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Executive Summary

Table of Contents

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EXECUTIVE SUMMARY

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 percent 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 percent over the 5-year period from 2000 to 2004, reaching £3.03bn.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: The Size of the Bread Market Compared With Other Major Food Markets (£bn at rsp), 1999

Table 2: Household Expenditure on Food by Product Sector (£ per person per week and percent), 1997/1998 and 1998/1999

Table 3: UK Household Food Consumption (grams per person per week), 1987-1998

Table 4: Average Prices Paid for Bread (pence per kilogram), 1994-1998

Market Size

INTRODUCTION

THE TOTAL MARKET

BY MARKET SECTOR

BREAD PENETRATION BY SECTOR

Table 5: Retail Sales of Bread and Bakery Snacks at Current Prices (£m), 1995-1999

Table 6: Retail Sales of Bread and Bakery Snacks by Sector (£m), 1996-1999

Table 7: Volume Penetration of Bread by Market Sector ( percent), 1994-1998

Table 8: Volume Consumption of Bread by Bread Type ( percent), 1994-1998

Table 9: percentage of Households Purchasing Each Type of Bread Within Survey Week ( percent), 1997 and 1998

Table 10: Value Penetration of Bread by Market Sector ( percent) 1994-1998

Table 11: Value Penetration of Bread by Type ( percent), 1998

Industry Background

INTRODUCTION

RECENT HISTORY

PLANT BAKERIES

IN-STORE BAKERIES

MASTER BAKERS

INDUSTRY CONCENTRATION

EMPLOYMENT

RETAIL DISTRIBUTION

TRADE BODIES AND ASSOCIATIONS

Table 12: Vertical Integration in the Milling and Baking Industry, 1999

Table 13: Concentration in the Bread, Fresh Pastry Goods and Cake Manufacturing Industry by Turnover Size (number of units and percent), 1998 and 1999

Table 14: Concentration in the Bread, Fresh Pastry Goods and Cakes Manufacturing Industry by Number of Employees (number of units and percent), 1999

Table 15: Concentration in the Bread, Cakes and Flour Confectionery Retailing Industry by Turnover Size (number of units and percent), 1998 and 1998

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

SPECIALIST RETAILERS

IN-STORE BAKERIES

ADVERTISING AND PROMOTION

Table 16: Market Share in the UK Bread Market by Value and Volume ( percent), 1999

Table 17: Selected Leading Companies in the UK Bread Market by Turnover and Pre-Tax Profit (£m), 1998/1999

Figure 18: Number of Retail Units of Leading Multiple Bakers, 1996, 1998 and 1999

Table 19: Number of In-Store Bakeries in Major Grocery Multiples, 1999

Table 20: Main Media Advertising Expenditure on Bread and Bakery Products (£000), Year to June 1998 and 1999

Table 21: Main Media Advertising Expenditure on Bread and Bakery Products (£000), Year to June 1998 and 1999

Strengths, Weaknesses, Opportunities and Threats (SWOT)

THE TOTAL BREAD MARKET

WHITE BREAD

BROWN AND WHOLMEAL BREAD

BAKERY SNACKS

SPECIALITY BREADS

Buying Behaviour

INTRODUCTION

PENETRATION

USAGE OF BREAD

Table 22: Penetration of Bread Among Female Housewives ( percent housewives), 1997-1999

Table 23: Heavy, Medium and Light Users of Bread - Female Housewives, 1997-1999

Table 24: Number of Loaves of Bread Used (All Bread) by Female Housewives ( percent housewives), 1998 and 1999

Table 25: Bread Types Used Most Often by Female Housewives ( percent housewives), 1997-1999

Table 26: Number of Loaves of Brown and White Bread Used by Female Housewives ( percent based users of each type of bread at all), 1999

Table 27: Usage of Bread by Female Housewives by Age ( percent housewives), 1999

Table 28: Usage of Bread by Female Housewives by Social Grade ( percent housewives), 1999

Table 29: Usage of Bread by Female Housewives by Region ( percent housewives), 1999

Table 30: Usage of Bread by Female Housewives by Presence and Age of Children ( percent housewives), 1999

Outside Suppliers to the Industry

WHEAT SUPPLIES

FLOUR MILLERS

PACKAGING

Table 31: UK Wheat Usage by Volume ( percent), 1980/1981-1998/1999

Table 32: Flour Production by Type by Volume ( percent), 1994/1995-1998/1999

Current Issues

HEALTH ISSUES

NEW PRODUCT DEVELOPMENT

CORPORATE ACTIVITY

Forecasts

PLANT BAKERIES

FORECAST 2000 TO 2004

Table 33: Forecast Retail Sales of Bread and Bakery Snacks at Current Prices (£m), 2000-2004

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HOPPENSTEDT BONNIER INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1999 Key Note

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Last updated by Jacob van Eldik 19th January 2000