector's volume is not growing significantly, but on the other hand value is as consumers trade up to more premium-quality products for which they are prepared to pay a higher price. At Budgens, we do well with products such as the La Brea Bakery breads and specialist products from smaller suppliers such as More Cakes.In Londis, we are seeing positive results from higher value rather than the standard sliced loaf. People are prepared to pay more for occasion-type breads and hand-crafted lines that are suitable for use at dinner parties. Bake-off and our Cuisine de France operations are continuing to grow significantly as a result of this growing trend. The Atkins diet did have an impact on bread sales but I don't believe health issues are having a massive impact. We are now seeing some healthy lines coming through, such as Hovis Best of Both, which is showing growth.Nick Stanley
Marketing controller
WarburtonsIn recent years consumers' eating habits have changed as convenience and health have come to the forefront of their minds, whatever category they are shopping. However, bread remains an integral part of the nation's diet as it is recognised by them as being both convenient and inherently healthy. Consumers are demanding better quality and a greater variety of products, and are prepared to pay more for the reassurance of a leading brand. At Warburtons we are well-placed to capitalise on the fact that consumers will pay more providing they get the higher quality that they expect and, as such, offer a range of products that tap into this demand. We hold a premium brand positioning as well as the bestselling bread, our shoppers are the highest-spending and we are committed to a strong programme of new product development to drive the brand forward and provide opportunities to grow the market.Michael Curry
InterbrandWhen did bread stop being bread and start becoming a brand experience? With new forms, flavours, health formulas and sensorial eating attributes a commoditised, straightforward category has been turned into a thriving food area. Blazing the trail are leaders such as Kingsmill with new lines such as 7 Days Fresh, which offers bread that stays fresh longer with a simple resealable label, and products with real personality. But what's most impressive about Kingsmill is its stretch into new forms and uses such as rolls, crumpets and pancakes. This means a potential cross-selling of multiple offerings to each consumer.Keen to compete are Hovis and Warburtons. Both offer strong choices in the areas of health and lifestyle with organic offerings as well as Best of Both and All in One.Warburtons' Milk Roll brand offers calcium-fortified bread for strengthening teeth and bones, and Hovis strives to settle the centuries-old crust debate with its Crusty offerings for the must-haves and Invisible Crust for the have-nots.Michael Curry
InterbrandKingsmill launched an ad campaign in March this year to support the brand's relaunch. All the TV ads have been set in the Kingsmill bakery and focus on a relentless drive to produce the perfect loaf. The campaign is the first major piece of activity for the brand since the launch of its The King commercial in November, both campaigns being part of a £12m push.Michael Curry
InterbrandThe TV ads for Warburtons' All in One Riddlers, which went on air in January this year, form part of the company's ongoing £2m support programme for the brand and focused on the 'mystery' surrounding how the cheese got into the uncut roll. The ambient cheese rolls were launched last September to target busy mums with a product ideal for kids' lunchboxesMichael Curry
InterbrandOn May 10 this year the flat cap-wearing boy on a bike returned to the small screen for ten days only as part of a £1m campaign in honour of the brand's 120th birthday. The commercial, which was shot in 1973 by Ridley Scott, has won several prestigious awards and featured in C4's Best TV Commercials. Radio ads kicked off at the same time in a bid to drive sales of the brown bread portfolio.Michael Curry
Interbrand"People might say that an established category such as bread lacks in innovation but we are strident that is not the case. Take our Invisible Crust, launched last year, which was not only a first for the UK but a world first. Look also at our beans and tomatoes packaging, which was a first for the bread market, breaking all the rules of traditional bread packaging. We were also the first brand to add wheatgerm to a white loaf in Best of Both, which has since prompted the launch of copycat products from other brands."Ifan Jenkins Brand manager, Hovis?"Own label? Well, things are very exciting in bread brands, but while own label products still comprise a good portion of the offerings in-store, most remain less than impressive with limited variants and rather blasé packaging that leaves this shopper feeling a bit doughy! These ranges have a lot to learn from Kingsmill, which really has its finger on the pulse of what today's consumers are looking for. The company has redefined bread in terms of the consumers who eat them. I also give it an A for packaging and architecture with clear differentiation between lines and variants and well-developed verbal identity on pack. It has something for everyone."Michael Curry Interbrand?"People are always aspiring to home baking so our [Aunt Bessie's ready-to-bake range] makes it easy for lots of adults who find it quite difficult to pick up the old 'grandma' skills. It raises the bar in terms of freshness and quality."John Hendy Marketing controller, Tryton Foods?"I am a big supporter of local artisan bread companies but in the end it's all about taste, and that's what we can beat these companies on. Our breads have stayed true to traditional baking methods even though they are shipped as frozen from the US. I am not ashamed about the fact that we make more than 100 skus a day."Nancy Silverton Founder, La Brea Bakery?"The Federation of Bakers has for many years taken a positive and proactive approach to salt reduction. Salt levels in bread have been reduced by some 25% over the past 20 years and, as recently as 2004, the industry implemented a further 5% reduction. The federation continues to be committed to the FSA's objective of improving the overall make-up of people's diets while also assessing the impact of any changes on consumer acceptance of the taste of bread."Gordon Polson Director, Federation of BakersMichael Curry
InterbrandThe relentess downward pressure by retailers on the price of a loaf - forcing bread to become a loss leader - was one of the key issues being explored in the May 26, 2001, Focus on Bread, Pastries & Bake-off feature.The price of an 800g Hovis wholemeal loaf in the multiples had fallen from 55p to 45p.At the very bottom end of the market a loaf had hit 17p.Peter Baker, chairman of the Federation of Bakers, expressed his anger at the devaluation of the category by short-term thinking."When overall returns are too low, investment in all senses is questioned, potentially to the long-term detriment of the category." Meanwhile, Eric Place, Allied Bakeries' commercial director, said: "Economy own-label bread is in serious decline because it isn't in the retailers' best interests to sell it. They make no money from it. "But there are value for money branded products and for the first time we are seeing multiples sell more manufacturer brands than they do own label. "We won't see cheap loaves disappear completely but we will see this category get much smaller."A Competition Commission report into the market had done nothing to harmonise the relationship between manufacturers and retailers.Suppliers themselves were fighting back with brand-building activity spearheaded by Kingsmill, Hovis and Warburtons. Value was being added to the overall market by innovation in speciality and morning goods and branded ready-to-bake lines. Five years ago, manufacturers were keen on lines that included fruit, while ethnic suppliers were pushing chapattis, wraps and naan, whether on their own or used within meal kits. Convenience store operators were latching on to the development of bake-off as a means of competing with the multiples.Michael Curry
Interbrand?Mission Foods plans to grow the own label-dominated wraps sector with its Deli Wraps. The products are available in four flavours: original, multigrain, Mediterranean herb and wheat & white. The fresh wraps market is currently valued at £31m and Mission Foods aims to grow the category by 50% in three years through the introduction of Deli Wraps and the use of an extensive consumer education campaign. Headed by celebrity chef Phil Vickery, the campaign will explain the differences between tortillas and wraps and demonstrate their versatility. An on-pack promotion will give consumers the chance to win a cookery day with the chef.?Warburtons' campaign to bring younger consumers to the fruit loaf sector continues with the launch of a mango & cranberry version. With a retail price of £1.24, it is being marketed as a premium product with larger slices so younger consumers can enjoy a healthy yet indulgent treat. Another new line from Warburtons is a pumpkin & sunflower batch. The 400g half-loaf is aimed at health-conscious smaller households and has an rsp of 88p.?Malt loaf producer Soreen has created a range of fruit loaves using its trademark sticky recipe and yellow packagingThe fruit loaf varieties will include new additions cinnamon & raisin and orange & sultana, together with relaunches of Lincolnshire plum and rich fruit loaf - following the traditional recipe of the main brand."The range gives us a platform to speak to non-malt loaf users," says brand manager Alison Dunn.A marketing campaign supporting the launch will include sampling and PoS material. Bread has become the latest product to get the Omega-3 treatment with a product launched by Sparky Brand that contains the healthy fatty acids. Ues Yuor Laof sliced bread contains 10% of the recommended daily intake of Omega-3 per slice, which is derived from pressed anchovies that are kneaded into the dough during the manufacturing process.The bread is available in white and stoneground wholemeal variants and is set to be launched into Sainsbury this month.?Snacking company Eatwell is giving microwaveable sandwiches more bite with the launch of a Feasters baguettes range. The chilled products are ready to eat after microwaving for two minutes and are served as a hot, crusty sandwich thanks to packaging technology that retains heat for quick cooking.The baguettes have an extended shelf life and come in three varieties - steak & onion, ham & cheese and chicken tikka.?Tryton Foods has launched a range of ready-to-bake traditional British scones, cakes and cookies under its Aunt Bessie's brand. The products are cooked raw from frozen and comprise a Victoria sponge cake, an eight-pack of chocolate chip cookies and fruit scones and a 12-pack of fairy cakes. Tryton Foods backed the launch with a £2m marketing campaign.?Nutrilaw's redeveloped selenium-enriched bread, which contains less salt and is claimed to have a lower glycaemic index than the previous version, is available from Waitrose stores. It is said by the company that the bread helps maintain a healthy heart and immune system.?Country Choice has added Yum Yums to its thaw-and-sell confectionery range. These are hand-made, twisted doughnuts glazed with a thin layer of icing and layered like a Danish pastry to give a lighter eat. To serve, retailers simply defrost the product at room temperature for two hours. The shelf life, once defrosted, is a day.The Yum Yums are priced at £18 per case of 40, offering a profit on return of 35% when sold at the recommended retail price of 69p.?RHM Frozen has launched a McDougalls bake-from-frozen morning goods range comprising pain au chocolat, croissants, pecan Danish, cinnamon Danish and custard Danish.The products come in packs of four, five or six and are designed to be cooked in the oven in just a few minutes.McDougalls brand manager Christina Richardson says: "Consumer interest in fresh morning goods has been heightened by the growth in coffee shops and in-store bakeries - driven by the appeal and aroma of fresh baking. The McDougalls bakery range offers consumers the same appeal and aroma, but baked at home, so the products can be enjoyed warm and fresh out of the oven."?RHM claimed an industry first when it launched its Hovis Invisible Crust at the end of last year. The bread, which it is heralding as the first genuine crustless loaf, was developed by baking in a special tin at a lower temperature to prevent a crust from forming.The bread comes in White and Best of Both variants that retain all the goodness of a regular loaf of bread, and is aimed at mothers who are fed up with wasting time cutting off the crusts when preparing sandwiches for their children.Michael Curry
InterbrandTotal wrapped bread rose 6.3% to more than £1.3bn in the latest year. The main driver of growth is still average price per pack. Plant bread, which accounts for the majority of wrapped bread value sales, has grown by 8.1% compared with last year while in-store bakery has experienced a slight decline of 3.3%. White bread, growing at 5.6%, is the dominant sector but its share is slowly being eroded as brown continues to outstrip its growth, rising 8.3%.Top brands remain the key drivers of growth within this market, with premium lines adding value.Tesco is increasing its dominance within bread by driving frequency of purchase along with adding value through a higher average price.The rolls and baps market is worth more than £490m and is showing steady growth of 8% in volume and 2.6% in value. Consumers are buying more frequently and buying more per trip, however average price is down, which is devaluing the category.Branded rolls and baps is a smaller sector of the market but is adding value, up 7% year-on-year, whereas own label is responsible for driving the volume increases. Plant bread rolls and baps, driven by branded, is offsetting the 4% value decline of in store bakery. Morning goods have remained static this year at just over £650m. Plant morning goods continues to dominate the market with more than a 70% share. Scones, crumpets and other toasting products have remained static leading to stagnant performance.Among the smaller sectors, strong growth has come through from lines such as malt loaves, pain au chocolat and brioche. Tesco and Asda have remained in growth, but Morrisons, Sainsbury and smaller outlets are down.Fiona Abbott, TNS WorldpanelMichael Curry
InterbrandOnly ten years ago the chilled bake-off market seemed in terminal decline as ready-to-eat chilled and frozen formats dominated purchasing behaviour. Pillsbury had, without progress, made a number of attempts to replicate its US success with chilled pastries to bake at home, while British supplier Kool went into receivership. Since that low point, our product monitors have picked up a steady stream of fresh attempts to establish chilled prepared pastry products with the UK consumer. Sara Lee tested a European range that included pizza dough and croissants, but it was short-lived, with consumers citing poor product quality and a lack of convenience compared with ready-to-eat forms. Products from branded suppliers, such as Saxby's, have proved to have staying power. Now they have company, with a rash of launches over the past six months from brands such as Aunt Bessie's and McDougalls.Aunt Bessie's Ready to Bake Fairy CakesSCORE: 38 AVERAGE: 36Baked from frozen, these cakes emerged "light, fluffy and moist". Price when compared with ready-to-eat alternatives on the market was the only problem, holding back an even higher rating.Saxby's Fresh Cookie Dough - Choc ChipSCORE: 41 AVERAGE: 39These freshly baked cookies had a very chocolatey taste and smell, with an authentic, soft texture and big chunks of chocolate. An above-category rating, although likely to be bought only as a treat. McDougalls Ready to Bake Cinnamon DanishSCORE: 39 AVERAGE: 40A freshly baked aroma set up expectations that were not fully delivered on trial. Nevertheless, a good rating that was only held back by health and value-for-money perceptions. Michael Curry
InterbrandMorning goodsIndulgence that lasts all day longItems such as crumpets, muffins, croissants and teacakes are called morning goods even though they are eaten at all times of the day. As such, Warburtons likes to describe them as 'bakery occasions' instead. While the market for morning goods is static, it still stands at £650m, about £160m more than the rolls and baps market. While Tesco and Asda have achieved growth in the category, this has been offset by a decline at Morrisons and Sainsbury, says TNS. Plant morning goods are driving the growth and currently account for more than 70% of sales. Toasting products and scones, in particular, are showing strong growth. Warburtons category marketing controller Sarah Miskell says that bakery occasions products are in growth because of their impulse nature. Growth in sales of traditional breakfast lines is fuelled by crumpets, with pancakes, potato cakes and English muffins all performing well. Miskell says Warburtons' crumpets is the top-selling branded SKU in the sector. Within the Continental breakfast category, croissants dominate but brioche, pain au chocolat and bagels are showing good growth. Sales of fruited lines are being buoyed by growth in scones, teacakes and a strong performance from malt loaves.Kate Raison, marketing director at Bakehouse, says that when it comes to sweet pastries, indulgence is still key, but convenience is also important. "Because of this, we have developed one of our newest sweet pastries - the chocolate & hazelnut twist - in the same handheld format as our cheese twist, enabling consumers to enjoy a real treat while they are on the move. "Products such as our mini Danish selection pack are still proving popular, enabling retailers to introduce 'pick and mix' or multipack style items to the in-store bakery."Mini versions of Bakehouse's bestselling all-butter chocolate and almond croissants have just been added to the range. They are made in France using a long dough-resting system that replicates how an artisan French baker would hand-make a croissant. This, it says, gives the croissant a light, open dough structure with a rich, buttery flavour that is seldom found in other bake-off croissants.Says Raison: "Bakehouse croissants are celebrated - Raymond Blanc says they are the best he has tasted outside his own kitchen - and our new mini versions are meeting consumer tastes for trying mini treats or indulging in more than one croissant at a time."Following its acquisition of major French viennoiserie manufacturer Appétit de France, Délifrance UK is able to supply a mini frozen viennoiserie range comprising croissants, pain au chocolat and pain aux raisins.Viennoiserie, a bestseller in France, Germany and the Netherlands, are loved for their convenience, freshness and versatility, says the company. Délifrance UK marketing controller Lucy Pickersgill, says: "Our research found that viennoiserie is filling a gap. Consumers currently need to buy equivalent ambient product either the day before - losing the freshness - or make a special trip to buy on the day. "Our frozen range of products allows consumers to stock the freezer and capture the freshly baked flavours and textures of traditional boulangerie fare at their convenience."Listings have already been secured in Waitrose.RHM Frozen has also realised the potential for similar products and in February it brought out a rival range of frozen French-style pastries.The company has developed a five-strong range, consisting of frozen packs of pain au chocolat, croissants, pecan Danish, cinnamon Danish and custard Danish morning goods in packs of four, five or six, to also manage the problem of products going stale.Alison Wright, head of marketing for frozen at RHM, says: "Interest in fresh morning goods has been heightened by the growth in coffee shops and in-store bakeries, driven by the appeal and aroma of fresh baking bread and pastries."HealthBetter-for-you sees off AtkinsWhile manufacturers are keen to stress that bread is a healthy product, the curse of the Atkins diet and its 'carbs are bad' ethos still resonates with many consumers. But for consumers who can't live without their daily bread, the higher fibre, better-for-you loaves provide the answer.Indeed, according to Warburtons' Bakery Review 2005, brown, grain and seeded loaves, that are shown to be healthier than the standard white loaf, are showing strong growth.Warburtons is performing very well in the healthy bread sector, although Sarah Miskell, category marketing controller, says that the company thinks long and hard before launching a new product and is keen to promote a healthy lifestyle rather than just cash in on the latest fad. Its Healthy Inside loaf, which contains a natural prebiotic to boost the friendly bacteria already inside our stomachs, is selling well, it says, and the standing of its low glycaemic index (GI) All in One loaf is about to be boosted by a relaunch that focuses on new research from Oxford Brookes University. Described as 'groundbreaking', the research has found that All in One helps appease children's appetites. New packaging that is being rolled out will feature the words 'Helps control kids' hunger'. The message will also be communicated in television and print advertising. Another branded bread that has a low GI is Burgen's Soya and Linseed, which manufacturer Allied Bakeries says is worth £7.6m and is growing 67% in value year-on-year. Jonathan Burr, director of customer marketing at Allied Bakeries, says: "With the growing interest in bread that has a general health benefit, Burgen is well-placed to add value and margin this year. It is currently one of the most popular and profitable bread brands within the sector, worth almost £9m in 2005. It showed growth of 56% (£3.2m) last year."The company recently launched a new line, Burgen Wholegrain and Cranberry, which Burr claims is successful in the aim of attracting new consumers to the healthier breads sector .Aside from low GI offerings, the big news in healthy bread at the moment is loaves with added Omega-3, the fatty acids proven to help prevent heart disease. Although the major players have yet to launch an Omega-3 loaf and instead have concentrated on developments such as lowering salt levels in their existing products, there are smaller players that have taken the plunge into functional foods. Sparky Brand, for instance, has in its own idiosyncratic fashion launched an Omega-3-rich wholemeal loaf. Branded with the name Ues Yuor Laof, the bread contains 10% of the recommended daily intake of Omega-3 in each slice and is being marketed by the company as a healthy, premium product. It is available in Selfridges Food Hall. Meanwhile, the specialist bakery Mantinga previewed its new Omega-3 bloomer loaf at the Food & Drink Expo 2006 held in March. The company said the move was part of its mission to be recognised as the UK's most innovative baker.But perhaps the first brand to bring Omega-3 to the masses will be Délifra
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