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Viewing report
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Bread Bakers Market Report
Key Note Publications Ltd, Jan 1999
The market for bread and bakery products is mature and saturated. This, combined with the fact that bread, as a staple item in the UK diet, is facing competition from other types of food, means that manufacturers and retailers within the sector have been finding life difficult for some time. In addition, the fierce price-cutting which has undermined the sector for much of the 1990s has had a detrimental effect on the whole market, with price increases by plant bakers (the second since 1996/1997) having done little to aid the situation. The industry is responding to both these challenges by constant new product development (NPD) and rationalisation.
The total market for bread and bakery snacks consumed at home was worth an estimated £2.83bn in 1999, an increase of less than 1% on the 1998 figure. This is indicative of the fact that products within the sector have become less important to UK consumers as eating habits have become more varied and adventurous, and also reflects the discounting by retailers which continues to affect the market.
1999 has seen a continuation of the trend away from standard sliced and unsliced loaves, and towards speciality breads and bakery snacks. Sales of the latter, with an estimated value of £898m in 1999, now match those of white bread (£895m). Speciality and other breads are also gaining ground fast, with sales having increased from £606m in 1998 to an estimated £640m in 1999.
Although the popularity of white bread over brown and wholemeal varieties has strengthened over the past few years, the discounting activity which has affected standard loaves has spread to the premium sector, with a consequent effect on market value. Sales of brown and wholemeal bread have continued to decline, mainly because of consumer tastes, with white bread proving consistently more popular among most consumer groups, and especially among men and young people, who tend to be the heaviest users of bread.
The bakery snacks sector has been one of the fastest-growing in recent years, due mainly to lifestyle factors and NPD. Bread rolls account for just over half the sector, with products such as crumpets, muffins and pancakes making up the remainder.
The rise of in-store bakeries (ISBs) and bake-off units has been important in the growth of the speciality breads sector, as has the widespread adoption of more sophisticated eating habits.
The bread market is forecast to rise by just 5.6% over the 5-year period from 2000 to 2004, reaching £3.03bn.
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