Bread has long been a staple of the British diet, yet its popularity has been dented by the trend for low-carbohydrate diets such as Atkins. But large-scale bakery brands are fighting back with new and improved products, formulated to address the public’s growing concerns about obesity and healthy eating.
Next month, RHM Bread Bakeries’ Hovis brand is reformulating its entire range, using wholegrain wheat instead of red wheat, in a bid to make its products healthier. RHM is investing &£10m to support the change, introducing a heart-shaped logo and the strapline “Healthiest Ever Hovis” (MW last week).
The move builds on other developments in the market, such as the growth of healthier white loaves, aimed at families, and seeded ranges. Other leading brands, Allied Bakeries’ Kingsmill and family-run Warburtons, have been active in these areas too. There has also been innovation with products such as Warburtons Toastie, especially for toasting, and new packaging.
The influence of Atkins and other low-carbohydrate diets, and associated media coverage of the negative affects of carbohydrates, now appear to be on the wane. And the bread market, in steady decline since the Second World War, looks to have turned a corner. According to the latest figures from the Federation of Bakers, last year volume sales of bread increased by 0.2 per cent, compared to a 1.8 per cent fall in 2003.
Despite a long-term volume decline, the sector has experienced growth in value sales, which in 2004 reached &£2bn for the first time. The rise has been driven by general demand for higher-quality products, for which consumers are prepared to pay a premium.
The “up-grading” of the bread market is part of a longer-term shift according to DDB London strategy director Vicky Holgate, who works across the RHM Bread Bakeries brands, which also include Nimble and Mother’s Pride. She says: “This change has been driven by consumers trading up to better-quality breads. People used to have home-made bread but dumped it for white sliced loaves and, now again, they want products that appear to be home-baked.”
The rise in popularity of premium breads is driven by branded manufacturers, forced to defend themselves against the might of own-label brands and the commoditisation of the standard sliced white loaf. Bartle Bogle Hegarty business development director Richard Exon, account director for Warburtons, believes that the ability of the major brands to meet consumer demand with different ranges and varieties has been key to their recent success.
He explains: “People want a broader range of products: there used to be just white and brown, but now there are seeded loaves and fruit loaves; a lot of strong innovation is coming from the brands.”
However, the rise of new varieties is taking its toll on traditional segments, such as white, brown, wholemeal and granary. Volume sales in each of these categories declined over the four years to August 2004: white bread dropped by 9.4 per cent, brown fell by 16.9 per cent and wholemeal and granary each experienced smaller declines of 0.3 per cent (Mintel). By contrast, sales of Italian and French breads have risen by 58 per cent and 39 per cent respectively.
Yet, the shift towards premium products has helped the white bread segment to increase in value by two per cent over the past two years. The latest figures from the Federation of Bakers show a renewed interest in brown and wholemeal breads, with volume sales up by ten per cent last year.
A resurgence in the fortunes of branded bakers and wrapped and sliced bread has led to declining sales at supermarket bakeries and high street craft bakers, which find it hard to compete on price. Craft bakers have seen sales fall by 20 per cent since 2000.
Branded breads have raised their game, but there are doubts about how much brand loyalty there is in the market. Holgate believes bread is a repertoire market, led by price, but maintains there are degrees of brand loyalty: “We would argue that consumers have strong beliefs about the bread market, because when you look at the increase in what they spend, it suggests that there are wider issues at play than just price.”
Although low-carbohydrate diets are going out of fashion, the Glycemic Index Diet, originally devised for diabetics , is now growing in popularity. But Allied Bakeries marketing director Jo Sykes does not see this as being a bad thing: “The GI Diet is much more about a healthy lifestyle, which bread can be part of.”
Sykes points out that consumer requirements are changing, a fact manufacturers need to recognise. She predicts continued growth in the healthy segment, in indulgent and premium breads and niche products, such as loaves with functional benefits like Burgen’s Soya and Linseed loaf, which has benefits for older women.
Bread maybe back on the menu for now, but changing dietary habits have shown that manufacturers must pay heed to shifting tastes and focus on premium products if they are to claim a bigger slice of the action.