Ready to Bake and Pre-Baked Foods: The Upper Crust

With consumers increasingly trading up to higher quality bread, the prospects for part-baked foods appear bright, reports Jonathan Thomas.

The European market for bake-off solutions (which comprises part-baked and ready-to-bake foods) has grown in recent years, driven by the greater consumer desire for freshly prepared bread, rolls, cakes and pastries. Prior to 2020, for example, the UK market for part-baked bread was growing by more than 2% per annum. Sales of bake-off solutions are heavily skewed towards foodservice outlets such as restaurants, pubs and hotels, as well as the in-store bakeries (ISBs) which now proliferate across many grocery retail channels. These tend to either make bakery goods such as bread from scratch using raw ingredients or use dough which is part-baked and then frozen.

For these operators, bake-off solutions offer advantages such as improved convenience and reduced timescales and costs, as well as the capability to supply a range of different products catering towards an increasingly discerning consumer base. However, bake-off solutions do present their own challenges, such as the strong reliance upon employee abilities at the point of sale, along with the fact that access to an efficient cold chain distribution system is necessary.

Recent corporate activity has mirrored the overall industry trend towards more premium bakery products. One company active in the UK market is St Pierre Group, owner of the Paul Hollywood range of part-based breads. This was recently extended with new Stonebaked Flatbreads, which sit alongside part-baked rolls in varieties such as Multi-Seed, Rustic and Sourdough. Elsewhere, Lantmännen Unibake has introduced Ciabatta Oat, a frozen bake-off solution comprising sourdough and olive oil.

European Bread Consumption

Demand for bake-off solutions is heavily influenced by consumption patterns within the bread and bakery goods market. Although bread and rolls remain staples of European diets, the sector has come under pressure within the last few years, with consumption largely static or declining across much of the region – reasons include perceptions that bread may be calorific or fattening, as well as changing eating habits (e.g. fewer people eating toast for breakfast) and growing competition from alternatives such as tortillas. However, the situation is not entirely negative. Market growth in value terms has been aided by the shift towards higher quality bread and rolls, which carry classifications such as artisanal, specialty or continental. What is happening in many of the larger European markets is that consumers are purchasing bread less frequently but trading up to more expensive varieties when they do buy into the category.

The increased consumer demand for higher quality bread can also be illustrated by the continued growth in the number of retail outlets (e.g. supermarkets, convenience stores, etc.) containing an in-store bakery across much of the western world. In European countries such as the UK, Ireland, the Netherlands and Finland, the share of the bread market taken by plant/industrial bakers has traditionally been high, at around 80% by volume. However, the recent growth of the ISB sector has aligned these countries more closely with the likes of France, Germany, Italy and Spain, where consumers have always preferred to buy bread fresh from craft or artisanal bakers.

Bread consumption patterns were strongly influenced earlier in 2020 by the Covid-19 and the measures introduced to curb its spread. In the UK, a huge spike in demand for bread and bakery goods such as rolls was reported in the few weeks prior to lockdown at the end of the first quarter. According to data from Kantar, sales of bread and other bakery goods via supermarkets rose by almost 57 million packs in March 2020, compared with 12 months earlier. Some of the largest increases were reported for bakery goods such as sandwich alternatives, breakfast pastries (e.g. croissants) and rolls. Elsewhere, a poll of 500 people carried out by Hovis in March 2020 found that 37% of respondents reported purchasing more bread than was usual.

Covid-19 also had a significant effect upon distribution patterns within the bakery market. Demand for frozen dough is believed to have been adversely affected by the closure of many in-store bakeries during lockdown periods, although those ISB outlets which remained open did derive some benefit from the shutting down of many competing foodservice outlets. On a related note, the shutdown of much of the foodservice industry led some bakery manufacturers to rethink their distribution strategy – for example, Lantmännen Unibake redirected sales of its Americana range of frozen burger buns and hot dog rolls and its Schulstad Bakery Solutions brand (which includes ciabatta and paninis) from foodservice to retail.

Covid-19 also led to a surge in home baking in markets such as the UK, with boredom during lockdown cited as one of the main reasons. This led to a shortage of flour in grocery retail channels, with almost one-third of UK households buying into the category in the period immediately before lockdown – for example, the Allinson’s brand owned by Associated British Foods (ABF) reported 265% year-on-year growth during this time. The shortages of flour were caused by the lack of bagging and packaging capacity for the smaller formats typically sold via retail channels – this sector accounts for only a modest share of overall flour consumption in the UK.

Aside from the growing interest in home baking, Covid-19 has also seen some other notable shifts in consumer behavior which are likely to affect consumption of bread and bakery products. With fewer people now working regularly in offices, the number of in-home meals such as breakfast and lunch has increased. Bakery goods such as bread, rolls, pastries and other products eaten as snacks (e.g. muffins and doughnuts) appear ideally positioned to take advantage of this, as home workers attempt to recreate the type of foods eaten during the working day.

To read the entire article please click here for the Nov-Dec print issue of Frozen Food Europe magazine.

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