|Title:||United Kingdom retail sales of baked goods by category in pounds sterling, kilos, and percent change for the year ended February 20, 2011|
Start of full article - but without data
RELATED ARTICLE: TAKE-HOME SALES Bakery: XXw/e XX February 2011 VALUE VOLUME [pound sterling]m y-o-y% Kilos (m): y-o-y% Wrapped X,XXX -X.X X,XXX X.X Rolls XXX -X.X X,XXX -X.X Breakfast XXX X.X XXX X.X Freshly XXX -X.X XXX -X.X baked Tea break XXX X.X XXX -X.X Meal XXX X.X XXX XX accompanying Sandwith XXX X.X XXX X.X alternatives Chilled XXX X.X XXX X.X TOTAL X,XXX X.X X,XXX X.X
Although the volume of wrapped bread sold grew by X.X% in the year to February 2011, value sales fell back X.X%, representing a second consecutive year of decline. Against a backdrop of seemingly perpetual rises in wheat prices, which suppliers concede has heaped cost pressures on the sector, the fact bakers are selling more but earning less from bread should raise serious concerns over the future profitability of the market.
A continued decline in demand for white bread was partly responsible for the fall in sales, but perhaps even more to blame is a culture of promotional excess that is having a damaging effect on category value. Data from promotions tracker Assosia shows that each of the big four retailers increased the space allocated to bakery promotions versus overall space in the past year, while each of the three leading bread brands have increased their promotional activity in the year to February 2011. Indeed, it's telling that Kingsmill, the only leading bread brand to reduce its share of promotional spend, was one of the better-performing brands in terms of value sales.
Suppliers agree that there needs to be a more controlled approach to promotions across the category. "The industry needs to get back into a mindset of: how do we give people more reasons to buy wrapped bread," says Warburtons marketing director Richard Hayes. "The risk is that short-term thinking prompts some people to say we'll chase the deal junkies, but in doing so they decimate the value of their brand in the long term."
By reaching for the promotional gun, brands use money that could otherwise be invested in communicating the credentials of bread as a great value product. Communication seems to have taken a back seat in the past year, however. The year to XX February 2011 saw the top io advertisers spend just [pounds sterling]XXm between them (see page XX), but they appear to have rethought this low-key approach, ramping up their ad spend for 2011 in an attempt to reignite value sales growth. Warburtons ([pounds sterling]Xm), Kingsmill ([pounds sterling]X.Xm) and Hovis ([pounds sterling]X.Xm year to date) have all set out their stall to spend big this year, with Warburtons and Hovis already having run major TV advertising campaigns. "We genuinely believe that the continuity in advertising investment at cut-through levels grows the category," says Hayes.
Hovis' current [pounds sterling]X.Xm TV campaign (see pXX) champions the XXX% 'British Wheat' claim on its Soft White range in a clear signal that although sales may be faltering, white bread continues to account for over Xo% of bread sales, and brands still consider it the juggernaut of the bread category. "White is a crucial part of the market, and Hovis' role as a key brand is to invigorate the white category with innovation," says Caroline Jary, head of marketing at Hovis. "Our campaign around British wheat brings new news to the category."
The decline of white bread is partly a result of its relatively poor health credentials but also the upshot of a raft of NPD in wrapped bread which, although it may not have grown the overall category, has widened consumers' repertoires.
Earlier this year, Kingsmill launched a brand new trio of seeded breads to satisfy a growing demand in the 'bread with bits' segment, which Guy Shepherd, category director of brand owner Allied Bakeries, says "continues to be driven by a rising consumer concern about healthy eating and nutritional value when choosing which products to purchase".
Hovis, meanwhile, says its Hearty Oats, launched last year, has been a "great success", although category controller Ian Harris adds that the boom in launches in the bread with bits sub-category has seen the sector become over-ranged, with only XX% of all lines being stocked.
As healthy sliced loaves are increasing in number, alternatives to wrapped bread are also proliferating, with the major brand owners looking to get a piece of the action in an area traditionally dominated by own label. Warburtons has launched new ranges of wraps, pitta breads, flatbreads and rolls, made possible by a Eiorn investment in new production equipment, while Kingsmill is rolling out a new sandwich-alternatives range now (see right).
Consumers are happy to extend their repertoier at the expense of the standard sliced loaf, it appears. The proliferation of healthy wrapped breads and sandwich alternatives has arguably also been to the detriment of in-store bakeries, where sales of freshly backed bread have fallen by X.X% in value and X.X% in volume to eXm [Kantar]. Delifrance commercial controller Alain Moutter believes that in-store bakery bread needs to move away from a price-and volume-led focus, to offer something different from wrapped bread. "In-store bakery purchasw drivers are based more on quality, indulgence and sensory appeal, For the ISB bread market to strengthen, retailer focus must concentrate on the products that reflect these values and are differentiated from English tinned loaves."
Sainsbury's is the only one of the big four retailers to have grown its share of bakery sales in the past year and Kim Brown, category manager for bakery, says its in-store bakery sales have also bucked the downward market trend. "We have followed the same steps as the rest of bakery, reviewing the offers and range in-store, but the real driver of difference versus our competition has been the growing support structure behind it," she says, alluding to the opening last year of Sainsbury's bakery college. Launched in partnership with flour supplier Whitworth and based on site at one of Whitworth's bakeries, the college has already trained more than XXX Sainsbury's employees.
Supermarket ISBs came under fire in the press recently following accusations that they buy in frozen bread and reheat it in-store. Stephen Clifford, marketing controller of Brakes subsidiary Country Choice, says the practice, known as part-baked, is a legitimate one, but goes on to say that one of the reasons ISB in multiple retail channels is suffering is because too great a focus is being put on price.
The star-performing freshly baked subcategory for Country Choice, according to Clifford, is breakfast, a trend reflected across the bakery sector. The sub-category, which includes products such as crumpets, croissants and pastries, grew X.X% in value to [pounds sterling]XXXm on the back of strong NPD and a growing trend for breakfast on-the-go. Moutter says morning goods provide "a low-cost, indulgent treating opportunity" while Jacqui Passmore, marketing manager at bakery supplies company Dawn Foods, adds that "flavour combinations and textures are becoming more exciting as consumers become more adventurous".
The big brand owners have understandably been looking to muscle in on this high growth area. Last year, Warburtons launched Toasting Muffins and threw considerable weight behind its crumpet portfolio. The Hovis range of pancakes, crumpets, muffins and tea cakes has recently been backed by a joint promotion with electrical appliance retailer Russell Hobbs, while Kingsmill says its snacks range--which includes crumpets, muffins and pancakes--continues to perform well.
Warburtons' Hayes says businesses are having to make choices about where they bring most value to their customers and in doing so add value to the bakery category. "At the moment, we're finding we can do that most effectively and fastest in these consumer-driven growth areas such as wraps and breakfast," he says.
However, don't think Warburtons, or any other baker, will be giving up on traditional wrapped bread any time soon. After all, as Hayes points out, "it's still the money engine" of the bakery category.
"While white bread sales may be faltering, brands still consider it the juggernaut of the bread category"
"For the ISB bread market to sterngthen, retailer focus must be on quality, indulgence and sensory appeal"
RELATED ARTICLE: TOP XX BESTSELLERS Bakery: XXw/e XX February 2011
Warburtons XXX.X -X.X Hovis XXX.X -X.X Kingsmill XXX.X -X.X Own label XXX.X -XX.X Braces XX.X -XX.X Roberts Bakery XX.X -XX.X Warburtons WeightWatchers XX.X -X.X Allinson XX.X -X.X Burgen XX.X -X.X Genius X.X XXX.X
* Although the volume of wrapped bread sold is in growth, high levels of promotion are sapping value out of the market. Through the recession we learnt that buyers migrated towards using more bread for sandwiches in lunchboxes, and this may help to explain the increase in volume sold.
* Sales of in-store bakery bread declined by fXm in 2010, while sales of plant bread grew by fXm in the same period.
* Multibuy and x-for-y promotional mechanics have been helping drive this volume growth.
* Cheaper branded loaves have pushed out the own-label alternatives, due partly to the deep promotions that the sector has seen in the past year.
* White bread (the biggest chunk of the wrapped bread market) has seen a decline over the past year while brown and other sectors, such as seeded, are recording growth.
RELATED ARTICLE: TAKE-HOME SALES Bakery: XXw/e XX February 2011
VALUE VOLUME [pound sterling]m y-o-y% Kilos (m): y-o-y% Wrapped X,XXX -X.X X,XXX X.X Rolls XXX -X.X X,XXX -X.X Breakfast XXX X.X XXX X.X Freshly XXX -X.X XXX -X.X baked Tea break XXX X.X XXX -X.X Meal XXX X.X XXX XX accompanying ...