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Bread sales picture looking bright amid uncertainty - Baking Business

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If you were to snap a picture of a bread aisle in November and compare it to the same aisle in November 2019, things might not look too different. Yes, shoppers would be wearing masks, but the shelves wouldn’t show much change. Specialty bread would be occupying more space, and new varieties of gourmet-style loaves would stand out. What those still images wouldn’t capture would be the wild rollercoaster it’s been for bread during the intervening months.

Tim Grzebinski, client insights principal for dairy and bakery for IRI, said the strongest sales growth in essential food categories in 2020 was in bread products compared to other baked goods like cookies, crackers, snacks or pies and cakes.

“Consumers are still stockpiling fresh bread and rolls on the majority of their trips and are doing so much more than before COVID,” Mr. Grzebinski said. “Expect this trend to continue as we enter colder weather, holidays, election and the increase of COVID-19 cases.”

In March, when the coronavirus (COVID-19) pandemic hit the United States, dollars spent on grocery store trips increased 7%, according to IRI, as people stocked their pantries. Meanwhile, less frequent fill-in trips declined 2%. Take an even larger snapshot of this trend for bread purchasing, and the numbers jump dramatically. In the 52-weeks ending Oct. 4. 2020, pantry-stocking purchases of bread and rolls increased 32% compared to the same 52-week period in 2019. Meanwhile, shorter “fill-in” trips to purchase bread dropped 52%.

The spike in bread sales since March may be attributed to several factors. Mr. Grzebinski pointed out that many families have been struggling to pay rent or mortgages and have resorted to cheaper and more familiar food staples like traditional white pan bread. Also, children may be home all week for virtual learning, which has meant round-the-clock cooking to keep them fed. Bread’s status as a staple for so many meals, from breakfast toast to lunch sandwiches to after-school snacks, has put it center stage.

Bimbo Bakeries, the Rustik Oven

From white bread to better-for-you (BFY) specialty loaves, each segment has seen improved sales this year. Mr. Grzebinski predicted gourmet and artisan-style bread could thrive as the consumers who can afford more premium offerings may be focused on bringing the restaurant experience home.

Brioche, in particular, is experiencing rapid growth, according to Tom Vierhile, vice president of strategic insights, North America, for Innova Market Insights.

“Launches of new bread and bread products in the US featuring ‘brioche’ as a flavor or style expanded two-and-a-half times from 2018 to 2019,” Mr. Vierhile said. “Brioche’s fluffy texture seems to be something that is connecting with consumers.”

St. Pierre Groupe, Manchester, UK, is one brioche baker to benefit from this trend. According to Nielsen sales data, brioche sales in the United States grew 71% in the 52 weeks ending Sept. 1, and St. Pierre sold nearly 2 million loaves in that period.

“Authenticity and transparency continue to drive innovation across the food industry, including bread,” said Paul Baker, co-founder of St. Pierre Groupe. “Whether it’s a baguette, brioche or boule, consumers want a product that tastes authentic and is made with high-quality ingredients.”

Other forms of specialty bread like sourdough and artisan white bread loaves are also thriving. After more than a year in test marketing in California, Bimbo Bakeries USA (BBU), Horsham, Pa., rolled out The Rustik Oven signature artisan bread line nationwide. The Rustik Oven is available in three varieties — Sourdough, Artisan White, and Hearty Grains and Seeds. The bread is Non-GMO Project verified and made without any artificial colors or flavors. Produced with a sourdough starter, The Rustik Oven bread is baked slowly in a stone oven, ensuring even baking and allowing the loaf to develop a firm, golden crust. The sourdough variety ferments 24 hours before baking.

“Whether it’s a baguette, brioche or boule, consumers want a product that tastes authentic and is made with high-quality ingredients.”

Paul Baker, St. Pierre Groupe

“For so long, we heard our consumers’ feedback over the struggle of choosing between the superior quality of bread from their favorite local bakery and the longer shelf life and convenience of bread from a grocery store,” said Jessica Grane, marketing director for premium and artisan bread at BBU. “Thanks to our signature baking process, we’re proud to bring this unique offering to the artisan bread category and offer our fans the taste that they love in a more convenient way.”

As pandemic pantry stocking settles over the next year, look for the specialty bread segment to expand even more, at the expense of the white variety, predicted Dmitry Diment, research project manager, IBIS World.

“The primary driver for this change is shifting health trends, with consumers becoming increasingly health conscious,” Mr. Diment said.

Additionally, consumers are changing where and when they buy their bread. By concentrating on channels and target markets, bakers can be sure to seize the current sales boom.

Proofed for the new normal

While researchers are still analyzing the trend data from 2020 to provide a clearer picture of the full impact of COVID-19 on the bread market, key indicators show the pandemic has just accelerated preexisting trends.

“In addition to responding proactively to adapting health trends, bread producers have scrambled to keep up with America’s diverse and ever-changing palate,” Mr. Diment said. “By continually expanding their product portfolios with new bread varieties and flavors, successful operators have been able to attract new consumers while offsetting overall drops in demand for conventional baked goods.”

New product launches slowed in 2020 to accommodate surges in demand for traditional bread products. Innova Market Insights data showed that product launches through August 2020 for bread were less than half of what they were for all of 2019.

Bread Trends

“Bread is often used for lunches for kids and adults, and in this time of COVID-19, many children are not packing a lunch to eat at school because they may be attending school remotely, and the same applies to their parents,” Mr. Vierhile explained. “This is one factor that is likely to be depressing the new product numbers.”

Despite the slow grind of new product releases, certain claims touting nutrient and diet benefits are capturing a signification portion of the sales growth in 2020, Mr. Grzebinski said. And IRI studies show that consumers are doing more this year to take care of their physical and emotional health.

“In thinking about product messaging or innovation moving forward, 31% of consumers focus more on their health as result of the pandemic, and 22% are changing eating habits to be healthier,” Mr. Grzebinski said.

During COVID-19, IRI has tracked immunity offerings and has found that they are posting significant growth and are outpacing total store sales growth. Vitamins, supplements and other ingredients like zinc and echinacea are showing strong promise, Mr. Grzebinski added.

“I think the pandemic has only strengthened the bakery health and wellness and BFY trends as consumers are more focused on health and immunity than ever,” he said. “We know consumers are looking for retailers and manufacturers to help them boost health and specifically their immunity.”

Take a snapshot of the bread aisle in 2021, and it may look similar to 2020. But the path to get there will no doubt bring with it continued change as more brands migrate to the supermarket perimeter and healthy or specialty bread varieties populate more shelf space.

This article is an excerpt from the November 2020 issue of Baking & Snack. To read the entire feature on bread, click here.

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