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Bread On the Rise

This category continues to grow, but manufacturers could see further gains by expanding product uses and leveraging social media.

by Eva Meszaros

The author Miguel de Cervantes once wrote, “All sorrows are less with bread.” Such is the case with this omnipresent food: Despite already being a staple in 99 percent of households in the U.S., the retail bread market reached a new high in 2011 with total sales of $21.6 billion. The economic downturn in recent years had minimal impact; in fact, some households show increased bread intake while cutting back on eating out.

Mintel defines the bread category to include: fresh loaf bread, including white, brown and whole grain (sliced/unsliced, wrapped/unwrapped); fresh rolls, buns and croissants; tortillas, taco shells and tostadas; fresh bagels, bialys and English muffins; and refrigerated or frozen bread, bagels/bialys and English muffins. Excluded are baked goods, such as muffins and scones, and home baking products, such as flour yeast, as well as bread mixes and cakes.

The Market: Key Points

• Growth in 2010–2011 was a modest 1 percent with inflation but the first year of (inflation-adjusted) growth in three years, with FDMx (food, drug, mass merchant excluding Walmart) sales of $12.8 billion accounting for nearly 60 percent of total sales. Mintel forecasts gains to continue through 2016, expecting the total market to reach $26.3 billion (and $14.8 billion for FDMx).

• Market drivers include the new USDA food plate, unveiled in June 2011, which encourages whole-grain consumption; the restaurant industry’s continued decline, making way for more at-home eating; and the steep 8.6 percent price hike of bread from the previous year due to lower crop yields.

• Challenges include developing new usage occasions among existing consumers, rather than attracting new shoppers. Competition within segments comes in the form of private-label brands, which command an increasingly sizeable market share, and in-store bakeries, which have the benefit of freshness.

• The period of 2006–2011 saw nearly 2,600 bread product launches, according to Mintel’s Global New Products Database (GNPD). Most of these new products have better-for-you attributes (e.g., whole grain, lower trans fat content, kosher), and store brands are increasing innovations.

• Bread brands could benefit from increased social-media presence via Facebook and Twitter, which most currently lack. Arnold/Oroweat has more than 90,000 likes on Facebook for one of its products, showing great potential for other brands to market to today’s tech-savvy consumer.

FDMx Sales of Bread by Segment, 2009–2011 | Source: Mintel/Based on SymphonyIRI Group Infoscan Reviews

Loaf bread leads in sales with 52.4 percent market share, but the rolls, buns and croissants segment leads in growth at 8.2 percent, making it the secondlargest segment. However, its growth continues to slow, and Mintel forecasts this segment won’t perform as well over the next six years. Refrigerated/frozen, the smallest segment, shrank a slight 1.1 percent in 2011. Whole-wheat bread is the most popular variety, followed by white and multigrain.

The Consumer: Key Points

• The universal popularity of bread cuts across all ages, income levels and race/ethnicity. Specific buying habits vary: those ages 18–24 and lower-income households are most likely to buy based on price over nutrition; affluent buyers (earning $75K+) are the most willing to try new breads and stock several types at home.

• Fresh loaf bread accounts for the largest usages among consumers. Whole wheat is the most popular type of bread, followed by white and multigrain, indicating consumer interest in healthier options.

• Bread texture, value, bread that kids like and favored household brands matter most to shoppers, according to Mintel’s consumer survey. Whole wheat, whole grain and high fiber are the most important health attributes/claims.

• The majority of respondents (62 percent) indicate a willingness to try new bread, including products from other cultures or locations. Slightly more than half of shoppers say they are buying better-quality bread than in the past. Price and nutritional content are of equal concern to the majority of shoppers.

Household Bread Usage by Age, February 2010–March 2011
Base: adults age 18+ whose household eats bread
Source: Mintel/Experian Simmons NCS/NHCS Winter 2011 Adult Full Year—POP

Bread usage is highest among 18- to 24-year-olds for the majority of varieties. In particular, white bread usage skews toward younger respondents and peaks among those 18–24. This age group is also willing to embrace new varieties (such as potato and pita) more than other age groups. Rye/pumpernickel usage is highest among older consumers (ages 65 and up), reinforcing the importance of connecting with younger shoppers to attain lifelong loyalty.

Recent Product Introductions

Trader Joe’s Sprouted Whole Wheat Fiber Bread: Lowfat and made from organic sprouted whole-wheat berries, dates and raisins; touted as fiber rich and suitable for vegans.

Fresh & Easy Mini Croissants: From Fresh & Easy Neighborhood Market; can be heated in a conventional oven; free from artificial flavors, colors and preservatives.

Tasty Bakery Garlic & Herb Butter Flatbread: From Brookshire Grocery with other varieties available; made with hand-stretched, olive-oil–enriched dough.

Stonefire Tandoori Naan Flatbread: Manufacturer emphasizes regional tastes and traditional methods; free from trans fat, synthetic dyes, preservatives and hydrogenated oils.

Editor’s Note: Specialty Food Magazine is pleased to be working with Mintel on Research Spotlight. Mintel is a leading supplier of competitive media, product and consumer data. A 33-year reputation for delivering dependable and original market information has allowed Mintel to maintain Business Superbrand status in the U.K. Mintel’s product line includes: Mintel Reports, a renowned market intelligence report series, publishing more than 600 reports annually covering the U.S. and Europe; and Mintel’s GNPD, the Global New Products Database, which monitors worldwide product innovation in consumer packaged goods markets. For more information call 312.943.5250 or visit www.mintel.com. NASFT members may purchase Mintel’s bread report at a 10 percent discount.

Eva Meszaros is associate editor of Specialty Food Magazine.