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Bread and Baked Goods - UK - September 2013

“While consumers’ demand for variety highlights the potential for brands to benefit from continuing to develop their alternative baked goods offering, it represents a call to action for manufacturers not yet active in this segment to move into it.”

– Heidi Lanschützer, Food and Drink Analyst

Some questions answered in this report include:

  • What measures can be taken to address the health myths about bread?
  • What opportunities are there to justify a premium positioning?
  • How can manufacturers mine variety to maintain users’ engagement with the market?
  • How can sweet baked goods leverage their snacking associations better?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: UK retail value sales of key bread and bakery sectors, 2011-13
            • Forecast
              • Figure 2: UK retail value sales of bread and baked goods, 2008-18
            • Market factors
              • Wheat prices remain high
                • Bread’s health credentials under scrutiny
                  • Changing consumer lifestyles have been impacting the market
                    • Companies, brands and innovation
                      • Warburtons remains market leader in 2012/13
                        • Figure 3: Leading manufacturers’ shares in the UK’s bread and baked goods market, 2012/13*
                      • Own-label drives NPD activity in 2012, however brands have fought back in 2013
                        • The consumer
                          • Bread enjoys almost universal appeal
                            • Figure 4: Types of bread bought in the last three months, June 2013
                            • Figure 5: Types of baked goods bought in the last three months, June 2013
                          • Eating occasions beyond lunch and breakfast remain niche
                            • Freshness is the single most important choice factor for bread shoppers
                              • Figure 6: Factors considered when buying bread and baked goods, June 2013
                            • Variety and health are key concerns for bread and baked goods users
                              • Figure 7: Users’ attitudes towards bread and baked goods, June 2013
                            • What we think
                            • Issues in the Market

                                • What measures can be taken to address the health myths about bread?
                                  • What opportunities are there to justify a premium positioning?
                                    • How can manufacturers mine variety to maintain users’ engagement with the market?
                                      • How can sweet baked goods leverage their snacking associations better?
                                      • Trend Application

                                          • Trend: The Big Issue
                                            • Trend: Many Mes
                                              • Mintel Futures: Human
                                              • Market Drivers

                                                • Key points
                                                  • Low consumer sentiment has little impact on the market
                                                    • Figure 8: Monthly consumer confidence index, January 2007-June 2013
                                                  • Soaring wheat prices continue to put pressure on the market
                                                    • Figure 9: Monthly index of producer prices of breadmaking wheat in the UK, January 2009-March 2013
                                                  • Demographic changes represent both opportunities and threats
                                                    • Figure 10: Projected trends in the age structure of the UK population, 2013-18
                                                    • Figure 11: UK households, by size, 2008-18
                                                  • Bread’s health credentials under scrutiny
                                                    • Bread suffers from an adverse health image among consumers
                                                      • Bread under fire for high salt levels and reportedly misleading wholemeal claims
                                                        • Rising awareness of food allergies/intolerances benefits free-from segment
                                                          • Increasingly busy consumer lifestyles have been impacting the market
                                                          • Strengths and Weaknesses

                                                            • Strengths
                                                              • Weaknesses
                                                              • Who’s Innovating?

                                                                • Key points
                                                                  • Own-label accounts for almost two thirds of new launches in 2012
                                                                    • Figure 12: New product development in the UK bread market, branded vs own-label, 2009-13
                                                                  • Morrisons leads NPD activity focusing on health, with Tesco being hot on its heels with speciality bread
                                                                    • Figure 13: New product launches in the UK bread market, by top 10 companies, 2009-13
                                                                  • Breakfast occasion and sandwich alternatives hold leading brands’ attention
                                                                    • Increased focus on smaller-sized packs and mini-formats
                                                                      • Ethical packaging claims on the rise
                                                                        • Figure 14: New product launches in the UK bread market, by top 20 claims, 2009-13
                                                                    • Market Size and Forecast

                                                                      • Key points
                                                                        • 2013 value growth ahead of 2012
                                                                          • Figure 15: UK retail value and volume sales of the total bread and baked goods market*, 2008-18
                                                                        • Forecast
                                                                          • Figure 16: UK retail value sales of the total bread and baked goods market*, 2008-18
                                                                          • Figure 17: UK retail volume sales of the total bread and baked goods market*, 2008-18
                                                                        • Forecast methodology
                                                                        • Segment Performance

                                                                          • Key points
                                                                            • Sweet baked goods and speciality bread enjoy the strongest growth in 2013
                                                                              • Figure 18: UK retail value sales of key bread and bakery sectors, 2011-13
                                                                            • Pre-packed bread loses share to sweet baked goods
                                                                              • Figure 19: UK retail volume sales of pre-packed bread, 2008-13
                                                                              • Figure 20: UK retail value sales of pre-packed bread, by type, 2011-13
                                                                            • Sweet baked goods segment is the star performer in 2013
                                                                              • Figure 21: UK retail value sales of sweet baked goods, by type, 2011-13
                                                                            • Speciality bread also outperforms the overall market
                                                                              • Figure 22: UK retail value sales of speciality bread, by type, 2011-13
                                                                            • In-store bakeries benefit from consumers’ demand for freshness and variety
                                                                              • Figure 23: Retail value sales of in-store bakeries’ bread and baked goods, 2011-13
                                                                          • Market Share

                                                                            • Key points
                                                                              • Top three manufacturers account for majority of sales
                                                                                • Figure 24: Leading manufacturers’ shares in the UK’s bread and baked goods market, 2012/13*
                                                                              • Warburtons increased its share across all three segments in 2012/13
                                                                                • Has Hovis missed the boat on sandwich alternatives?
                                                                                  • Kingsmill suffers from intense competition
                                                                                    • Health-focused brands fare well
                                                                                      • Figure 25: Leading brands in the UK pre-packed bread market, by value and volume, 2011/12 and 2012/13
                                                                                      • Figure 26: Leading brands in the UK speciality bread and rolls market, by value, 2011/12 and 2012/13
                                                                                      • Figure 27: Leading brands in the UK sweet baked goods market, by value, 2011/12 and 2012/13
                                                                                  • Companies and Products

                                                                                      • Allied Bakeries
                                                                                        • Background
                                                                                          • Product range
                                                                                            • Innovation
                                                                                              • Recent activity and promotion
                                                                                                • Brace's Bakery
                                                                                                  • Background
                                                                                                    • Product range
                                                                                                      • Recent activity and promotion
                                                                                                        • Aryzta
                                                                                                          • Background
                                                                                                            • Product range
                                                                                                              • Recent activity and promotion
                                                                                                                • Greggs
                                                                                                                  • Background
                                                                                                                    • Product range
                                                                                                                      • Recent activity and promotion
                                                                                                                        • McCambridge Group
                                                                                                                          • Background
                                                                                                                            • Product range
                                                                                                                              • Recent activity and promotion
                                                                                                                                • Premier Foods
                                                                                                                                  • Background
                                                                                                                                    • Product range
                                                                                                                                      • Innovation
                                                                                                                                        • Recent activity
                                                                                                                                          • Promotion
                                                                                                                                            • Warburtons
                                                                                                                                              • Background
                                                                                                                                                • Product range
                                                                                                                                                  • Innovation
                                                                                                                                                    • Recent activity and promotion
                                                                                                                                                    • Brand Communication and Promotion

                                                                                                                                                      • Key points
                                                                                                                                                        • Adspend increased by 5% in 2012
                                                                                                                                                          • Figure 28: Total above-the-line advertising expenditure in the UK’s bread and baked goods market, 2009-13*
                                                                                                                                                        • Allied Bakeries continued to lead adspend in 2012
                                                                                                                                                          • Figure 29: Total above-the-line advertising expenditure in the UK bread and baked goods market, by top 10 advertisers, 2009-13*
                                                                                                                                                        • Brands look to increase consumer engagement on social media
                                                                                                                                                          • TV continued to be preferred medium for bread manufacturers in 2012
                                                                                                                                                            • Figure 30: Total above-the-line advertising expenditure in the UK bread and baked goods market, by media type, 2009-13*
                                                                                                                                                        • Channels to Market

                                                                                                                                                          • Key points
                                                                                                                                                            • Supermarket giants benefit from success of in-store bakeries
                                                                                                                                                              • Figure 31: Retail distribution of bread and baked goods, 2009-12
                                                                                                                                                            • In-store bakeries’ success takes its toll on craft bakeries
                                                                                                                                                            • Consumer – Purchase and Usage of Bread and Baked Goods

                                                                                                                                                              • Key points
                                                                                                                                                                • Bread enjoys almost universal appeal
                                                                                                                                                                  • Figure 32: Types of bread bought in the last three months, June 2013
                                                                                                                                                                • Eight in ten adults buy baked goods
                                                                                                                                                                  • Figure 33: Types of baked goods bought in the last three months, June 2013
                                                                                                                                                                • Repertoires increase with income and household size
                                                                                                                                                                  • Figure 34: Repertoire of types of bread bought in the last three months, June 2013
                                                                                                                                                                  • Figure 35: Repertoire of types of baked goods bought in the last three months, June 2013
                                                                                                                                                                • Packaged sliced bread is eaten most frequently…
                                                                                                                                                                  • Figure 36: Frequency of eating bread and baked goods, June 2013
                                                                                                                                                                • …while other bread types and baked goods are more of a treat
                                                                                                                                                                • Consumer – Types of Packaged Bread Bought

                                                                                                                                                                  • Key points
                                                                                                                                                                    • White is by far the most popular packaged bread type
                                                                                                                                                                      • Figure 37: Types of packaged bread bought in the last three months, June 2013
                                                                                                                                                                  • Consumer – Eating Occasions for Bread and Baked Goods

                                                                                                                                                                    • Key points
                                                                                                                                                                      • Lunch at home is the most popular occasion for eating bread
                                                                                                                                                                        • Figure 38: Occasions for typically eating bread, June 2013
                                                                                                                                                                      • Only half of users eat bread for breakfast during the week
                                                                                                                                                                        • Baked goods are most commonly eaten as a snack in the afternoon
                                                                                                                                                                          • Figure 39: Occasions for typically eating baked goods, June 2013
                                                                                                                                                                      • Consumer – Choice Factors

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Freshness is the single most important factor for bread shoppers
                                                                                                                                                                            • Figure 40: Factors considered when buying bread and baked goods, June 2013
                                                                                                                                                                          • Younger consumers are more price-conscious
                                                                                                                                                                            • Technical nutritional information more relevant to younger consumers
                                                                                                                                                                            • Consumer – Attitudes towards Bread and Baked Goods

                                                                                                                                                                              • Key points
                                                                                                                                                                                • Variety packs should help to encourage usage of different types of bread
                                                                                                                                                                                  • Figure 41: Users’ attitudes towards bread and baked goods, June 2013
                                                                                                                                                                                • Consumers need to be educated better about bread’s health benefits
                                                                                                                                                                                  • Absence of artificial preservatives should be leveraged better as a USP
                                                                                                                                                                                    • Sweet bread could forge a role as a guilt-free treat
                                                                                                                                                                                    • Appendix – Market Size and Forecast

                                                                                                                                                                                        • Figure 42: Best- and worst-case forecasts for the UK bread and baked goods market, by value, 2013-18
                                                                                                                                                                                        • Figure 43: Best- and worst-case forecasts for the UK bread and baked goods market, by volume, 2013-18
                                                                                                                                                                                    • Appendix – Market Share

                                                                                                                                                                                        • Figure 44: Value sales of the leading manufacturers in the UK’s bread and baked goods market, 2011/12-12/13
                                                                                                                                                                                    • Appendix – Brand Communication and Promotion

                                                                                                                                                                                        • Figure 45: Total above-the-line advertising expenditure in the UK bread and baked goods market, by top 10 brands, 2009-13*
                                                                                                                                                                                    • Appendix – Consumer – Purchase and Usage of Bread and Baked Goods

                                                                                                                                                                                      • Purchase of bread and baked goods
                                                                                                                                                                                        • Figure 46: Types of bread bought in the last three months, June 2013
                                                                                                                                                                                        • Figure 47: Types of baked goods bought in the last three months, June 2013
                                                                                                                                                                                        • Figure 48: Most popular types of bread bought in the last three months, by demographics, June 2013
                                                                                                                                                                                        • Figure 49: Next most popular types of bread bought in the last three months, by demographics, June 2013
                                                                                                                                                                                        • Figure 50: Other types of bread bought in the last three months, by demographics, June 2013
                                                                                                                                                                                        • Figure 51: Most popular types of baked goods bought in the last three months, by demographics, June 2013
                                                                                                                                                                                        • Figure 52: Next most popular types of baked goods bought in the last three months, by demographics, June 2013
                                                                                                                                                                                        • Figure 53: Other types of baked goods bought in the last three months, by demographics, June 2013
                                                                                                                                                                                      • Repertoires of bread bought
                                                                                                                                                                                        • Figure 54: Repertoire of types of bread bought in the last three months, June 2013
                                                                                                                                                                                        • Figure 55: Repertoire of types of baked goods bought in the last three months, June 2013
                                                                                                                                                                                        • Figure 56: Repertoire of types of bread bought in the last three months, by demographics, June 2013
                                                                                                                                                                                        • Figure 57: Repertoire of types of baked goods bought in the last three months, by demographics, June 2013
                                                                                                                                                                                      • Frequency of eating bread and baked goods
                                                                                                                                                                                        • Figure 58: Frequency of eating bread/baked goods, June 2013
                                                                                                                                                                                        • Figure 59: Frequency of eating packaged sliced bread, by demographics, June 2013
                                                                                                                                                                                        • Figure 60: Frequency of eating packaged sliced bread, by demographics, June 2013 (continued)
                                                                                                                                                                                        • Figure 61: Frequency of eating other types of bread, by demographics, June 2013
                                                                                                                                                                                        • Figure 62: Frequency of eating other types of bread, by demographics, June 2013 (continued)
                                                                                                                                                                                        • Figure 63: Frequency of eating baked goods, by demographics, June 2013
                                                                                                                                                                                        • Figure 64: Frequency of eating baked goods, by demographics, June 2013 (continued)
                                                                                                                                                                                    • Appendix – Consumer – Types of Packaged Bread Bought

                                                                                                                                                                                        • Figure 65: Types of packaged sliced bread bought in the last three months, June 2013
                                                                                                                                                                                        • Figure 66: Most popular types of packaged sliced bread bought in the last three months, by demographics, June 2013
                                                                                                                                                                                    • Appendix – Consumer – Eating Occasions for Bread and Baked Goods

                                                                                                                                                                                        • Figure 67: Occasions for eating bread, June 2013
                                                                                                                                                                                        • Figure 68: Occasions for eating baked goods, June 2013
                                                                                                                                                                                        • Figure 69: Most popular occasions for eating bread, by demographics, June 2013
                                                                                                                                                                                        • Figure 70: Next most popular occasions for eating bread, by demographics, June 2013
                                                                                                                                                                                        • Figure 71: Most popular occasions for eating baked goods, by demographics, June 2013
                                                                                                                                                                                        • Figure 72: Next most popular occasions for eating baked goods, by demographics, June 2013
                                                                                                                                                                                    • Appendix – Consumer – Choice Factors

                                                                                                                                                                                        • Figure 73: Factors considered when choosing bread, June 2013
                                                                                                                                                                                        • Figure 74: Factors considered when choosing baked goods, June 2013
                                                                                                                                                                                        • Figure 75: Most popular factors considered when choosing bread, by demographics, June 2013
                                                                                                                                                                                        • Figure 76: Next most popular factors considered when choosing bread, by demographics, June 2013
                                                                                                                                                                                        • Figure 77: Other factors considered when choosing bread, by demographics, June 2013
                                                                                                                                                                                        • Figure 78: Most popular factors considered when choosing baked goods, by demographics, June 2013
                                                                                                                                                                                        • Figure 79: Next most popular factors considered when choosing baked goods, by demographics, June 2013
                                                                                                                                                                                        • Figure 80: Other factors considered when choosing baked goods, by demographics, June 2013
                                                                                                                                                                                    • Appendix – Consumer – Attitudes Towards Bread and Baked Goods

                                                                                                                                                                                        • Figure 81: Attitudes towards bread/baked goods, June 2013
                                                                                                                                                                                        • Figure 82: Agreement with the statement ‘Trying different types of bread appeals to me’, by demographics, June 2013
                                                                                                                                                                                        • Figure 83: Agreement with the statement ‘It is worth paying more for high quality bread’, by demographics, June 2013
                                                                                                                                                                                        • Figure 84: Agreement with the statement ‘It is easy to get bored with homemade sandwiches’, by demographics, June 2013
                                                                                                                                                                                        • Figure 85: Agreement with the statement ‘Bread is not a good food option for those trying to lose weight’, by demographics, June 2013
                                                                                                                                                                                        • Figure 86: Agreement with the statement ‘Other breakfast options are healthier than bread/baked goods’, by demographics, June 2013
                                                                                                                                                                                        • Figure 87: Agreement with the statement ‘I would be interested in trying high protein bread’, by demographics, June 2013
                                                                                                                                                                                        • Figure 88: Agreement with the statement ‘I would be interested in trying bread/baked goods containing fruit/vegetables’, by demographics, June 2013
                                                                                                                                                                                        • Figure 89: Agreement with the statement ‘Sliced bread contains too many artificial preservatives’, by demographics, June 2013
                                                                                                                                                                                        • Figure 90: Agreement with the statement ‘Alternative baked goods are better for you than standard bread’, by demographics, June 2013
                                                                                                                                                                                        • Figure 91: Agreement with the statement ‘Sweet-flavoured bread is a healthier alternative to other sweet treats’, by demographics, June 2013
                                                                                                                                                                                        • Figure 92: Agreement with the statement ‘There is not enough time to have bread/baked goods at home in the morning’, by demographics, June 2013
                                                                                                                                                                                        • Figure 93: Agreement with the statement ‘Miniature baked goods are more appealing to me than regular baked goods’, by demographics, June 2013

                                                                                                                                                                                    Companies Covered

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                                                                                                                                                                                    Bread and Baked Goods - UK - September 2013

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