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UK Bread and Baked Goods market report

“There is scope for retailers to bring bread and baked goods from local bakeries into stores through collaborations. This can help the grocery giants to show a community spirit, as well as improving their retail offering with genuinely artisan products. This can be teamed with a backstory about the bakers’ history, the ingredients used and the production processes, with this type of narrative helping to boost consumer engagement.”

– Emma Clifford, Senior Food and Drink Analyst

This report looks at the following areas:

  • More exciting NPD is needed in baked goods to appeal to the adventurous younger generation
  • Building up a ‘behind-the-scenes’ narrative for bread can win trust
  • The time is right for more ethical NPD centring on fairer pay for British farmers

However, it is not all doom and gloom. The widespread interest from consumers in a range of innovation and consumers’ appreciation of artisan baked products provides cause for optimism. NPD is set to be absolutely key for brands to maintain and grow consumer interest amid intensifying competition from other food products.

For the purposes of this Report, Mintel has used the following definitions:

Bread

Mintel’s definition follows the classification used in the baking industry, and includes a wide variety of both traditional British products and other breads not of UK origin. Traditional British breads include: white, brown and wholemeal, which may be sliced or unsliced, wrapped or unwrapped. A distinction is drawn between bread that is baked by plant/factory bakeries and stocked on grocery shelves (also called pre-packed bread), and bread that is baked by in-store bakers. Part-baked products are also included. Please see the Appendix for further information on the definition of bread.

Speciality bread

For the purposes of this Report, the speciality bread market is taken to include: bagels, baguettes, pittas, wraps, chapattis, naan breads, panini and garlic bread (brown, seeded, white and chilled).

Sweet baked goods

The sweet baked goods market includes: brioche loaves and rolls, croissants, crumpets, English muffins, farls, fruit loaves, hot cross buns, Irish bread, malt loaves, pains au chocolat and raisins, pikelets, potato cakes, scones, teacakes, American muffins, fruit buns and iced buns.

Doughnuts are also included in the market value as they are stocked with other baked goods.

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
        • Bread
          • Speciality bread
            • Sweet baked goods
            • Executive Summary

                • The market
                  • Figure 1: UK retail value sales of the total* bread and baked goods market, 2011-21
                • Volume sales expected to stabilise in 2017
                  • An end to deflation is set to see value sales hover round £3.8 billion
                    • Segment Performance
                      • Craft bakery looks to have stolen share from ISBs
                        • The decline in pre-packed bread accelerates in 2016
                          • Speciality breads fall into decline in 2016
                            • A tougher year for sweet baked goods in 2016
                              • Market factors
                                • Competition from eating out
                                  • Bread is losing out to other products in the breakfast occasion
                                    • No end to the rapid growth in gluten-free
                                      • Companies and brands
                                        • Warburtons holds its share
                                          • Figure 2: Leading brands in the UK pre-packed bread retail market, by value and volume, 2015/16*
                                        • Warburtons brings high protein to the mainstream bakery market
                                          • Ancient grains and seeds tap into ‘positive nutrition’
                                            • Adspend on bread and baked goods jumps 34% year on year
                                              • The consumer
                                                • Overall usage of bread is almost universal
                                                  • Figure 3: Types of bread bought in the past three months, May 2014, May 2015 and July 2016
                                                • Generational divide in purchasing of sweet baked goods
                                                  • Figure 4: Types of baked goods bought in the past three months, May 2014, May 2015 and June 2016
                                                • Ingrained usage of packaged sliced bread among over-55s
                                                  • Usage frequency of sweet baked goods drops
                                                    • Figure 5: Frequency of eating bread and baked goods in the past three months, May 2014, May 2015 and June 2016
                                                  • Low price is a priority for packaged sliced bread
                                                    • Figure 6: Important factors when choosing which bread/baked goods to buy, by type of product, July 2016
                                                  • World-inspired breads hold appeal among ABs
                                                    • More exciting NPD needed to attract young consumers
                                                      • Figure 7: Interest in innovation in bread and baked goods, July 2016
                                                    • Scope to encourage more snacking on baked goods through NPD
                                                      • Demand for locally-made artisanal bread
                                                        • Providing more information can help to build trust
                                                          • Figure 8: Attitudes towards bread and baked goods, July 2016
                                                        • What we think
                                                        • Issues and Insights

                                                          • More exciting NPD is needed in baked goods to appeal to the adventurous younger generation
                                                            • The facts
                                                              • The implications
                                                                • Building up a ‘behind-the-scenes’ narrative for bread can win trust
                                                                  • The implications
                                                                    • The time is right for more ethical NPD centring on fairer pay for British farmers
                                                                      • The facts
                                                                        • The implications
                                                                        • The Market – What You Need to Know

                                                                          • Craft bakery looks to have stolen share from ISBs
                                                                            • The decline in pre-packed bread accelerates in 2016
                                                                              • Speciality breads fall into decline in 2016
                                                                                • A tougher year for sweet baked goods in 2016
                                                                                  • Volume sales expected to stabilise in 2017
                                                                                    • An end to deflation is set to see value sales hover round £3.8 billion
                                                                                      • No end to the rapid growth in gluten-free
                                                                                        • Mixed health messages regarding carbohydrates
                                                                                          • Competition from eating out
                                                                                            • Bread is losing out to other products in the breakfast occasion
                                                                                            • Market Size and Forecast

                                                                                              • The rate of decline accelerates in 2016
                                                                                                • Figure 9: UK retail value and volume sales of the total* bread and baked goods market, 2011-21
                                                                                              • Volume sales expected to stabilise in 2017
                                                                                                  • Figure 10: UK retail volume sales of the total* bread and baked goods market, 2011-21
                                                                                                • An end to deflation is set to see value sales hover round £3.8 billion
                                                                                                  • Figure 11: UK retail value sales of the total* bread and baked goods market, 2011-21
                                                                                                • The impact of the EU Referendum
                                                                                                  • Figure 12: Alternative scenarios for the bread and baked goods market, 2016-2021
                                                                                                  • Figure 13: Alternative scenarios for the bread and baked goods market, at current prices, 2016-21
                                                                                                • Potential for bread to benefit from a “lunch box” effect
                                                                                                • Market Segmentation

                                                                                                  • Craft bakery looks to have stolen share from ISBs
                                                                                                    • Figure 14: UK retail value sales of bread and baked goods, 2014-16
                                                                                                  • The decline in pre-packed bread accelerates in 2016
                                                                                                    • Figure 15: UK retail value sales of pre-packed bread, by types, 2014-16
                                                                                                  • Speciality breads fall into decline in 2016
                                                                                                    • Figure 16: UK retail value sales of speciality bread, by type, 2014-16
                                                                                                  • A tougher year for sweet baked goods in 2016
                                                                                                    • Figure 17: UK retail sales of sweet baked goods, by type, 2014-16
                                                                                                • Market Drivers

                                                                                                  • No end to the rapid growth in gluten-free
                                                                                                    • A fifth of consumers limit their intake of carbs, Eatwell recommends more fibre
                                                                                                      • Competition from eating out
                                                                                                        • Bread is losing out to other products in the breakfast occasion
                                                                                                          • Supermarket price wars erode value in the market
                                                                                                            • Food waste is in the public eye
                                                                                                            • Companies and Brands – What You Need to Know

                                                                                                              • Warburtons holds its share
                                                                                                                • Major price cuts for Kingsmill
                                                                                                                  • Genius sales fall by almost a third
                                                                                                                    • Mixed performances within sweet baked goods
                                                                                                                      • Gains for Kingsmill and losses for Warburtons in speciality bread
                                                                                                                        • Warburtons brings high protein to the mainstream bakery market
                                                                                                                          • Kingsmill looks to the breakfast occasion
                                                                                                                            • Ancient grains and seeds tap into ‘positive nutrition’
                                                                                                                              • Adspend on bread and baked goods jumps 34% year on year
                                                                                                                                • Warburtons looks to surprising brand champions
                                                                                                                                • Market Share

                                                                                                                                  • Warburtons holds its share
                                                                                                                                    • Major price cuts for Kingsmill
                                                                                                                                      • Genius sales fall by almost a third
                                                                                                                                        • Figure 18: Leading brands in the UK pre-packed bread retail market, by value and volume, 2014/15 and 2015/16
                                                                                                                                        • Figure 19: Leading manufacturers in the UK pre-packed bread retail market, by value and volume, 2014/15 and 2015/16
                                                                                                                                      • Warburtons’ share of the sweet baked goods market edges up
                                                                                                                                          • Figure 20: Leading brands in the UK sweet baked goods retail market, by value, 2014/15 and 2015/16
                                                                                                                                          • Figure 21: Leading manufacturers in the UK sweet baked goods retail market, by value, 2014/15 and 2015/16
                                                                                                                                        • Gains for Kingsmill and losses for Warburtons in speciality bread
                                                                                                                                          • Figure 22: Leading brands in the UK speciality bread and rolls retail market, by value, 2014/15 and 2015/16
                                                                                                                                          • Figure 23: Leading manufacturers in the UK speciality bread and rolls retail market, by value, 2014/15 and 2015/16
                                                                                                                                      • Launch Activity and Innovation

                                                                                                                                        • A rebound in NPD from own-label in 2015
                                                                                                                                          • Figure 24: New product launches in the UK bread and bread products market, by brands vs private label, 2012-16
                                                                                                                                          • Figure 25: New product launches in the UK bread and bread products market, by top 10 companies, 2012-16
                                                                                                                                        • Gluten-free drops from its 2014 peak, but remains high
                                                                                                                                          • Figure 26: New product launches in the UK bread and bread products market with low/no/reduced allergen and gluten-free claims, 2012-16
                                                                                                                                        • Warburtons brings high protein to the mainstream bakery market
                                                                                                                                          • Kingsmill looks to the breakfast occasion
                                                                                                                                            • Ancient grains tap into ‘positive nutrition’…
                                                                                                                                              • …As do seeds
                                                                                                                                                • Vegetables bring flavour as well as added health credentials
                                                                                                                                                  • Snacking bread and baked goods
                                                                                                                                                    • Cheese becomes a more prominent ingredient in bread and baked goods
                                                                                                                                                    • Advertising and Marketing Activity

                                                                                                                                                      • Adspend on bread jumps 34% year on year
                                                                                                                                                        • Figure 27: Total above-the line, online display and direct mail advertising expenditure on bread and baked goods, by product type, 2012-16
                                                                                                                                                      • Warburtons significantly extends its lead in adspend
                                                                                                                                                        • Unexpected tie-ups see Stallone and The Muppets advocate the brand
                                                                                                                                                          • Social media plays a key part in anniversary marketing
                                                                                                                                                            • Figure 28: Recorded above-the-line, online display and direct mail total advertising expenditure on bread and baked goods, by advertiser, top 10, 2012-16*
                                                                                                                                                          • Premier Foods makes TV comeback for launch of Hovis Good Inside
                                                                                                                                                            • Adspend from Lidl triples year on year
                                                                                                                                                              • Activity from New York Bakery in 2016
                                                                                                                                                                • Nielsen Ad Intel coverage
                                                                                                                                                                • Brand Research

                                                                                                                                                                    • Brand map
                                                                                                                                                                      • Figure 29: Attitudes towards and usage of selected brands, September 2016
                                                                                                                                                                    • Key brand metrics
                                                                                                                                                                      • Figure 30: Key metrics for selected brands, September 2016
                                                                                                                                                                    • Brand attitudes: Hovis is the most trusted and reputable brand
                                                                                                                                                                      • Figure 31: Attitudes, by brand, September 2016
                                                                                                                                                                    • Brand personality: New York Bakery sets itself apart on the fun factor
                                                                                                                                                                      • Figure 32: Brand personality – macro image, September 2016
                                                                                                                                                                    • Warburtons is most likely to be seen as family-oriented
                                                                                                                                                                      • Figure 33: Brand personality – micro image, September 2016
                                                                                                                                                                    • Brand analysis
                                                                                                                                                                      • Warburtons has a strong positive reputation
                                                                                                                                                                        • Figure 34: User profile of Warburtons, September 2016
                                                                                                                                                                      • Hovis is seen as the most traditional brand
                                                                                                                                                                        • Figure 35: User profile of Hovis, September 2016
                                                                                                                                                                      • New York Bakery Co exudes most vibrancy and coolness
                                                                                                                                                                        • Figure 36: User profile of New York Bakery Co, September 2016
                                                                                                                                                                      • Burgen is seen as the healthiest brand
                                                                                                                                                                        • Figure 37: User profile of Burgen, September 2016
                                                                                                                                                                      • Kingsmill is seen to offer the best value for money
                                                                                                                                                                        • Figure 38: User profile of Kingsmill, September 2016
                                                                                                                                                                      • Genius is most closely associated with being ethical
                                                                                                                                                                        • Figure 39: User profile of Genius, September 2016
                                                                                                                                                                    • The Consumer – What You Need to Know

                                                                                                                                                                      • Overall usage of bread is almost universal
                                                                                                                                                                        • Generational divide in purchasing of sweet baked goods
                                                                                                                                                                          • Ingrained usage of packaged sliced bread among over-55s
                                                                                                                                                                            • Sugar concerns are likely causing problems for sweet baked goods
                                                                                                                                                                              • Low price is a priority for shoppers in packaged sliced bread
                                                                                                                                                                                • World-inspired breads hold appeal among ABs
                                                                                                                                                                                  • More exciting NPD needed to attract young consumers
                                                                                                                                                                                    • Scope to encourage more snacking on baked goods through NPD
                                                                                                                                                                                      • Demand for locally-made artisanal bread
                                                                                                                                                                                        • Providing more information can help to build trust
                                                                                                                                                                                        • Purchase and Usage of Bread and Baked Goods

                                                                                                                                                                                          • Eight in 10 adults buy packaged sliced bread
                                                                                                                                                                                            • Figure 40: Types of bread bought in the past three months, May 2014, May 2015 and July 2016
                                                                                                                                                                                          • Sugar concerns are likely causing problems for sweet baked goods
                                                                                                                                                                                            • Generational divide in purchasing of sweet baked goods
                                                                                                                                                                                              • Figure 41: Types of baked goods bought in the past three months, May 2014, May 2015 and June 2016
                                                                                                                                                                                            • Ingrained usage of packaged sliced bread among over-55s
                                                                                                                                                                                              • Young consumers are the most infrequent users of sliced bread
                                                                                                                                                                                                • Sweet baked goods use peaks among under-35s
                                                                                                                                                                                                  • Figure 42: Frequency of eating bread and baked goods in the past three months, May 2014, May 2015 and June 2016
                                                                                                                                                                                              • Choice Factors

                                                                                                                                                                                                • Low price is a priority for packaged sliced bread
                                                                                                                                                                                                  • A small minority look for British sourced ingredients
                                                                                                                                                                                                    • Inertia in the bread market
                                                                                                                                                                                                      • Freshly baked is the most important factor for other types of bread and baked goods
                                                                                                                                                                                                        • Figure 43: Important factors when choosing which bread/baked goods to buy, by type of product, July 2016
                                                                                                                                                                                                      • Indulgence trumps low-calorie for other types of bread and baked goods
                                                                                                                                                                                                      • Interest in Innovation

                                                                                                                                                                                                        • World-inspired breads hold appeal among ABs
                                                                                                                                                                                                          • Limited authentic NPD in world-inspired bread
                                                                                                                                                                                                            • Baked goods can tap into the vibrant street food trend
                                                                                                                                                                                                              • Baked-to-order baked goods can help to set ISBs apart
                                                                                                                                                                                                                • Figure 44: Interest in innovation in bread and baked goods, July 2016
                                                                                                                                                                                                              • More exciting NPD needed to attract young consumers
                                                                                                                                                                                                                • Figure 45: Interest in selected innovation in bread and baked goods, by age, July 2016
                                                                                                                                                                                                              • Sweet and savoury
                                                                                                                                                                                                                • Sourdough outside of standard bread
                                                                                                                                                                                                                  • Portmanteau products
                                                                                                                                                                                                                    • Interest in healthy NPD
                                                                                                                                                                                                                      • Marked interest in alternatives to refined sugar
                                                                                                                                                                                                                        • 22% of 25-34s would like bread/baked goods with colourful vegetables
                                                                                                                                                                                                                        • Attitudes towards Bread and Baked Goods

                                                                                                                                                                                                                          • Scope to encourage more snacking on baked goods through NPD
                                                                                                                                                                                                                            • Bread remains poorly suited for out-of-home, but strong interest in NPD
                                                                                                                                                                                                                              • Snack-sized products enjoy wide appeal
                                                                                                                                                                                                                                • Figure 46: Attitudes towards bread and baked goods, July 2016
                                                                                                                                                                                                                              • Demand for locally-made artisanal bread
                                                                                                                                                                                                                                • Under-25s keen on home deliveries
                                                                                                                                                                                                                                  • Providing more information can help to build trust
                                                                                                                                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                      • Abbreviations
                                                                                                                                                                                                                                        • Other definitions
                                                                                                                                                                                                                                          • Bread
                                                                                                                                                                                                                                            • Sweet baked goods
                                                                                                                                                                                                                                              • Speciality bread
                                                                                                                                                                                                                                                • Consumer research methodology
                                                                                                                                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                                                                                                                                    • Figure 47: Best- and worst-case forecasts for the total UK bread and baked goods market, by value, 2016-21
                                                                                                                                                                                                                                                    • Figure 48: Best- and worst-case forecasts for the total UK bread and baked goods market, by volume, 2016-21
                                                                                                                                                                                                                                                  • Forecast Methodology

                                                                                                                                                                                                                                                  Companies Covered

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