Chris Brocknman, food and drink manager at Mintel, said Tesco’s decision last week to delist Allied Bakery Foods’ (ABF) Kingsmill bread from supermarket shelves could be the tip of the iceberg if prepacked loaves continue to fall out of favor.
“Consumption of prepacked sliced bread in particular has been in long-term decline for some time as consumers trade-up to higher value products, but 2014 was a particularly bad year. This resulted in supermarkets changing their strategies and focusing more on valued-added free-from products.
“If this downward trend continues there could be more pressure on other brands,” he told BakeryandSnacks.com.
Drive for innovation
In value terms, UK prepacked bread sales fell by 5.6% last year, with white bread down 7% as a result of rising input costs and increasing competition from alternatives, such as bagels and wraps, according to Brockman.
In addition, the number of consumers eating packaged sliced bread in the UK also fell, by 5%, with specialty and quality breads the main growth category, he said.
“Most major manufacturers are already focused on innovative products and are leaving stagnant markets behind. There is a definite drive towards faster growing categories.”
Kingsmill was the UK’s best-performing brand in 2014, according to Mintel data, with value share up 4% to 23% (behind Warburton’s 35% and ahead of Hovis’ 20% share (down by 4%), however ABF admits 2014 was a challenging year with all major brands loosing value share.
“There was significant value depreciation in the bread market last year as manufacturers dropped prices to remain competitive and all brands suffered a loss in value share as a consequence.
“Over £150 million ($224m) has been removed from the market as retailers have competed to offer the best possible value for their shoppers,” said a spokesperson.
She added that ABF intends to focus its future investments in wraps, crumpets, muffins, waffles, potato scones and pancakes, as well as on Allison and Burgen bread.