Speciality breads inspiring UK market

Related tags Bread Marketing

Retailers and suppliers are increasingly turning to high quality,
speciality breads to try and jazz up Britain's dormant bread sector
and raise profits by inspiring consumers, writes Chris

Creative competition in premium own label bread has intensified in the last two months yet much of this innovation has focused on making established products and flavours more exciting and more profitable.

For example, Tesco recently launched a new range of burger baps topped with cheese, onion and mustard seeds, while Sainsbury's went for cheddar cheese and caramelised onion bread under its Tear & Share brand.

New speciality breads have also been tempered with the well-tried and tested Mediterranean staples; Sainsbury's introduced a roasted tomato and mozzarella Fougasse, the French version of Italian focaccia bread, and Asda brought out a sun dried tomato and basil bread topped with extra basil oil.

All of these products reflect the increasing reliance of the UK private label bread market on premium goods for growth. Leading baker Rank Hovis says annual sales in the UK bread retail market are worth £2.2 billion, but market analyst group Mintel​ predicts growth will be slow and steady as manufacturers look for profitable niches to balance out the large, mature sections of the market.

A number of these niches may be found in the premium speciality sector. Mintel says that a third of wrapped bread sales are from the premium category and own label is now the biggest collective brand in the speciality sector.

The UK's Federation of Bakers has also recognised the consumer trend towards speciality and value-added products and says this is a main reason why bread market value has risen by 13 per cent, about £130 million, over the last three years, while the traditional sliced and wrapped bread retail market has declined by around 1.5 per cent in volume during the same period.

Roz Cuschieri, marketing director at Warburtons, which has no private label production, thinks the trend towards premiumisation will get bigger in the next few years and can benefit both own-label and branded products.

"I see the UK bread market continuing to grow from a value perspective and as for what the bakery market has to offer, I think innovation will be critical,"​ she said.

Cuschieri also believes there is plenty more potential for new flavours and products in the premium speciality sector as "consumers are becoming far more comfortable with experimentation. If products fulfil a role, satisfy a need and are appropriately priced then consumers will buy them"​.

The problem for private label suppliers like Rank Hovis or Greencore will be how much money the multiple retailers actually pass on to them, considering the intense competition for low retail prices.

A 2003 report from Mintel says: "Manufacturers were concerned that the multiples' loss-leader policy downgraded the worth of bread inconsumers' eyes by prices which were below the cost of manufacture anddelivery."

The report adds that a number of retailers had made an economic decision to switch from cheap bread categories to premium and super premium production just to maintain profit margins in the face of rising raw material costs.

Related topics Ingredients

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