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Bread and Morning Goods - UK - February 2009

Food inflation coupled with the recession present the bread and morning goods market with challenges and opportunities.

In this report Mintel looks at what bread and morning goods people are buying, why they are buying them and which companies are most likely to get their custom. Mintel also throws the spotlight on what manufacturers can do to encourage higher purchasing levels and increase sales (valued at £3.9 billion in 2008).

Key report themes

  • The link between diet and health is tightening. How have bread and morning goods manufacturers risen to the challenge?

  • Currency devaluation and poor weather have pushed up wheat and flour prices. Has this negatively affected sales?

  • Own-label development is helping to shape the market. Has it gained market share at the expense of branded products?

  • The evolution of ethically traded and organic sectors is widespread in the food and drink industry. Is the bread and morning goods market tapping into this trend?

  • The recession has arrived. Will consumers cut down on premium bread to cut costs or does bread offer something else to consumers?

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Table of contents

  1. Issues in the Market

      • Key themes
        • Definitions
        • Future Opportunities

          • Twin peaks
            • On the doorstep
              • Entertaining at home
              • Market in Brief

                • Value growth bolstered by higher wheat prices
                  • NPD is thriving
                    • Demand fell
                      • Distribution
                        • The future of the market
                          • Comfort food and treats in the recession
                          • Internal Market Environment

                            • Key points
                              • Missed breakfast…
                                • …does not help the bakery market
                                  • New school regulations…
                                    • …have opened up opportunities
                                      • Lunchtime eating habits…
                                        • …shape trends in bread and morning goods
                                          • A switch from dieting to health
                                            • Figure 1: Attitudes towards dieting, 2006-08
                                          • The treat factor is still important
                                            • Prevalence of obesity in adults
                                              • Men – the future problem
                                                • Figure 2: Prevalence of obesity in adults, by gender, 2003 and 2010
                                              • Special dietary needs provide opportunities
                                                • Figure 3: Population suffering from food allergies, 2008
                                                • Figure 4: Innovation in bread and bread products suitable for special diets (% of bread launches), 2006-08
                                            • Broader Market Environment

                                              • Key points
                                                • Price of flour
                                                    • Figure 5: UK: Consumer Price Index: bread and cereals, January 2006-November 2008
                                                  • An ageing population
                                                    • Cost-conscious 25-34-year-olds
                                                      • Younger generations influence purchasing habits
                                                        • Working women create opportunities
                                                          • Figure 6: Working status of women, 2004-08
                                                          • Figure 7: Working status of women, by social grade and presence of children, 2007
                                                        • Student numbers rise
                                                          • Figure 8: Number of students in Higher Education institutions, 2000/01-2005/06
                                                        • Compact loaves for smaller households
                                                          • Figure 9: Trends in UK household size, 2003-13
                                                      • Strengths and Weaknesses in the Market

                                                        • Strengths
                                                          • Weaknesses
                                                          • Who’s Innovating?

                                                            • Key points
                                                              • Own-label dominates NPD in 2008
                                                                • Figure 10: NPD in bread and bread products, % own-label vs branded, 2003-08
                                                              • More sophisticated own-label offerings
                                                                • Value lines extended
                                                                  • On the go
                                                                    • Leading product positioning is additive-free
                                                                      • Figure 11: Top five ways for positioning new product launches in bread and morning goods, 2006-08
                                                                    • Healthy launches by positioning
                                                                      • Figure 12: Healthy bread and morning goods launches, by positioning, 2008*
                                                                    • Focus on allergen reduction and gluten intolerance
                                                                      • Low-fat claims for a wider variety of products
                                                                        • Specific health claims
                                                                          • Organic products proliferate
                                                                            • Lunchbox products
                                                                              • Overseas inspiration
                                                                                • All things Italian
                                                                                  • Size matters
                                                                                    • Nuts and seeds
                                                                                    • Market Size and Forecast

                                                                                      • Key points
                                                                                        • Total value sales up 30%
                                                                                          • Figure 13: UK retail value sales of bread and morning goods, 2003-13
                                                                                        • Tapping into evolving trends
                                                                                          • Bread out performing morning goods
                                                                                            • Figure 14: UK retail value sales of bread and morning goods, by sector, 2003-13
                                                                                          • The future of the market
                                                                                            • Forecast
                                                                                              • Healthy but slower growth
                                                                                                • Factors in the forecast
                                                                                                • Segment Performance

                                                                                                  • Key points
                                                                                                    • Bread
                                                                                                      • Volume sales of bread are slipping
                                                                                                        • Figure 15: UK retail volume and value sales of bread, 2003-13
                                                                                                        • Figure 16: UK retail volume sales of bread, by type, 2006-08
                                                                                                      • Trading up boosts value sales of bread
                                                                                                        • Figure 17: UK retail value sales of bread, by type, 2006-08
                                                                                                      • Sliced white bread making a comeback
                                                                                                        • Figure 18: UK retail volume sales of white bread, by type, 2006-08
                                                                                                        • Figure 19: UK retail value sales of white bread, by type, 2006-08
                                                                                                      • Brown bread boosted by its health credentials
                                                                                                        • Figure 20: UK retail volume and value sales of brown bread, by type, 2006-08
                                                                                                      • Speciality bread selling well
                                                                                                        • Figure 21: UK retail volume and value sales of continental and speciality bread, by type, 2006-08
                                                                                                      • Flavour sensation
                                                                                                        • Figure 22: UK retail value sales of speciality/ethnic bread, by type, 2006-08
                                                                                                      • Plant bakeries dominate
                                                                                                        • Figure 23: UK retail value sales of plant bread, by type, 2006-08
                                                                                                        • Figure 24: Share of plant bread within UK retail value sales of bread, by type, 2006-08
                                                                                                      • Morning goods
                                                                                                        • Figure 25: UK retail value sales of morning goods, 2003-13
                                                                                                      • Plant bakers focus on morning goods
                                                                                                        • Figure 26: UK retail value sales of morning goods, by source, 2006-08
                                                                                                      • Seeking solace in comfort foods
                                                                                                        • Figure 27: UK retail value sales of rolls, bakery snacks and foreign recipe products, by source, 2006-08
                                                                                                      • Healthy roll out
                                                                                                        • Figure 28: UK retail value sales of rolls, by type, 2006-08
                                                                                                      • Foreign recipe goods and fruited products
                                                                                                        • Figure 29: UK retail value sales of bakery snacks and foreign recipe products, by type, 2006-08
                                                                                                      • Bagels bite
                                                                                                        • Warm as toast
                                                                                                        • Brand Shares

                                                                                                          • Key points
                                                                                                            • Brand shares – bread
                                                                                                              • Figure 30: Brand shares in plant-produced bread, 2006-08
                                                                                                            • Investment pays off for Warburtons
                                                                                                              • Premier Foods rescues Hovis and Nimble
                                                                                                                • Own-label raises its game
                                                                                                                  • Brand shares – morning goods
                                                                                                                    • Figure 31: Brand shares in plant-produced morning goods, 2006-08
                                                                                                                  • Warburtons warms up the category
                                                                                                                    • Own-label dominates NPD
                                                                                                                      • Slow growth for value brands
                                                                                                                        • Niche offerings
                                                                                                                        • Companies and Products

                                                                                                                          • Key points
                                                                                                                            • Brand map
                                                                                                                              • Figure 32: Brand map of bread and morning goods, 2009
                                                                                                                            • Allied Bakeries
                                                                                                                              • Next steps
                                                                                                                                • Premier Foods
                                                                                                                                  • Warburtons
                                                                                                                                    • Others
                                                                                                                                      • Frank Robert & Sons Ltd
                                                                                                                                        • Braces Bakery Ltd
                                                                                                                                          • Greggs plc
                                                                                                                                            • The Food Doctor
                                                                                                                                              • Mission Foods
                                                                                                                                                • Bakehouse
                                                                                                                                                  • BakeMark
                                                                                                                                                    • Cuisine de France
                                                                                                                                                      • Fine Lady Bakeries
                                                                                                                                                        • Inter Link Foods/McCambridge
                                                                                                                                                          • Kitchen Range Foods
                                                                                                                                                            • Krispy Kreme
                                                                                                                                                              • Maple Leaf Foods
                                                                                                                                                              • Brand Communication and Promotion

                                                                                                                                                                • Key points
                                                                                                                                                                  • Adspend on bread and morning goods
                                                                                                                                                                    • Figure 33: Main monitored media advertising spend on bakery goods, 2004-08
                                                                                                                                                                  • Low priority for advertising
                                                                                                                                                                    • Advertising by media
                                                                                                                                                                      • Figure 34: Main monitored media advertising spend on bread and bakeries, by media type, January-November 2008
                                                                                                                                                                    • More extensive media coverage
                                                                                                                                                                      • Adspend by advertiser
                                                                                                                                                                        • Figure 35: Main monitored media advertising spend on bread and bakeries, by advertiser, 2004-08
                                                                                                                                                                      • Allied Bakeries raises profile
                                                                                                                                                                        • Supermarkets advertise on price
                                                                                                                                                                          • Low priority for morning goods
                                                                                                                                                                            • Advertising themes
                                                                                                                                                                              • Family goodness
                                                                                                                                                                                • Tradition
                                                                                                                                                                                  • Flavour and texture
                                                                                                                                                                                    • Discount/price
                                                                                                                                                                                    • Channels to Market

                                                                                                                                                                                      • Key points
                                                                                                                                                                                        • Grocery multiples increase share at expense of smaller outlets
                                                                                                                                                                                          • Figure 36: UK retail sales of bread and morning goods, by outlet type, 2006-08
                                                                                                                                                                                        • Grocery multiples dominate
                                                                                                                                                                                          • Craft bakers get crafty
                                                                                                                                                                                            • Bake-off heats up
                                                                                                                                                                                              • Retailer activity
                                                                                                                                                                                                • Asda
                                                                                                                                                                                                  • Co-op
                                                                                                                                                                                                    • Marks & Spencer
                                                                                                                                                                                                      • Morrisons
                                                                                                                                                                                                        • Sainsbury’s
                                                                                                                                                                                                          • Tesco
                                                                                                                                                                                                            • Waitrose
                                                                                                                                                                                                            • Consumption of Bakery Products

                                                                                                                                                                                                              • Key points
                                                                                                                                                                                                                  • Figure 37: Types of morning goods eaten in the last six months, November 2008
                                                                                                                                                                                                                • Roll over
                                                                                                                                                                                                                  • From continental to international recipes
                                                                                                                                                                                                                    • Warm as toast
                                                                                                                                                                                                                      • Indulgent treats are still important
                                                                                                                                                                                                                        • Ready-made, not part-baked
                                                                                                                                                                                                                          • Morning goods/bakery snacks – consumption by gender
                                                                                                                                                                                                                            • Figure 38: Types of morning goods eaten in the last six months, by gender, November 2008
                                                                                                                                                                                                                          • Male/female divide
                                                                                                                                                                                                                            • Socio-economics divide
                                                                                                                                                                                                                              • Location, location, location
                                                                                                                                                                                                                                • Further potential for Marks & Spencer
                                                                                                                                                                                                                                  • Morning goods – preference by age
                                                                                                                                                                                                                                    • Figure 39: Types of morning goods eaten in the last six months, by age, November 2008
                                                                                                                                                                                                                                • Consumption of Bread

                                                                                                                                                                                                                                  • Key points
                                                                                                                                                                                                                                    • Trends in consumption of bread
                                                                                                                                                                                                                                      • Figure 40: Frequency of eating bread, 2004-08
                                                                                                                                                                                                                                    • Competition from other products intensifies
                                                                                                                                                                                                                                      • White v brown
                                                                                                                                                                                                                                        • Heavy consumption correlated with age and socio-economic group
                                                                                                                                                                                                                                          • Figure 41: Demographic profile of daily bread consumers, 2008
                                                                                                                                                                                                                                        • Types of bread eaten
                                                                                                                                                                                                                                          • Figure 42: Type of bread eaten most often, 2004-08
                                                                                                                                                                                                                                        • Re-evaluation of white bread
                                                                                                                                                                                                                                          • Innovation boosts consumption
                                                                                                                                                                                                                                            • Bread consumed in the last six months
                                                                                                                                                                                                                                              • Figure 43: Types of bread eaten in the last six months, November 2008
                                                                                                                                                                                                                                            • Foreign = special
                                                                                                                                                                                                                                              • Nutty about health
                                                                                                                                                                                                                                                • Ethical concerns fall flat
                                                                                                                                                                                                                                                  • Sliced for convenience
                                                                                                                                                                                                                                                    • Figure 44: Types of bread eaten in the last six months, by age, November 2008
                                                                                                                                                                                                                                                  • Age – a key factor
                                                                                                                                                                                                                                                    • Socio-demographics and supermarkets
                                                                                                                                                                                                                                                      • Specialist free-from bread
                                                                                                                                                                                                                                                      • Consumer Attitudes Towards Bread

                                                                                                                                                                                                                                                        • Key points
                                                                                                                                                                                                                                                          • Attitudes towards bread
                                                                                                                                                                                                                                                            • Figure 45: Attitudes towards bread, November 2008
                                                                                                                                                                                                                                                          • Eating bread for health reasons
                                                                                                                                                                                                                                                            • Money is less of an issue
                                                                                                                                                                                                                                                              • Dichotomy over branding
                                                                                                                                                                                                                                                                • Attitudes – key demographics
                                                                                                                                                                                                                                                                  • Figure 46: Attitudes towards bread, by key demographics, November 2008
                                                                                                                                                                                                                                                                • Health vs cost
                                                                                                                                                                                                                                                                  • Who shops where?
                                                                                                                                                                                                                                                                  • Further Analysis

                                                                                                                                                                                                                                                                    • Key points
                                                                                                                                                                                                                                                                      • Number of types of bread
                                                                                                                                                                                                                                                                        • Figure 47: Number of types of bread eaten in the last six months, November 2008
                                                                                                                                                                                                                                                                      • Seeking variety
                                                                                                                                                                                                                                                                        • Varied buying habits
                                                                                                                                                                                                                                                                          • Number of types of bread, by type
                                                                                                                                                                                                                                                                            • Figure 48: Number of types of bread eaten in the last six months, by type, November 2008
                                                                                                                                                                                                                                                                          • Health v authenticity
                                                                                                                                                                                                                                                                            • Number of types of morning goods
                                                                                                                                                                                                                                                                              • Figure 49: Number of types of bakery products and morning goods eaten, November 2008
                                                                                                                                                                                                                                                                            • Wide variety in diet
                                                                                                                                                                                                                                                                              • All or nothing?
                                                                                                                                                                                                                                                                                • Number of types of bakery products – by type
                                                                                                                                                                                                                                                                                  • Figure 50: Number of types of bakery products eaten, by type, November 2008
                                                                                                                                                                                                                                                                                • A roll and a crumpet
                                                                                                                                                                                                                                                                                  • Target groups
                                                                                                                                                                                                                                                                                    • Figure 51: Target groups on attitudes towards bread, November 2008
                                                                                                                                                                                                                                                                                  • Who are they?
                                                                                                                                                                                                                                                                                    • Apathetic/Habitual buyers (34%)
                                                                                                                                                                                                                                                                                      • Price conscious (20%)
                                                                                                                                                                                                                                                                                        • Health motivated (28%)
                                                                                                                                                                                                                                                                                          • Quality concerned (18%)
                                                                                                                                                                                                                                                                                            • Gender debate
                                                                                                                                                                                                                                                                                              • Target groups – by attitudinal statements
                                                                                                                                                                                                                                                                                                • Figure 52: Target groups, by attitudinal statements, November 2008
                                                                                                                                                                                                                                                                                              • What characterises buyer type?
                                                                                                                                                                                                                                                                                                • Target groups – by type of bread
                                                                                                                                                                                                                                                                                                  • Figure 53: Target groups, by types of bread eaten in the last six months, November 3008
                                                                                                                                                                                                                                                                                                • Buyer types and their preferences
                                                                                                                                                                                                                                                                                                  • Target groups – by type of bakery product
                                                                                                                                                                                                                                                                                                    • Figure 54: Target groups, by bakery products (not including sliced bread) eaten, November 2008
                                                                                                                                                                                                                                                                                                  • Conforming to type
                                                                                                                                                                                                                                                                                                    • Target groups – by number of types of bread
                                                                                                                                                                                                                                                                                                      • Figure 55: Target groups, by number of types of bread eaten in the last six months, November 2008
                                                                                                                                                                                                                                                                                                    • Shopping around
                                                                                                                                                                                                                                                                                                      • Target groups – by number of types of bakery products
                                                                                                                                                                                                                                                                                                        • Figure 56: Target groups, by number of types of bakery products/morning goods eaten, November 2008
                                                                                                                                                                                                                                                                                                      • Apathy limits choice
                                                                                                                                                                                                                                                                                                      • Appendix

                                                                                                                                                                                                                                                                                                        • Consumer research
                                                                                                                                                                                                                                                                                                          • Abbreviations
                                                                                                                                                                                                                                                                                                          • Appendix – Internal Market Environment

                                                                                                                                                                                                                                                                                                              • Figure 57: Population suffering from food allergies, by demographics, 2008
                                                                                                                                                                                                                                                                                                          • Appendix – Broader Market Environment

                                                                                                                                                                                                                                                                                                              • Figure 58: Trends and projections in UK household size, 2003-13
                                                                                                                                                                                                                                                                                                              • Figure 59: Trends and projections in UK population, by age group, 2003-13
                                                                                                                                                                                                                                                                                                              • Figure 60: Trends and projections in UK population, by socio-economic group, 2003-13
                                                                                                                                                                                                                                                                                                          • Appendix – Consumption of Bakery Products

                                                                                                                                                                                                                                                                                                              • Figure 61: Consumption of bakery products, by demographic sub-group, November 2008
                                                                                                                                                                                                                                                                                                              • Figure 62: Consumption of bakery products, by demographic sub-group, November 2008
                                                                                                                                                                                                                                                                                                              • Figure 63: Consumption of bakery products, by demographic sub-group, November 2008
                                                                                                                                                                                                                                                                                                          • Appendix – Consumption of Bread

                                                                                                                                                                                                                                                                                                              • Figure 64: Frequency of any bread consumption, by demographics, 2008
                                                                                                                                                                                                                                                                                                              • Figure 65: Consumption of bread in the last six months, by demographic sub-group, November 2008
                                                                                                                                                                                                                                                                                                              • Figure 66: Consumption of bread in the last six months, by demographic sub-group, November 2008
                                                                                                                                                                                                                                                                                                          • Appendix – Consumer Attitudes Towards Bread

                                                                                                                                                                                                                                                                                                              • Figure 67: Attitudes towards bread, by demographic sub-group, November 2008
                                                                                                                                                                                                                                                                                                              • Figure 68: Attitudes towards bread, by demographic sub-group, November 2008
                                                                                                                                                                                                                                                                                                          • Appendix – Further Analysis

                                                                                                                                                                                                                                                                                                              • Figure 69: Number of types of bread eaten in the last six months, by demographic sub-group, November 2008
                                                                                                                                                                                                                                                                                                              • Figure 70: Number of types of bakery products eaten, by demographic sub-group, November 2008
                                                                                                                                                                                                                                                                                                              • Figure 71: Target groups on attitudes towards bread, by demographic sub-group, November 2008

                                                                                                                                                                                                                                                                                                          Companies Covered

                                                                                                                                                                                                                                                                                                          • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                                                                                                                                                                                          • Allied Bakeries Ltd
                                                                                                                                                                                                                                                                                                          • Asda Group Ltd
                                                                                                                                                                                                                                                                                                          • Associated British Foods Plc
                                                                                                                                                                                                                                                                                                          • Bakehouse
                                                                                                                                                                                                                                                                                                          • Brakes Group
                                                                                                                                                                                                                                                                                                          • British Bakeries Ltd
                                                                                                                                                                                                                                                                                                          • British Market Research Bureau (BMRB)
                                                                                                                                                                                                                                                                                                          • Burger King UK Ltd
                                                                                                                                                                                                                                                                                                          • Co-operative Group
                                                                                                                                                                                                                                                                                                          • Coca-Cola GB
                                                                                                                                                                                                                                                                                                          • Daily Express
                                                                                                                                                                                                                                                                                                          • Daily Mail
                                                                                                                                                                                                                                                                                                          • Daily Mirror (The)
                                                                                                                                                                                                                                                                                                          • Daily Star (The)
                                                                                                                                                                                                                                                                                                          • Department of Health
                                                                                                                                                                                                                                                                                                          • Discovery Foods Ltd
                                                                                                                                                                                                                                                                                                          • Frank Roberts & Sons
                                                                                                                                                                                                                                                                                                          • Government Actuary's Department (GAD)
                                                                                                                                                                                                                                                                                                          • Greggs Plc
                                                                                                                                                                                                                                                                                                          • Gruma Corporation
                                                                                                                                                                                                                                                                                                          • Harrods Group Total
                                                                                                                                                                                                                                                                                                          • Higher Education Statistics Agency
                                                                                                                                                                                                                                                                                                          • Inter Link Foods Plc
                                                                                                                                                                                                                                                                                                          • J. Sainsbury
                                                                                                                                                                                                                                                                                                          • Kraft Foods UK
                                                                                                                                                                                                                                                                                                          • Krispy Kreme Doughnuts Inc.
                                                                                                                                                                                                                                                                                                          • Lidl (UK)
                                                                                                                                                                                                                                                                                                          • Maple Leaf Foods
                                                                                                                                                                                                                                                                                                          • Marks & Spencer
                                                                                                                                                                                                                                                                                                          • Nestlé UK Ltd
                                                                                                                                                                                                                                                                                                          • New York Bagel Company
                                                                                                                                                                                                                                                                                                          • Office for National Statistics
                                                                                                                                                                                                                                                                                                          • Premier Foods plc
                                                                                                                                                                                                                                                                                                          • Pride Valley Foods Ltd
                                                                                                                                                                                                                                                                                                          • Rachel's Organic Dairy
                                                                                                                                                                                                                                                                                                          • Soil Association
                                                                                                                                                                                                                                                                                                          • Somerfield
                                                                                                                                                                                                                                                                                                          • Speedibake
                                                                                                                                                                                                                                                                                                          • Tesco Plc
                                                                                                                                                                                                                                                                                                          • The Food Doctor Ltd
                                                                                                                                                                                                                                                                                                          • The Sun
                                                                                                                                                                                                                                                                                                          • Waitrose
                                                                                                                                                                                                                                                                                                          • Warburtons
                                                                                                                                                                                                                                                                                                          • Weight Watchers Ltd. (UK)
                                                                                                                                                                                                                                                                                                          • Wm Morrison Supermarkets

                                                                                                                                                                                                                                                                                                          Bread and Morning Goods - UK - February 2009

                                                                                                                                                                                                                                                                                                          US $2,583.33 (Excl.Tax)