Some of the leading names in British baking give their views on the issues that could shape the market this year.

Note: With Brexit an industry-wide challenge for 2019, we asked commentators to avoid this topic.

Alasdair Smith
Chief executive, Scottish Bakers

Challenges: Regardless of the size of a business or where it is located, our members struggle to attract and, in some cases, retain staff. There is real concern the bakery trade is not seen as an attractive destination or career pathway, despite many businesses making commitments to apprenticeships and other development opportunities. In some of Scotland’s more rural communities, the issue is further exacerbated by a lack of housing, making it doubly difficult to bring new people into these areas.

Opportunities: The increasing awareness and recognition of craft products is creating opportunity for new and established businesses. For those that can adapt to changing tastes and high street trends, there is business to be won creating alternative offers to the national multiples around food-to-go, high-quality coffee and great service. At the other end of the spectrum, specialist bakeries with narrower ranges and often with associated cafés continue to appear and thrive.

Steve Merritt
Managing director, EPP

Challenge: The biggest challenge facing UK bakery manufacturing is conservative thinking. There is a huge range of offerings for process technologists, engineers and bakers to choose from but, rather than recommend the new, innovative solution that offers the business a competitive advantage, all too often the decisions made are based on lowest risk. You will never get shot by senior managers for suggesting doing what you are already doing seems to be the mantra. Equally, you won’t break away from your competitors.

Opportunity: Being open to new solutions, alternative approaches and working with new suppliers offers real advantages. This isn’t about getting three different quotes for the same project. It is about nurturing the relationship with a supplier to develop and tailor a solution that is right for tomorrow as well as today. Make 2019 the year you allow yourself to be open to new ideas.

Ann Wells
Group marketing director, Brook Food

Challenge: Allergen concerns mean it is no longer just larger manufacturers considering how equipment is used across multiple product lines containing different ingredients. We are seeing firms of all sizes consider purchasing additional machines or food contact parts to aid smooth cleandown and switching between products, and to ensure procedures are in place to swap bowls and tools between products in a smoother manner without compromising on hygiene and contamination.

Opportunity: Not every machine in a bakery can have an understudy, but there are steps that can be taken to make things easier; depositors can be supplied with additional templates and hopper, and mixers can have additional bowls and tools. As time goes on, there will be other ways that all sizes of manufacturers look to maintain a safe workplace with equipment and processes.

Stan Cauvain
Director and co-founder, BakeTran

Challenge: Key challenges for bakers in 2019 will continue to be rising raw materials, processing and distribution costs, while at the same time trying to limit product price rises. Some challenges are determined by global forces and are outside the bakers’ control. Such is the case with energy costs – around 68% of bakery energy costs are related to the process of converting dough to bread and batter to cake.

Opportunity: By taking a holistic view there are opportunities to limit energy costs. The production of bread is more than a case of sticking a lump of dough into the oven and hoping for the best. Most bread quality is determined in mixing and processing, long before the dough enters the prover and oven. Reduced energy costs can come from paying greater attention to the basics of bread- and cake-making. Often, it is the marginal gains in baking that deliver the greatest wins, especially if they are combined with innovation and improved process control.

Simon Solway
Sales & marketing director, AB Mauri UK & Ireland

Challenge: The bakery market can be very cost-adverse and we will continue to support our customer base with the challenges they face daily. What we need to focus on as an ingredients industry is ensuring the benefits of our bespoke, value-added customer solutions are coming through to consumers. As you have seen this year, with our acquisitions of Holgran and Fleming Howden, it’s clear that the market landscape is prone to change, which also needs to be factored in.

Opportunity: Focus remains – and will always remain – on cost engineering. However, the fact that the bread market is ‘mature’ is an enabler in the sense that discriminating factors are welcomed in terms of value-added products. This, for example, could be a bloomer produced via a cereal fermentation process, manufactured industrially or a product inclusive of malt, seed and grains. Consumers have come to expect a variety of differentiation along the bakery aisle, regardless of the retail model, which stands us all in good stead.

Richard Tearle
General manager, Rondo Limited

Challenge: A key challenge will be meeting the needs of the free-from sector. In particular, this means continuing to find ways to overcome the difficulties of handling and processing newly developed doughs that do not behave in the same way as those with a gluten structure. At Rondo, we will strive to develop doughs and equipment to fulfil this market need.

Opportunity: The continued growth of the free-from sector also remains a key opportunity. It remains the fastest-growing area, showing no signs of slowing down, offering great potential for automation in the area of sheeting and shaping doughs as production volumes continue to grow apace.

Jacqui Passmore
Marketing manager UK and Ireland, Dawn Foods

Challenge: Sugar reduction will continue to be big news, providing manufacturers with exciting opportunities for NPD, but bringing technical challenges too. The backlash against processed food means brands need to be innovative in their approach. This means replacing sugar with alternatives perceived as ‘better for you’. This includes natural sugars in the form of fruit inclusions or purées and dried fruits, and other natural sweeteners such as maple syrup or honey.

Opportunity: The industry has taken Public Health England’s target of 20% sugar reduction by 2020 and risen to the challenge, with many products developed that taste just as good as their full-sugar counterparts. Small-scale sugar reduction does not affect the perceived sweetness. However, moving towards a 20%-plus reduction there is noticeably less sweetness, so we are seeing more use of fruit in bakery products in the market, not only to boost sweetness but also to appeal to today’s consumer who is looking for a more natural way to get a ‘sugar fix’.

Alex Waugh
Director, Nabim

Challenge: Our sector often comes under pressure for dietary reasons – whether that is linked to gluten, calories, carbohydrate or some other factor. In 2019, let’s market the good things about bread and other bakery foods. They are a big source of fibre; account for a decent amount of dietary protein, and are important sources of iron, calcium and other vitamins and minerals. Far from contributing to dietary woes, they ought to be a foundation of healthy eating (and they are mostly plant based – bang on trend).

Opportunity: One of the key facts to come out of Brexit discussion has been that the UK imports over £2bn worth of bakery products each year, mainly from the EU, more than twice the level of exports. In 2019, we should look hard at the scope for replacing some of these imports with home-produced goods. At such a level of demand, there must be worthwhile opportunities for investment that will be both profitable and offer our customers both greater security of supply and locally produced goods of superb quality.

Mark Smith
Category manager, Lantmännen Unibake UK

Challenge: Food-to-go is expected to be worth £17.8bn by the turn of 2018 and continues to outperform the wider eating-out market. There is plenty of scope for expansion but there is a risk that too much innovation can overshadow the importance of core ranges, which remain fundamental to sales success. Retailers should ensure they stock best sellers in Danish and French pastry – especially as the three top-selling Danish pastry SKUs deliver 62% of total category value.

Opportunity: There’s an insatiable appetite for world flavours and, this year, we’ve seen the growing popularity of Scandinavian soft doughs and the huge success of the Portuguese custard tart – sales have increased a staggering 458% since 2016. Middle Eastern tastes are also proving popular, straddling both savoury and sweet bakery.

Michael Schofield
Marketing manager, Bakels

Challenge: In contrast to other food products, sugar in baked goods goes further than just sweetness. Providing attributes including colour, bulk, flavour, preservative, humectancy and texture, sugar reduction remains a challenge for the baking industry. Issues around reformulation include increased numbers of ingredients, ones that consumers are not familiar with, all often without significant changes in the energy content of products. Also, the cost of replacing the sugar can be high.

Opportunity: With nearly one in three food items chosen for health reasons, we are seeing the ‘mindful consumer’ trend carry through to the bakery market and an opportunity to provide bakers with ingredients to produce wholesome baked goods. Heightened responsiveness to nutritional benefits associated with baked goods means opportunities exist to launch goods with familiar nutritional claims, such as fibre and protein. Free-from foods continue to show high demand and in particular the rise of veganism, a lifestyle now adopted by 20% of under-35s.

Kirsty Graham
Marketing executive, Cake Décor

Challenge: The biggest challenge we face in the UK food industry – in particular the baking industry – is global and economic stability, making it hard to plan for the long term and difficult to confidently predict and grow our export side of the business from a cost management perspective. Completely unpredictable and totally beyond our control, we therefore have to manage the parts of our business we can control, exploiting the many strengths we have, and continue to have, in this exciting and dynamic industry.

Opportunity: We have used this challenge as the impetus for massive investment in our own manufacturing capabilities – expanding our factory and investing in new technology to ensure we have all we need to function and grow without resorting to other companies or countries. ‘Made in the UK’ is now very much one of our USPs in this competitive climate. It has given rise to many new opportunities and innovations in our production – for example, we can now offer our customers a huge range of higher-quality cake decorations with uninterrupted supply.

Richard Hazeldine
Chairman, British Society of Baking

Challenge: This year is without doubt going to be challenging; the economic outlook remains uncertain, there is the possibility of a change of government, the high street remains under pressure, our eating habits are changing and, as we learnt at the British Society of Baking (BSB) Autumn conference, consumer confidence is lower now than it was two years ago. However, we shouldn’t think that it is all doom and gloom, there are opportunities. 

Opportunity: We also learnt that, for two years running, wrapped bread is in growth, being driven in part by seeded breads. New product development is key, and almost a third of food products are being chosen for health reasons. Roberts Bakery and Warrens taught us that, by having a vision and being bold and committed, it is possible to refocus and re-energise your business for growth. The message from our most junior and most senior presenters were very similar, in that both encouraged us to step up and work outside our comfort zones. We have big challenges ahead, but we also have an industry that is willing to learn and willing to share experiences, and that is our greatest strength. The BSB will help facilitate that, through our conference programme for 2019.

Agnes Gabriel- Damaz
Founder, Gradz Bakery

Challenge: For GRADZ Bakery our main challenge has become very much our opportunity. The decline in bread buying by those looking to avoid gluten was of course a major challenge not just for us but the entire baking industry. Luckily many of our recipes readily adapted to gluten free both in breads and cakes and we have spent the last few years investing in our manufacturing facilities to ensure we are completely robust in our gluten free offering – our bakery is now actually recommended by the Coeliac Society which means we can guarantee our products to both retailers and the consumer. This growing market has inspired us to develop a wide range of new recipes and products for both the consumer and the catering industry including cakes and breads.

Opportunity: With our breads we bake traditional recipes with a modern healthy twist and our gluten free range builds on this whilst also offering an indulgent delicious treat with our gluten free cakes like flapjacks and brownies.