The Bottom Line:

  • Most subcategories experienced growth
  • Consumers want value and variety
  • Creativity can help producers cope with challenges

As recovery from the pandemic continues, U.S. consumers are slowly making their way back to the real world—which includes dining out at restaurants with friends and family and grabbing lunch at fast-food and quick-serve eateries near the office. They are still eating at home more than pre-COVID days, but they are interested in bread products that deliver more excitement, higher quality, and a relatively good value for their grocery dollar.

Market data

While fresh bread’s primary segment—center store breads—was flat last year, this year’s figures saw an increase of 11.5%, reaching sales of $10.2 billion, according to data from Circana OmniMarket Integrated Fresh, Chicago, the 52 weeks ending March 26, 2023. The most significant subcategory (center store sandwich bread, with $9.5 billion in sales for the 12-month period) was led by Grupo Bimbo, with $2.9 billion in sales, an increase of 12.6%. All the ranked brands also saw increases for the period, the healthiest climb being Lewis Bakeries, whose sales climbed 21% to $332 million. Perimeter breads also increased, rising by 10.9% to $1.51 billion.

Notably, center store sweet bread sales increased 30.1%, reaching $52.3 million. The top-performing brand in the subcategory was also the top-ranked—Flowers Foods increased sales 119% compared to the previous 12-month period, hitting $26.1 million. However, some saw significant decreases, including L&M Bakery (down 64.8% in the subcategory) and private label brands (a loss of 58.9%).

Another subcategory seeing increases: center store bagels, which increased by 16.7% to $1.5 billion. While Grupo Bimbo topped the list of ranked brands with $952.3 million in sales (up 14.2%), other brands saw bigger percentage increases, including Aunt Millies Bakeries (up 87% to $14.4 million) and Campbell’s (up 34.9% to $36.7 million). Perimeter bagels increased 17.2% to $294.9 million, with private label leading the way (up 18.3% to $289 million).

English muffins saw more modest increases than many other bread subcategories. Center store English muffins rose 6.6% to $845 million overall, with the biggest increase seen in flavored items (up 14.2% to $163.1 million); Grupo Bimbo topped that column with $134.1 million (up 17% compared to the previous 12-month period). Plain center store English muffins increased by 6.2% to $509.2 million in sales; Grupo Bimbo also reigned in that subcategory with $415.9 million in sales (up 5.2% from the previous 12 months.

Source: Circana OmniMarket™ Total Store View | Geography : Total US - Multi Outlet w/ C-Store (Grocery, Drug, Mass Market, Convenience, Military and Select Club & Dollar Retailers) | Time : Latest 52 Weeks Ending 03-26-23

Looking back

Labor issues continued to press bread producers to look for ways to cope over the 12-month period. According to Dana Strain, senior marketing manager of Bimbo Bakehouse (a Grupo Bimbo division), resourceful producers pivoted with their product offerings to deal with their workforce struggles.

“With the current state of our economy, the industry continues to face high employee turnover; that’s where labor-lean options like bulk, pre-packaged and thaw-and-serve formats come into play. These easy-to-prep, turnkey products require little to no employee training and are key for operators. Versatility is also another big factor when purchasing product and has become a top bakery attribute for operators. Versatile products allow operators to work to create variety within a streamlined menu and therefore, maximize freezer storage.”

“Bimbo Bakehouse’s premium buns and rolls come in a variety of convenient, labor-saving formats that work across dayparts to maximize any business’ efficiency,” Strain added.

Consumers over the last year craved flavors and variations on their center store bread offerings. Dan Letchinger, senior vice president of growth brands, Flowers Foods, said its Dave’s Killer Bread brand added a twist to its line of breakfast bread products.

“Last spring, Dave’s Killer Bread expanded our ever-popular breakfast line to include a savory breakfast bread,” Letchinger explains. “Taking a cue from popular flavor trends as well as our top-selling bagel item, we launched Epic Everything breakfast bread. This bread features all the onion and garlicky deliciousness of the ‘everything’ flavor that consumers love, but we’ve also added a uniquely DKB twist by incorporating chia, flax, and sesame seeds.”

Letchinger added that the Epic Everything bread is organic, non-GMO, and includes 12g of whole grains per serving.

Dave's Killer Bread
Courtesy of Flowers Foods

Looking forward

Inflation isn’t going away any time soon, according to economy watchers. Bread producers and retail stores should keep that price pinch in mind in coming months, counsels Brie Buenning, director of marketing with La Brea Bakery.

“Inflation and supply chain challenges are going to continue to steer the food industry, and consumers will continue to react to the financial constraints and supply limits that they bring,” she says.

Going forward, it is likely consumers will seek a blend of new experiences and tastes, premium-leaning items, and value for their spend in bread products. Neil Pittman, US sales director for St Pierre Bakery, advises that grasping what shoppers are on the hunt for will be key for producers in their mission do deliver what they seek.

“Understanding what ‘value’ means to shoppers is always key, but it is particularly important in the current climate,” Pittman says Bakery is a relatively low value category and with consumers watching what they spend, they are more discerning. It doesn’t mean they’re spending less, they are just more aware of what they perceive as value. This offers opportunity for premium brands. particularly in bakery and breakfast. The difference between an extra dollar in-store is minimal, but the difference it makes to the quality of a shoppers’ meal is much more significant.”

What’s more, he advises, delivering value prospect in bread products offers retailers opportunities for success in other parts of the store.

“Retailers offering a trade up in one area of the grocery store can drive increased sales in other areas, and that’s why getting the offering right in bakery is paramount for retailers,” he muses. “For example, a shopper who opts for a premium brioche burger bun from St Pierre is more likely to pair it with premium meats and cheeses. Our innovative merchandising and standout branding catches the attention of shoppers, and we know that St Pierre shoppers have a higher basket spend as a result of opting for our quality baked goods.” 

Also, Buenning advises, lingering effects from the pandemic can provide in-store bakery opportunities in coming months.

“The demand for nostalgic foods and consumers celebrating at home instead of restaurants is giving this space in the store another boost,” she says. “Bread and baked goods producers are reigning in assortment to ensure supply, variety, and consistency on the shelves.”


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