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Bread And Bakery Products 2007
Key Note Publications Ltd, March 2007
The bread and bakery products market had a relatively good year during 2006. There was a higher rate of increase in total retail sales than there was in any of the 4 previous years (2002 to 2005), with sales rising by 3.1% in 2006 to £3.27bn.
As in previous years, the bakery industry has worked hard in its attempts to expand the bread market by means of new product development (NPD), particularly in the area of premium branded products.
The continual consumer interest in healthy eating has also helped market growth. In addition, the threat from the short-lived `Atkins craze' has receded. Most people are now happy to carry on consuming carbohydrates as part of a balanced diet.
White bread, which has always been the largest subsector within the total market for traditional bread, has been less well positioned than brown and wholemeal bread to take advantage of the new focus on healthy eating. The sector particularly suffered from the recent trend for low-carbohydrate diets; the sector's performance during 2005 reflected this to an extent.
The brown/wholemeal sector has seen a resurgence in recent years. 2006 was no exception, as the sector continued to perform well.
The ethnic and speciality breads sector now shows all the characteristics of a mature market, with sales growing only slowly during both 2005 and 2006.
Although bakery products remain the largest individual sector — with overall sales slightly higher than those for white bread — it has also exhibited slower growth. This is a clear sign that the market has matured.
There were some major corporate developments during 2006, most notably the sale of RHM to Premier Foods and the announcement of the sale of Fletchers Bakeries by Northern Foods. These developments will undoubtedly have repercussions during the coming years, including plant closures and job losses. Conversely, there might well be increased NPD as a result of these changes, which is likely to be emulated by other major bread brands.
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