Baking has been on the airwaves and top of the ratings of late. TV shows like ‘The Great British Bake Off’ are hugely popular and have influenced a return to home baking. One consequence is that ingredients’ sales have gone up. Likewise because there are many who do not bake from scratch, sales of pre-prepared ingredients such as frozen ready to roll pastry have increased.
However the Mintel report Home Baking – UK – July 2014 indicates a slow down. Value sales in the home baking market increased by just 2% year on year (YOY) in 2013, with 2014 expected to have an decline of 2% to GBP1.8bn. This downturn relates to both a marked improvement in consumer confidence and concerns regarding health – the latter influenced by the high-profile sugar debate, states the report.
Mintel asserts that the value of the market will edge up by 7% over the period 2014-19 to GBP1.9bn, due mainly rising prices. The recession kick-started the revival in home baking, as people went out less and took up more home-based leisure activities to save money. Now in an economic recovery consumers are expected to spend and go out more reducing free time for baking. Mintel report Bread, Bakery and Cakes April 2014 on the German market shows that in 2013, more than one third of German adults revealed that they preferred to bake their own cakes at home instead of buying them, giving an indication for the strong uplift in interest in baking. In particular, a young generation of Germans seem to have rediscovered the art of home baking, with 43% of respondents in the 16 and 24 year old age group.
The number of new products in the baking category has nearly doubled between 2011 and 2013, as both retailers and manufacturers expanded their baking ranges to capitalize on the growing enthusiasm for baking. German Amazon has a selection of over 2,500 books dedicated to baking, and almost 100 new books alone were published between January and March this year. BBC’s ‘The British Bake Off’ has been licensed to more than a dozen countries outside the UK, including Germany, where it is featured under the name ‘Das große Backen’. The report states that home baking is rising across many European countries, for its comforting nurturing nature, and as a low-cost hobby.
Frozen Bakery
This is all good news for the bakery sector but it is difficult to determine exactly what its impact is on sales from the frozen food cabinet. Anecdotal evidence suggests there is a knock on effect.
“We know that home baking has been doing very very well. Ingredients such as frozen pastry have done well out of that and perhaps frozen herbs,” Brian Young British Frozen Food Federation (BFFF) told Frozen Food Europe. “It includes cakes as well of course. Those people who couldn’t bake kept seeing cakes every week and they wanted to have some,”
USA’s Market and Markets has reported that the global frozen bakery market is growing and will be worth USD32.5bn by 2018 with a CAGR of 7.1% for the forecast period (2012-2018). In 2012, Europe led the frozen bakery market in terms of value, followed by North America and Asia-Pacific. Europe will grow at a steady CAGR of 6.9% over the forecast period.
The report states that there is a huge demand for frozen bakery products, for instance, frozen bread, as fresh bread has a very short life span. Supermarkets and hypermarkets have greater percentage of sales than artisan bakers. In recent years, the growth of coffee shop chains selling frozen bakery products has also increased the competition for other bakery outlets. There is an increasing trend towards specialty and continental frozen bakery products.
Outlets with in-store bakeries have significantly increased and the demand for frozen bakery snacks such as rolls, teacakes, scones, and specialty baked products.
Frozen bakery products have grown in popularity due to their ease of preparation and the time and cost savings that they provide to other institutional outlets. Convenience is the major reason for the growth of frozen bakery products along with the changing life-style of consumers.
This report “Frozen Bakery Market” covers products as frozen breads, pizza crust, pastries, cakes, and other frozen bakery products. Frozen pizza crust has the largest share of 32.2% of the total market. Frozen breads hold almost 25.5% of the total frozen bakery market followed by frozen pastries with 15.5% share.
Consumption trends
A Bord Bia (Irish Food Board) Bakery Research report on the bakery sector published in June 2014 states that more than 2% value growth is expected for the category. However issues around health perceptions will severely dent this if they are not managed. A disproportionate share of the category and its future growth is likely to go to unbranded/own label products if brands to not counter this and come up with relevant products and promotional activity.
Research (among consumers in Ireland and UK) showed that freshness, taste, and price are the top three most important drivers of bread choice with the health aspect just behind them.
There is a concern about the nutritional and calorific value of white bread – people fear it is fattening and has little nutritional value. 41% of people surveyed stated they are buying a wider variety of baked goods overall, while also actively reducing white bread consumption. Consumers also seek novelty, newness and excitement in their breads and bakery products.
Shoppers like weekday convenience and want a special experience at the weekend. There is a fall of around 20% in white sliced pan consumption at the weekend with rise in more artisan options.
Incidence of buying gluten free foods is up from 6% (2010 Bord Bia research) to 26% in 2014, but just a minority of these have any intolerance, and very few understand the specific benefits of gluten free overall. Just 3 in 10 gluten free bread buyers have a diagnosed allergy (29%) in the house. There are similar trends elsewhere including in the UK.
“There has been a massive growth in gluten free. One leading dessert manufacturer with a sizeable market share has seen their gluten free carrot cake become their best product. They have a whole range of gluten free frozen products. At our awards last June we had a number of gluten free products for the first time ever and they were amongst the award winners,” said Brian Young, BFFF. The Sidoli Gluten Free Carrot Cake won an award.
He confirmed that people are eating gluten free not because they have a gluten intolerance but because they feel it is good for them. The demand for gluten free is not just in the UK.
“Brakes (foodservice company) have confirmed this is a growing trend and they have a business in Finland where it is an even bigger trend,” said Brian Young, BFFF.
Healthy foods
The Bord Bia research found that there is increased interest in and awareness of functional and health foods which has led to an increase in popularity but little strong evidence or understanding of the real personal benefits. 42% feel confused about the health benefits of different types of bread.
Certainly, whether the consumer is fully informed or not, they are interested in consuming healthy foods, and therefore breads with seeds and more whole grains.
Labeling of foods to include ingredients and calorific values has been a feature of retail for some time but it is increasingly important for foodservice chains like McDonalds. Evron Foods Ltd, which supplies Subway told Frozen Food Europe that health and well being is increasingly important for consumers and consequently manufacturers seek to reduce sugar and salt.
‘Free from’ has become more than a mere buzz word as an ever increasing number of products carry the claim that they are free from – sugar, dairy and fat amongst other things. A recent YouGov survey found that nearly one third of UK households now buy ‘free from’ food, while over 20% of the population eats it on a regular basis.
In-Store bakeries
Another growth area is the in store bakery. Their products goods are often formed and part baked and delivered to the supermarket where the baking process is completed.
“In-store bakery is very strong. One of the biggest changes is the entry of the discounters like Lidl into the retail market. That has really shaken up the whole category in terms of the ranges the type of product they offer but also the value for money price point,” said Dominic Downey, Marketing Director at Evron Foods Ltd which supplies in store bakeries and foodservice in Ireland, UK and elsewhere.
The discount Netto brand is being introduced in UK by Sainsbury in a bid to compete with discounters.
“They will have an in store bakery from day one. So they perceive whether you are a supermarket, a convenience store, or now a discounter that in store bakery is a department which consumers identify with and want to see and expect to see within their store,” said Dominic Downey.
The discounters, and other retailers, have introduced continental and flavored breads such as ciabatta rolls and tiger breads which typically have a pattern baked into the top. Muesli bread with multi grains and honey is one of the many products introduced as a healthy option.
In the early days of in-store bakery French bread in its various sizes – parisienne, demi-baguette, and petit pan were the main products. They are the mainstay still but there is increasing variety of other types of products.
“What people are looking for is not just white bread, whether it is sliced pan or crusty bloomer, they are looking for some other flavour, multigrain or rye bread, or bread with olives also with tomatoes. These are often an indulgent product that they do not buy every day,” said Dominic Downey.
The artisan type product introduced as a premium product is now available at a more “mainstream” price. In Ireland, where Aryzta is present with the Cuisine de France brand, amongst others, Bord Bia figures show that growth (value) of frozen bread and rolls will be 2.21% YOY (2008- 2018) and frozen dough products double that 4.43%. Frozen cakes and pastries will grow by 1.66%. Figures for the UK are similar with bread and rolls at 1.71%; dough at 4.14% and cakes and pastries 2.87%.
Other products
The UK retail market Kantar Worldpanel for the 52 weeks up to 14th September showed that frozen dessert sales were down by 0.5% in value in a market is worth GBP271m. Sales in this category have slowed down in the last three quarters.
“As the economy improves one would expect that chilled desserts start to do better but frozen desserts do less well,” said Brian Young, BFFF. “While disposable income has not started to move, certainly a lot of people are talking about things getting better. Foodservice is definitely turning a corner.”
The same Kantar report shows that the savoury category, which is worth just over GBP1bn, has more growth than other categories with a 4.9% increase. It is difficult to break this down into individual product areas, but it does include frozen bread and Yorkshire pudding, both of which are selling well. The latter was heavily promoted as a weekday accompaniment to all sorts of foods to increase sales of a product considered to be an accompaniment to the Sunday roast.