In today's climate of recessionary strain, the supermarkets' path of least resistance appears to be cutting costs, as evident in the current price wars. But as retailers keep bread prices frozen, sales have continued to spiral downhill and white bread in particular has suffered, according to figures from the Federation of Bakers (FoB).
Results from the FoB's survey for the four-week period from 1 to 28 October 2011 indicate that white bread sales have declined from 84,113 in 2010 to 76,482 in 2011 an annual percentage change of -9.1%. Brown bread sales have fallen at a slower rate: from 31,600 in 2010 to 30,137 in 2011 an annual decline of -4.6%. Sales overall were down by -7.9%.
This has a major impact on yeast manufacturers, because the less bread bakers bake, the less yeast they buy. A declining market brings over-capacity a reality to which yeast suppliers must respond.
"Much less white sliced bread is being eaten," says Mike Abraham, sales manager for DCL Yeast, part of the Lesaffre group. "This is partly the rise in health consciousness and partly economic circumstances people are more likely to put the crust into the toaster than the bin these days."
Abraham says bakers are working hard to continue to make white bread interesting to consumers in terms of flavour and texture, which is a challenge with reduced salt levels. He says: "Our customers are trying to bake something slightly different with a more interesting taste longer production processes add flavours. Yeast manufacturers must respond to this, whether it means producing more tolerant yeast for more challenging processes that develop flavour, or developing more enhanced-flavour yeast. We're looking at the challenges of the industry with declining sales of white bread."
Declining bread sales are just the start of the problem for yeast suppliers. Prices of raw ingredients are also rising as global markets become more volatile. The development of yeast is strongly linked to the EU sugar beet history as the micro-organism is fermented on a substrate rich in sugar in the form of molasses: the syrup that is a by-product of sugar production.
While EU sugar production has been reduced, EU subsidies have boosted the development of bioethanol, which consumes molasses as a raw ingredient. Yeast produ-cers have been threatened by competition for molasses from the rising tide of biofuel producers, which have higher margins that enable them to pay sugar farmers higher prices.
Dr Mike Chell, managing director of yeast producer Lallemand, speaks of a global issue: "In the big sugar-producing areas, such as Brazil, the molasses are being redirected into bioethanol production, which adds value to the [sugar] producers. We [yeast manufacturers] have to take it on the chin."
Combine this ingredient sourcing issue with the rising input cost of energy and it is evident that yeast manufacturers are living in very difficult times. So what is the answer? The Confederation of EU Yeast Producers has called for new measures to reform the EU sugar market, including better management of sugar quotas with priority for EU markets and access to world market prices by 2013.
But what can yeast producers do in the meantime?
The way forward
Abraham says there is no one-size-fits-all approach. "The future lies in providing a range of more specialist yeasts to meet the specific and varying needs of the baking industry," he says. "Over the past 10-15 years, yeasts have been developed to work faster and faster to service the needs of the high-volume bread plants. The reduction of salt has introduced the potential need for more specialist flavour-enhancing yeasts to suit the needs of the customers.
"Our plans are to have different kinds of yeasts for certain applications. For example, we're developing new dried yeasts for pizza: Saf Pizza and Viva Pizza. They give more extensibility, so the bakers can stretch the dough more easily. We have also developed improved dried yeasts to extend the shelf-life of packaged bread mixes."
But he believes the UK market remains driven by the trend for convenience, as bakers also have to cater for the increasing number of high street fast food bakery retail outlets, such as Greggs and Subway. "It's all about food on the hoof and craft bakers need to consider this trend if they want to remain successful," Abraham says. "People are increasingly reluctant to get up at 2am to bake bread from scratch, so bakery sales points increasingly need to employ a fast parbaked/proof-from-frozen process and it's our part of the role to supply the appropriate ingredients."
Innovations in variety can compensate for lost volume, argues Chell. He says bakers and yeast manufacturers must adapt their processes to an evolving market, as white bread sales decline and the indulgence sector grows, bringing more Continental-style products and speciality breads to supermarket shelves. Standard bread-making procedures just will not cut it.
Chell says his customers have shown an increasing interest in innovating fermentation flavour and a return to the more traditional taste of bread that was produced before the mass industrialisation of baking processes in the 1960s. "If you buy white bread, the complaint is that it is bland," he says. "Because the long fermentation process disappeared for convenience factors, there was less time for the yeast to ferment the flour, so you don't get the flavour development.
"Typical UK yeast was developed several years ago for high-speed bread-making processes, so it's perfect for white sliced loaves," Chell adds. "But if a baker wants to make Continental bread, he needs to use a different form of yeast. There are also a number of more recent bakery products that have come to market in the UK such as stollen and panettone that are made from a richer dough and contain high levels of sugar or fat."
Burgeoning artisan bread sales are bringing more business to DCL Yeast, which reports increasing sales of around 20% for its refrigerated liquid yeast dispenser Kastalia, which has been designed for use by smaller bakers in the craft sector. The product comprises yeast that has been stabilised and packed in bag-in-box containers for hygiene and freshness. It also promises better mixing, more accurate dosing, less waste and lower risk of contamination.
"Growth is rising steadily in the UK but not as fast as it is in the Netherlands and Belgium," says Abraham. "This is because the system requires investment and our market is conditioned by pricing pressure the price of British bread is below that charged in Europe."
Back to pricing pressures. Andy Pollard, managing director of bakery ingredients firm Cereform and yeast supplier Mauri Products, believes the way forward in today's constricted times lies in cost-engineering yeast products to help bakers keep expenditure down. "We've decided to maximise the activity level of our yeast products to give the bakers the cost-driven benefit," he says. "Now they can use less of the product for greater yield and it has the same taste as a slower-working product."
He stresses the need for products to perform consistently to remain competitive in such an economically pressurised environment: "Our customers need to be more demanding of every ingredient they use in their process," says Pollard. "We are constantly looking at quality enhancement and cost engineering to reduce waste."
While that is not exactly an easy path to take, it may be one that will lead to main-taining a successful company and being a winner, rather than a loser, in the yeast manufacturing business.