The number two brand had a great year, while top player Warburtons and number three Kingsmill struggled with flat sales

Warburtons’ consistently strong sales have seen it establish an apparently unassailable lead over its rivals, but the slowburn effects of a blockbuster marketing campaign and a flurry of NPD – culminating in the recent all-British ingredient guarantee – has ignited sales of arch rival Hovis.

It wasn’t just the ad, of course. Consumers were enticed by strong promotions and improved quality, claims marketing director Jon Goldstone. 

“We now have consistent quality, which we didn’t have before, and are offering better value. At the end of 2007 we were selling at a 12% premium to the market, but now are at 4% to 5% as a result of our long-term promotions, primarily shallow multibuy deals.”

Hovis’s resurgence – sales grew just 1.9% in 2008 despite the credit crunch and wheat price rises prompting overall bread sales to leap 16.2% in 2008 – has come as the market showed signs of settling down. 

“The bread market spiked in 2008,” says Goldstone. “Volume grew as people cut back and bought more staples and value grew because the wheat crop in 2008 was so poor that price hikes were necessary to cover inflation. This year the market has re-based itself to 2007’s pre-recession levels.”   

The drop in volumes will require suppliers to maintain a busy innovation programme, claims Goldstone, and he cites Hovis’s switch from January to using 100%-British wheat as an example.

Unless Hovis fails to deliver on the promise, or Warburtons brings forward its plans, the Bolton-based baker will lose out in the race to produce the exclusively British bread, as its two Seed to Crumb loaves are not set to hit shelves until February. Warburtons has seen sales growth slow following the previous year’s 22.1% increase but it has grown volume share in five of the 10 regions, says customer category manager Caroline Kellett, and the  opening of its £45m Bristol factory in July is expected to increase distribution across Hovis-dominated south west England, while new arrivals are also expected in its 600g range.

It was a similar story for Kingsmill, which last year was celebrating a 24.8% growth but is now up just 0.4%. Chief executive Mark Fairweather has high hopes for the brand’s new Little Big Loaf.

As a result of promotions, brands have stolen share from own label, says Asda bread buyer Chris Bates. “We have rationalised our own-label breads because people have switched from own label to brands they know.”

Top launch: Kingsmill Little Big Loaf, ABF
Just because shoppers want a smaller loaf of bread doesn’t mean they should have to make do with smaller slices. Hence the launch of the Little Big Loaf, a smaller 525g loaf containing slices the size and thickness of those in a regular 800g one.

We also like the fact the loaf is packaged to stand upright on the supermarket bread fixture, looming large over the smaller slices of Hovis and Warburtons’ 400g efforts.

Top Products Survey 2009