While in-store bakeries are seeing sweet success from pastries and confectionery, bread continues to be a drag on the category, losing sales to wrapped bread. This is all the more baffling when consumers claim to value freshness as one of their top purchasing decisions.

Lantmännen Unibake/Bakehouse, conducted in-depth research into current UK bread market trends through a series of 500 detailed interviews focusing on consumer bread purchasing decisions. When participants were asked what the most important factor was when buying or eating bread, taste came out on top, with 30% saying it was their number one priority. Being freshly baked was deemed the second most important, with ’low price’, ’wholegrain’ and ’healthy’ all coming lower down on the list of priorities. When asked about their opinion on bread, a majority (59%) agreed that quality was more important to them than price or good offers.

Nevertheless, this has not benefited ISB bread sales. "Unit growth across the ISBs is down by 0.8% (Nielsen, year to 6 August 2011), but sweet snacking within ISBs is up by 4% year on year (4.8% in value), so bread is behind the flat performance from the volume perspective," says Louisa Gould, category strategy manager at Bakehouse.

Kantar data also shows frequency is down, trips are down and pre-packed bread is growing in both of those areas, which could be a result of a recessionary climate. However, high value speciality items, such as breads with inclusions, continue to grow.

Sweet products have fared much better, with doughnuts the hero, bringing an extra £10m into the category over the last year, followed by Viennoiserie (+£8.2m) and cookies (+£6.5m). "Within Viennoiserie, growth has come from a penetration increase, and not from doing anything particularly different," says Gould. "It’s coming from plain croissants growing at 14%, pain au raisin at 30% and pain au chocolat at 34%." But growth in muffins, has flattened, while flapjack-style products have seen a boost in sales.

"Danish pastry growth is coming from shoppers purchasing more often, and doughnut growth is being driven by an increase in shoppers buying from the fixture," concurs Chelsea Pogson, marketing manager of Vandemoortele. Quoting Kantar data, she says Danish pastry (+6.7%), doughnuts (+3%) and cake (+11.7%) are driving growth (Kantar Worldpanel 12 w/e 10 July 2011 on the same 2010 period).

Meanwhile, licensed cookies showed a like-for-like increase of 6% (Kantar Worldpanel y/e 11 July 2011). The range available on the market is now wide, with both Nestlé and Kraft offering several successful varieties, and CSM recently adding the Terry’s Chocolate Orange Cookie to the mix.

ISB insights

l According to a survey by Lantmännen Unibake/Bakehouse (see main text), when asked where people bought their bread from, the most popular were supermarket shelves (75%) and the in-store bakery (42%); 17% said they visited their local bakery and 9% went to a convenience store, with a further 4% saying they shopped elsewhere; 84% of interviewees said they were tempted to buy when they could smell freshly baked bread.
l Findings from Vandemoortele’s recent ISB consumer research, using Discovery, found that ISB shoppers are discerning when selecting products. "They want be assured the product is as fresh as it can be, is baked correctly and is finished, if required, to the best standard," explains Vandemoortele’s Chelsea Pogson, adding that availability is key.
l The challenge is to offer a broad bakery range even where space is tight. A good example of this is The Co-operative, which provides a great choice of products even in its smallest store formats, says Siân Mattison, marketing, CSM United Kingdom. "For convenience, it is important to include treats that are easy to eat on the move," she says.

Room for improvement

Research & consulting firm Harris International Marketing conducts an annual Supermarket Tracking Programme to benchmark the opinions of shoppers at small and medium-sized (3,000-25,000sq ft) supermarkets on the high street.
Over 6,000 face-to-face shopper interviews were conducted at Tesco Metro, Sainsbury’s, Asda, Morrisons, The Co-operative and Budgens, in October 2010, and revealed:
l Where there is an in-store bakery in a convenience supermarket, 15% of shoppers will use it in a typical day; 9% will buy bread or rolls specifically; about 3% will buy sweet snacks such as pastries, muffins etc
l However, that 15% represents a year-on-year fall from 18%
l Awareness of convenience supermarket in-store bakeries needs improving: incredibly, 28% of shoppers were not aware that the supermarket they were in had an in-store bakery.

orrisons and Lidl up the ante

According to Harris International Marketing (him!), in a typical month, 38% of shoppers will use the in-store bakery, but this rises to 46% at Morrisons, whose in-stores have been performing well. An intriguing development is its new M Local, a convenience-format store launched in Ilkley. "It has a great in-store bakery and includes a free slice-your-own facility, which very few convenience stores offer," says Katie Littler of him! In-store bakery shoppers are impulsive; that is, as many shoppers buy in-store bakery on impulse as soft drinks, according to him! This is undoubtedly why M has placed the focus on self-serve, with pastries sold alongside freshly squeezed juice and hot coffee at the till point.
With Asda, Sainsbury’s and Tesco’s sights trained on smaller-format ’top-up’ shopping, observers are keenly watching Morrisons’ trial outlets. "They have a strong focus on fresh foods and fresh bakery products. It also stocks a number of locally sourced lines," observes David Gray, UK retail analyst at Planet Retail. "It is a hub-based model supported by a larger store nearby, and they will probably find it successful and roll it out."
Lidl is another retailer to have revealed that it is rolling out ISBs in its stores (British Baker, 12 August, page 4). "The discounters are becoming more mainstream," says Gray. "Going into in-store bakery reflects the fact that they are capturing a broader customer base, rather than just the discount end."