Over the past few decades Brits have been eating less and less bread. It’s a situation bakers are determined to turn around, reports Chloe Ryan. But will they succeed?

Bread manufacturers are struggling with a dilemma how to encourage consumers to eat more of the stuff. Virtually all UK households 99.8% buy bread each week but the amount Brits eat has been steadily falling.

Volume sales of pre-packed bread fell 2.4% last year [IRI 52w/e 20 February] a decline that is, according to Hovis marketing director Jon Goldstone, in line with a 30-year downward trend in consumption.

And, while commodity price hikes played a big part in pushing category value up 15.9% year-on-year to February 2009, the subsequent 12 months have brought a 0.6% decline in value to £1.8bn [IRI] as wheat prices have stabilised.

No wonder the big bread brands have ventured into the wider bakery sector. Warburtons launched snacks range SnackaDoodle in March and Hovis upped the stakes in an already-buoyant morning goods category (see over) with a range of branded crumpets, teacakes and pancakes launched last October.

But will such moves succeed in growing the bakery category, or simply result in brands stealing share from each another?

It's not hard to see why leading bread brands are attempting to diversify. The top 10 products have experienced very different fortunes over the past year, some resuming growth after a period of decline while others have almost become victims of their own success in the brand-dominated sub-category. Value sales of Hovis's white bread have risen by 28% and its brown by 11.7% but Warburtons, the UK's top selling brand, suffered a 0.8% decline in sales of white and a 3.8% fall in brown [IRI].

Hovis is one of the few major players to have increased sales of white bread thanks chiefly to a packaging and recipe revamp in 2008, prior to which sales were declining steeply. Although the recession brought with it a desire for comfort foods that drove buyers back to white bread making it the fastest-growing segment of the market in the year to February 2009 it has been a different story over the past 12 months.

Sales of white bread have generally faltered, with own label white hit especially hard, falling 19.6% in value and 24% in volume.

Meanwhile sales of Hovis and Kingsmill brown bread have picked up, and sales of Kingsmill's healthier 50/50 white bread has enjoyed a 15% rise [IRI].

"Category research highlights a growing demand for healthier food options," says Kingsmill marketing controller Michael Harris. "Twenty-two per cent of food choices are made with health benefits front of mind," he adds.

According to Goldstone, bread with added bits such as seeds and grains is now the fastest-growing sector. Sales of Hovis's 'Bread with Bits' products, have grown 7.8% over the past year to £68.8m, while sales of own-label bread with bits rose 4.7% to £56.9m [IRI].

Hovis is hoping to encourage more Brits to reach for the bread bin at breakfast by promoting the health benefits of wholemeal. In January, the company signed up Olympic gold medal-winning cyclist Victoria Pendleton to front the Wholegrain Challenge campaign, which encouraged consumers to switch their usual breakfast for wholemeal bread.

Kingsmill is adopting a similar approach with its Wake up to Wholegrain campaign, designed, according to Harris, to "reclaim bread's position at the weekday family breakfast table".

The campaign began in 2009 and hit TV screens again in January this year to promote Kingsmill 50/50. Harris says sales of its Tasty Wholegrain and 50/50 brands have been boosted by the push, with sales up 31% and 21% respectively in the six months to 20 February.

Kingsmill and Hovis are also attempting to capitalise on the current interest in the health benefits of oats. Kingsmill launched its Oatilicious loaf in January and Hovis followed with Hearty Oats in April, again designed to tap into the breakfast market.

Provenance looked set to become another key selling point after the announcement by Hovis in November that it would switch to using 100% British wheat in its bread.

But the jury is out on the potency of provenance as a message and the practicality of making the switch to 100% British in the wake of Warburtons' decision to scrap its plans to produce a loaf made from British wheat. Warburtons claims there is a lack of demand and will continue its long-term supply arrangements with Canadian and British farmers.

"When you look at the top reasons why consumers buy each brand, quality is the top reason, followed by taste, texture then value for money," says Warburtons category director Martin Garlick.

Warburtons has arguably paid the price for advertising and promoting less heavily than its rivals, but it is hoping its recent raft of NPD will improve its fortunes. The brand was the first to launch a 600g loaf last year when legislation changed to allow bread to be sold in any weight. Kingsmill also took advantage of the new rules, with the launch of its 525g Little Big Loaf.

Warburtons has also launched brand extensions to its Farmhouse range and has moved into new areas of the bread market by offering an unsliced tiger loaf.

But by far its most surprising move has been the launch of bagged snacks, which Garlick insists is not an indicator that there is no room for growth in standard bread. "It felt appropriate to take our baking credentials into another area," he says. "Snacks is a huge market. It is a natural move for us."

He reveals the company is looking at other categories adjacent to bakery, although he refuses to say what form brand extensions might take.

Goldstone is sceptical, and insists Hovis would never stray from its core area. "I wish them luck, but it's a tough category and I'm not sure I hold out much hope," he says of the move into snacks.

Morning goods
While by no means as radical as Warburtons' launch, brands have also been busy in the morning goods sub-sector, which is dominated by own-label and in-store bakeries and is a sector where brands are confident they can grow their share.

"Own label accounts for just 15% in bread, but represents over 72% of other bakery goods," says Goldstone, adding that this presents a great opportunity for brands.

Hovis already produced own-label morning goods for the retailers but moved into branded products in October to try and increase its market share, which was less than 2%. It now supplies branded muffins, crumpets, teacakes and pancakes to Tesco and Asda. "We now have a 15% share in each of those segments in Tesco and Asda," says Goldstone.

Warburtons has had a mixed year with its branded morning goods. Sales of pancakes, potato cakes, soda farls, croissants and pastries have declined and consumers are showing more interest in basics such as muffins and crumpets.

"We have built a new crumpet plant at our bakery in Burnley to keep up with demand," says Garlick. "Fifteen years ago crumpets were a seasonal line we produced three months of the year. Now we make them week in, week out."

Based on the success of its crumpets, Warburtons launched branded muffins in January and initial sales are strong, claims Garlick. Warburtons has also conducted research with retailers on how to boost impulse sales and is working with promotions analysts Accuris.

One area that could be key to growing category value, claim suppliers, is in-store bakery. It accounts for about 30% of the bakery market, but many retailers are making efforts to improve their offer. Asda last year overhauled its in-store bakeries by introducing more speciality breads, including sourdough made from a mother dough imported from San Francisco.

Speciality breads are the main growth driver in this area, says Claire Warren, brand manager at Bakehouse, which supplies ready-to-bake products. "This is driven by products such as rye bread, which, with a sales value of more than £5m and value growth at 24.4%, is essential to the speciality breads segment."

Stephen Clifford, marketing controller of Country Choice, agrees: "Treating yourself to a rustic roll or ciabatta loaf is not expensive."

Sainsbury's says the in-store bakery is crucial to the ambience of the store because of the delicious aromas it pumps out. A spokesman says doughnuts, cookies and pastries are among its bestselling bakery products, thanks to being freshly baked and the number of promotions offered.

Sainsbury's has switched all its in-store bakery products to 100% British wheat, a process it completed last July. "It is one of the innovations we are most proud of," says a spokesman.

"When we started the project we were told it couldn't be done, since the belief was that the quality could not be achieved through the use of only British flour. However, through working with our farmers and millers we have been able to deliver a 100%-British range of scratch-made breads, rolls and doughnuts."

There is no doubt enormous effort is going into developing this category. Manufacturers and retailers will now be hoping the hard work pays off.

Focus On Bakery