Hovis Simple White

The Grocer understands the NPD – called Simple White – went into Booker and Tesco stores last week (rsp: £1.19/800g)


Hovis has launched a new value loaf called Simple White.

The Grocer understands the NPD rolled into Booker and Tesco stores last week with an rsp of £1.19/800g. That’s 21p less than its standard white Hovis loaf in Tesco. 

Hovis declined to comment on the launch. With the price of its standard loaf having increased almost 40% in the last year, including an average 20p hike this autumn, one theory is that the launch enables Hovis to close the widening price gap for shoppers switching to own-label bread, with the latest NielsenIQ data showing an acceleration in private label share gains from 2.8% in the last year to 4.3% in the latest four-week period. 

But a senior industry source said Simple White was more likely designed as a “price-fighting product” against other branded rivals. 

According to the source, Hovis had put through more aggressive price hikes than either Warburtons or ABF. A Warburtons medium sliced white loaf loaf currently costs £1.25, making it the cheapest of the three major branded players. ABF’s Kingsmill was also slightly cheaper in Tesco at £1.35. The latter was a particular cause for concern for Booker, whose competitors – including Medina Freshways in its capacity as a delivered wholesaler – are “predominantly Kingsmill customers”, explained the source.

It’s a well-known tactic for brands to introduce ‘budget’ versions of their brands to give shoppers a ‘trade down’ alternative. For example, Heck recently introduced a cheaper sausage range. It was a dangerous game to play given soaring costs facing the bakery sector, suggested another senior industry source. “Hovis must be under pressure if they’re prepared to sell a bread for 20p less” than standard loaves, the source suggested. 

The launch of a budget line also contrasts with the strategy at ABF, which has been pushing premium lines within the architecture of the Kingsmill brand. A duo of ‘luxury’ Kingsmill bloomers (rsp: £1.50) launched into Tesco and Asda in October to “include something a little bit special” in its range, after axing its Burgen range.

In August, Hovis reported that its profits fell 73% last year, while EBITDA was down from £13.8m to £3.7m as soaring costs hit margins.

It pointed to “significant” increases in ingredients and utilities costs, compounded by “changes in the dynamics of the supermarket grocery sector” and Covid-related challenges.

Hovis hired Jon Jenkins, the former CEO of Allied Bakeries (owners of Kingsmill), at the end of October, to replace Nish Kankiwala who left earlier this year.