Grain-based products must diversify into adjacent, growing categories – particularly those in decline like bread, baking mixes and breakfast cereal, says the head of consumer insights at Ardent Mills.
Use of wheat across the US remained stable in 2013 with per capita annual consumption at 134.7 pounds, according to data from the Economic Research Service (ERS) of the US Department of Agriculture (USDA). The stabilization followed a decade of sharp declines in per capita wheat consumption between 1998 and 2008.
Speaking to BakeryandSnacks.com, David Sheluga, director of commercial insights for marketing at Ardent Mills, said the leveling off of wheat consumption was promising for industry, but a closer look revealed it didn’t spell promise for every category.
The grain giant conducted extensive research spanning the US grain-based category, and based on the overall weight in pounds of product sold in grocery stores, Sheluga had identified growing and declining categories.
He noted that while the overall product weight incorporated other ingredients, it remained indicative of what wheat-based products were in growth versus those in decline.
Growing: Indulgence, convenience and ethnic
Over the last five years, three categories had displayed growth, he said. By product weight, these three categories were up 750m pounds.
. ‘Sweets and snacks’ - waffles, donuts and cupcakes
. ‘Super convenient’ - frozen handheld sandwiches, breakfast options and toaster pastries
. ‘Ethnic’ - pita, naan, tortillas and bagel thins
Declining: Staples, baking, side dishes and old-fashioned
However, there were four segments that declined between 2009 and 2013. By product weight, these four segments dropped 1.2bn pounds.
. ‘Household staples’ – fresh bread, hamburger/hotdog buns, bagels and breakfast cereal
. ‘Baking products’ – baking mixes, frozen dough and flour
. ‘Side dishes and family fare’ – refrigerated pizza crust, boxed side dishes and canned pastas
. ‘Old-fashioned favorites’ – pretzels, pies, pastries, sweet cakes and ice cream cones
Manufacturers must diversify to balance their portfolio
“It’s tough to find opportunities in those areas that are down. But these declines are just more reflective of the broad shifts in the American demographics and household behaviors,” Sheluga said.
“What we’re seeing here, is evidence of the macro trends and change in America demographics and eating patterns.”
He said manufacturers had to step up to drive growth in the grain-based category and must invest in mid- to long-term strategies over the next five to ten years. Particularly in segments like ‘ethnic’, there were opportunities to develop Asian- and Hispanic-inspired grain-based products, he said.
“This is a time for food companies to diversify to balance their portfolio; much the same way as we as individuals would balance our investments in stocks and bonds in order to get the best return depending on which large group is growing.”