As demand for organic goods continues to rise across everything from cosmetics to beer, the category has moved firmly from the trendy into the mainstream arena. While bread has not been one of the strongest organic categories, new research shows that bakers can follow the lead of fresh produce and dairy products. The signals are that a general move to ’premium’ within the bread sector has opened the way for greater expansion of this category.
A new report from Leatherhead Food International values the organic bread market in the UK at £26m in 2006 to 2007, although it remains niche within the overall bread category, accounting for 1% of total sales. However, organic bread sales grew by a quarter in the past year. The research says: "Growth is very strong totalling 25.3% in the past year. The general move upmarket within the bread sector has opened the way for greater expansion of this category."
The report explains that ’premiumisation’ - trading up to premium varieties - is increasingly common among UK consumers and that it is having an impact on all areas of food and drink: "Bread has been no exception and the ethnic/speciality and organic breads sectors have benefited from this."
It says there are two opportunities for organic bread. "First of all it is a growing market, at some 25% per annum. Secondly, bread lags behind other food products in terms of its share of consumer spend. If we were to achieve the same share for organic bread as the retail market as a whole does for all organic products, sales would virtually double."
The first organic naan bread, for example, was launched in the UK in 2007 by Honeytop Speciality Foods, which indicates that the organic market could be set for increased segmentation, confirms the report. "As the category matures, more activity in speciality products is anticipated," it states.
Paul Morrow, MD of British Bakels, which commissioned the report, said. "It is clear from this report that consumers do want to trade up and that organic offers a way forward."
Other activity in the bakery market has been relatively limited, says the report, with only smaller suppliers, such as The Village Bakery and Doves Farm Foods, having shown much interest in developing organic lines. Meanwhile, Duchy Originals is one of the few organic brands to focus on organic pastry, having opened a new Cornish bakery and a range of pasties and tarts in 2006.
=== Organic trends ===
l Within organic baking, there is support for bakers and millers to enter into long-term supply contracts with grain suppliers
l Organic bread products have sustained year-on-year growth in both value and volume although they face competition from other premium bread lines such as seeded or wholegrain
l Organic bread may benefit by differentiating from other naturally healthy bread products.
Source: Mintel Organics, Jan 2008