Allied: ‘Wrapped bread sales can return to growth’

Allied Bakeries has unveiled a strategy to transform the packaged bakery market – and says it believes the wrapped bread category can return to growth.

The business this week announced ambitions to “reawaken” consumer interest in packaged bakery after revealing that its Kingsmill brand - which has been given a new look - is expanding with a loaf claimed to offer the ‘best ever toast’.

At a time when many businesses focus attention on in-store bakery, Allied cited Nielsen data stating the wrapped bread market is worth £1.3bn – more than twice the size of the £573m in-store bakery category and eight times larger than in-store bakery bread.

“Treating the most popular category as a poor relation to in-store bakery does nothing to enhance your credentials as a great baker,” states Allied in its strategy document, which focuses on driving value back into the market.

Wrapped bread has suffered from falling sales as a result of factors including the shift to sandwich alternatives and the introduction of free school meals, which have come as supermarkets use bread pricing as a key weapon in price wars.

The average price of large loaves (750g-plus) sold by ‘big three’ bakery brands Warburtons, Hovis and Kingsmill at major UK supermarkets has slumped 9% in the past two years, according to data from analysts Brandview.

And value sales of pre-packed bread have crashed 8.4% year on year, according to IRI, while volumes have fallen 7.2% (52 w/e 8 October 2016)

Allied, which has seen Kingsmill outperform its major rivals in the past year following severe slumps in the preceding 12 months, said the decline in volume sales of wrapped bread were already showing signs of slowing.

“It won’t happen overnight, but we believe bread can grow within packaged bakery,” said Allied Bakeries managing director Jon Jenkins, who pointed out the strategy was a three to five-year plan.

The document sets out a range of strategies including developing a premium wrapped bread category through quality products and in-store execution and tapping trends such as snacking and on-the-go food. Suggestions include:

  • Improving perceived nutritional value of bread by dialling up fibre, energy etc
  • Using the bakery environment to deliver emotional desire by removing anything that highlights processed, such as plastic trays
  • Reframing bread quality through a look and feel that is closer to fresh
  • Meeting demands including gluten-free, smaller loaves, portion control and fortification
  • Shallower discounting
  • Innovation in packaging formats to meet occasions such as snacking
  • Capitalising on seasonal opportunities through variety and novelty

In the case of its own products, Allied will next year relaunch Allinson as a premium brand with a craft bakery feel. With a line-up including Rustic White and Signature Seeded, it will comprise 650g loaves - rather than the standard 800g - that Allied said will help to mitigate concerns over food waste.

Allied is also revamping its Burgen brand next year, with a new look at products designed to tap health trends such as consumer interest in protein.

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