Bakery Products 2012 MARKET SECTORS White Bread Brown and Wholemeal Bread Speciality Breads Bakery Products

MARKET TRENDS Economic Crisis Growing Consumption of Brown Bread Rising Input Costs Popularity of Foreign Bakery Goods ECONOMIC TRENDS MARKET POSITION The UK Overseas Market Size THE TOTAL MARKET BY MARKET SECTOR Traditional Bread Speciality Breads Bakery Products OVERSEAS TRADE General Overview Exports Imports Strengths, Weaknesses, Opportunities and Threats STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

MARKET SECTORS

The two main sectors of the market are bread and bakery products, which can themselves be subdivided on the basis of several different factors.

Bread

This report divides segments:

the bread sector into three

white bread

brown and wholemeal bread

ethnic and bread.

speciality

The white bread and brown and wholemeal bread sectors are represented by traditional bread shapes, some of which are described below. Both standard and premium sliced wrapped loaves are included. The division between white and brown/wholemeal is based on flour type: white bread made from flour, that contains only the endosperm, or central section, of the grain (approximately 75% of the whole grain) brown bread made from flour representing approximately 85% of the whole grain, containing a crude fibre content derived from wheat of no less than 0.6%, and with an ingredient flour other than wholemeal

wholemeal bread made from the entire wheat grain, with nothing removed.

There are numerous varieties in terms of bread shape, with regional preferences often apparent. Some of the more common shapes are: a tin loaf

sandwich loaf rectangular slices

with a flat top, giving

even,

split tin a long, tin-baked loaf giving a large number of small slices farmhouse similar to a split tin, but shorter and fatter for larger slices

batch loaf tall loaves baked without tins by placing them close together in the oven so that the sides touch; they are split apart after baking, and have only top and bottom crusts cob a round loaf, often made with a combination of brown and white flours, usually with a sprinkling of crushed wheat on top Vienna a white baton-shaped loaf, usually enriched with milk, with a glazed, crisp crust and sometimes topped with poppy seeds.

White Bread

The white bread sector also include softgrain bread, which is made from white flour with additional grains of softened rye and wheat. During 2001, a new type of white bread, made partly with wholemeal flour, was introduced by some major manufacturers.

Brown and Wholemeal Bread

Variations within the brown and wholemeal bread sector include:

wheatgerm bread, which has an added processed wheatgerm content of no less than 10%

granary bread, made from granary flour (a trademark of the Hovis brand), which includes kibbled and whole grains.

Ethnic and Speciality Bread

The ethnic and speciality bread sector include breads from continental Europe and further afield, including the Middle East and Asia. These

breads are made with a variety of different flours and methods, and include: naan a white-flour bread, lightly leavened by a natural yeast starter developed from airborne yeasts pitta the best-selling ethnic bread in the UK, pitta is a flat bread from

Greece and the Middle East; it is generally made from white flour, but is available in wholemeal variants, is usually oval in shape, and can form a pocket for fillings focaccia a light, soft Italian bread made from white flour with olive oil, and often with added flavourings, such as garlic, herbs, olives or sun-dried tomatoes ciabatta a flat, crusty white Italian bread, made with virgin olive oil and with large holes in the dough baguette a long white crusty

baton loaf

(also known as a

French stick) made with special flour, it has a very short shelf life because it goes stale very quickly cholla a braided Jewish loaf traditionally eaten on the Sabbath and at festival times, enriched with butter and eggs to give a creamy coloured crumb and a very fine texture.

Bread making Doughs are usually baked, but in some cuisines breads are steamed (e.g., mantou), fried (e.g., puri), or baked on an unoiled frying pan (e.g., tortillas). It may be leavened or unleavened (e.g. matzo). Salt, fat and leavening agents such as yeast and baking soda are common ingredients, though bread may contain other ingredients, such as milk,egg, sugar, spice, fruit (such as raisins), vegetables (such as onion), nuts (such as walnuts) or seeds (such as poppy). Referred to colloquially as the "staff of life", bread has been prepared for at least 30,000 years. The development of leavened bread can probably also be traced to prehistoric times. Sometimes, the word bread refers to a sweetened loaf cake, often containing appealing ingredients like dried fruit, chocolate chips, nuts or spices, such as pumpkin bread, banana bread or gingerbread. Fresh bread is prized for its taste, aroma, quality, appearance and texture. Retaining its freshness is important to keep it appetizing. Bread that has stiffened or dried past its prime is said to be stale. Modern bread is sometimes wrapped in paper or plastic film or stored in a container such as a breadbox to reduce drying. Bread that is kept in warm, moist environments is prone to the growth of mold. Bread kept at low temperatures, in a refrigerator for example, will develop mold growth more slowly than bread kept at room temperature, but will turn stale quickly due to retrogradation. The soft, inner part of bread is known to bakers and other culinary professionals as the crumb, which is not to be confused with small bits of bread that often fall off, calledcrumbs. The outer hard portion of bread is called the crust.

Formulation Professional baker recipes are stated using a notation called baker's percentage. The amount of flour is denoted to be 100%, and the amounts of the other ingredients are expressed as a percentage of that amount by weight. Measurement by weight is more accurate and consistent than measurement by volume, particularly for dry ingredients. The proportion of water to flour is the most important measurement in a bread recipe, as it affects texture and crumb the most. Hard US wheat flours absorb about 62% water, while softer wheat flours absorb about 56%.[14] Common table breads made from these doughs result in a finely textured, light bread. Most artisan bread formulas contain anywhere from 60 to 75% water. In yeast breads, the higher water percentages result in more CO2 bubbles and a coarser bread crumb. One pound (450 g) of flour will yield a standard loaf of bread or two French loaves. Calcium propionate is commonly added by commercial bakeries to retard the growth of molds. Flour Flour is a product made from grain that has been ground to a powdery consistency. Flour provides the primary structure to the final baked bread. While wheat flour is most commonly used for breads, flours made from rye, barley, maize, and other grains are also commonly available. Each of these grains provides the starch and protein needed to form bread.

Wafers of crisp bread The protein content of the flour is the best indicator of the quality of the bread dough and the finished bread. While bread can be made from all-purpose wheat flour, a specialty bread flour, containing more protein (1214%), is recommended for high-quality bread. If one uses a flour with a lower protein content (911%) to produce bread, a shorter mixing time will be required to develop gluten strength properly. An extended mixing time leads to oxidization of the dough, which gives the finished product a whiter crumb, instead of the cream color preferred by most artisan bakers.[15] Wheat flour, in addition to its starch, contains three water-soluble protein groups (albumin, globulin, and proteoses) and two water-insoluble protein groups (glutenin and gliadin). When flour is mixed with water, the water-soluble proteins dissolve, leaving the glutenin and gliadin to form the structure of the resulting bread. When relatively dry dough is worked by kneading, or wet dough is allowed to rise for a long time (see no-knead bread), the glutenin forms strands of long, thin, chainlike molecules, while the shorter gliadin forms bridges between the strands of glutenin. The resulting networks of strands produced by these two proteins are known as gluten. Gluten development improves if the dough is allowed to autolyse. Liquids Water, or some other liquid, is used to form the flour into a paste or dough. The weight of liquid required varies between recipes, but a ratio of 3 parts liquid to 5 parts flour is common for yeast breads.[16] Recipes that use steam as the primary leavening method may have a liquid content in excess of 1 part liquid to 1 part flour. Instead of water, other types of liquids, such as dairy products, fruit juices, or beer, may be used; they contribute additional sweeteners, fats, or leavening components, as well as water. Leavening

A dough trough once used for leavening bread from Aberdour Castle, Fife, Scotland.

Leavening is the process of adding gas to a dough before or during baking to produce a lighter, more easily chewed bread. Most bread consumed in the West is leavened. Unleavened breads have symbolic importance in Judaism and Christianity. Jews consume unleavened bread called matzo during Passover. Roman Catholic and some Protestant Christians consume unleavened bread during the Christian liturgy when they celebrate the Eucharist, a rite derived from the narrative of the Last Supper when Jesusbroke bread with his disciples, perhaps during a Passover Seder. In contrast, Orthodox Christians always use leavened bread during their liturgy. Chemical leavening A simple technique for leavening bread is the use of gas-producing chemicals. There are two common methods. The first is to usebaking powder or a self-rising flour that includes baking powder. The second is to include an acidic ingredient such as buttermilkand add baking soda; the reaction of the acid with the soda produces gas. Chemically leavened breads are called quick breads and soda breads. This method is commonly used to make muffins, pancakes, American-style biscuits, and quick breads such as banana bread. Yeast Main article: Baker's yeast Many breads are leavened by yeast. The yeast most commonly used for leavening bread is Saccharomyces cerevisiae, the same species used for brewing alcoholic beverages. This yeast ferments some of the carbohydrates in the flour, including any sugar, producing carbon dioxide. Most bakers in the U.S. leaven their dough with commercially produced baker's yeast. Baker's yeast has the advantage of producing uniform, quick, and reliable results, because it is obtained from a pure culture. Many artisan bakers produce their own yeast by preparing a growth culture that they then use in the making of bread. When this culture is kept in the right conditions, it will continue to grow and provide leavening for many years. Both the baker's yeast and the sourdough methods of baking bread follow the same pattern. Water is mixed with flour, salt and the leavening agent (baker's yeast orsourdough starter). Other additions (spices, herbs, fats, seeds, fruit, etc.) are not needed to bake bread, but are often used. The mixed dough is then allowed to rise one or more times (a longer rising time results in more flavor, so bakers often "punch down" the dough and let it rise again), then loaves are formed, and (after an optional final rising time) the bread is baked in an oven. Many breads are made from a "straight dough", which means that all of the ingredients are combined in one step, and the dough is baked after the rising time; others are made from a "pre-ferment" in which the leavening agent is combined with some of the flour and water a day or so ahead of baking and allowed to ferment overnight. On the day of the baking, the rest of the ingredients are added, and process continues as with straight dough. This produces a more flavorful bread with better texture. Many bakers see the starter method as a compromise between the highly reliable results of baker's yeast and the flavor and complexity of a longer fermentation. It also allows the baker to use only a minimal amount of baker's yeast, which was scarce and expensive when it first became available. Most yeasted pre-ferments fall into one of three categories: "poolish" or "pouliche", a loose-textured mixture composed of roughly equal amounts of flour and water (by weight); "biga", a stiff mixture with a higher proportion of flour; and "pte fermente", which is simply a portion of dough

reserved from a previous batch. Sourdough (also known as "levain" or "natural leaven") takes the pre-ferment method a step further, mixing flour and water to allow naturally occurring yeast and bacteria to propagate (usually Saccharomyces exiguus, which is more acid-tolerant than S. cerevisiae and various species of Lactobacillus).

Dough before first rising. Sourdough

Dough after first rising.

Dough after proofing in tin, ready to bake.

Sourdough is a type of bread produced by a long fermentation of dough using naturally occurring yeasts and lactobacilli. In comparison with breads made with cultivated yeast, it usually has a mildly sour taste because of the lactic acid produced by the lactobacilli. Sourdough breads are made with a sourdough starter (which differs from starters made with baker's yeast). The starter cultivates yeast and lactobacilli in a mixture of flour and water, making use of the microorganisms already present on flour; it does not need any added yeast. A starter may be maintained indefinitely by regular additions of flour and water. Some bakers have starters several generations old, which are said to have a special taste or texture. It is possible to obtain existing starter cultures to begin a new one. At one time, all yeast-leavened breads were sourdoughs. The leavening process was not understood until the 19th century, when yeast was first identified. Since then, strains of Saccaromyces cerevisiae have been bred for their reliability and speed of leavening and sold as "baker's yeast". Baker's yeast was adopted for the simpicity and flexibility it introduced to bread making, obviating the lengthy cultivation of a sourdough starter. While sourdough breads survived in some parts of Europe, throughout most of the U.S., they were replaced by baker's yeast. Recently there has been a revival of sourdough bread in artisan bakeries.

There are other ways of sourdough baking and culture maintenance. A more traditional one is the process that was followed by peasant families throughout Europe in past centuries. The family (usually the woman was in charge of breadmaking) would bake on a fixed schedule, perhaps once a week. The starter was saved from the previous week's dough. The starter was mixed with the new ingredients, the dough was left to rise, and then a piece of it was saved (to be the starter for next week's bread). The rest was formed into loaves that were marked with the family sign (this is where today's decorative slashing of bread loaves originates from) and taken to the communal oven to bake. These communal ovens with time evolved into the modern bakery. Steam The rapid expansion of steam produced during baking leavens the bread, which is as simple as it is unpredictable. The best known steam-leavened bread is the popover. Steam-leavening is unpredictable since the steam is not produced until the bread is baked. Steam leavening happens regardless of the rising agents (baking soda, yeast, baking powder, sour dough, beaten egg whites, etc.).

The leavening agent either contains air bubbles or generates carbon dioxide. The heat vaporises the water from the inner surface of the bubbles within the dough. The steam expands and makes the bread rise. This is the main factor in the rise of bread once it has been put in the oven.[17] CO2 generation, on its own, is too small to account for the rise. Heat kills bacteria or yeast at an early stage, so the CO2 generation is stopped.

Bacteria Salt rising bread employs a form of bacterial leavening that does not require yeast. Although the leavening action is not always consistent, and requires close attention to the incubating conditions, this bread is making a comeback due to its unique cheeselike flavor and fine texture.[18] Aeration Aerated bread is leavened by carbon dioxide being forced into dough under pressure. From the mid 19th to 20th centuries bread made this way was somewhat popular in the United Kingdom, made by the Aerated Bread Company and sold in its highstreet tearooms. The company was founded in 1862, and ceased independent operations in 1955. While it had some devoted adherents, it never eclipsed the use of baker's yeast worldwide. The Pressure-Vacuum mixer was later developed by the Flour Milling and Baking Research Association at Chorleywood. With the application of both pressure and vacuum at different points in the mixing process, this mixer not only manipulates the gas bubble size, it may also manipulate the composition of gases in the dough via the gas applied to the headspace.[19] Fats or shortenings Fats, such as butter, vegetable oils, lard, or that contained in eggs, affect the development of gluten in breads by coating and lubricating the individual strands of protein. They also help to hold the structure together. If too much fat is included in a bread dough, the lubrication effect will cause the protein structures to divide. A fat content of approximately 3% by weight is the concentration that will produce the greatest leavening action.[20] In addition to their effects on leavening, fats also serve to tenderize breads and preserve freshness. Bread improvers

Bread improvers and dough conditioners are often used in producing commercial breads to reduce the time needed for rising and to improve texture and volume. Chemical substances commonly used as bread improvers include ascorbic acid, hydrochloride, sodium metabisulfate, ammonium chloride, various phosphates, amylase, and protease. Salt is one of the most common additives used in production. In addition to enhancing flavor and restricting yeast activity, salt affects the crumb and the overall texture by stabilizing and strengthening[21] the gluten. Some artisan bakers are foregoing early addition of salt to the dough, and are waiting until after a 20-minute "rest". This is known as an autolyse[22] and is done with both refined and whole-grain flours. Chemical composition In wheat, phenolic compounds are mainly found in hulls in the form of insoluble bound ferulic acid where it is relevant to wheat resistance to fungal diseases.[23] Rye bread contains phenolic acids and ferulic acid dehydrodimers.[24] Three natural phenolic glucosides, secoisolariciresinol diglucoside, p-coumaric acid glucoside and ferulic acid glucoside, can be found in commercial breads containingflaxseed.[25] Baking Baking of bread

1. The yeast dough has been completely mixed.

2. The baker removes enough dough to make one loaf of bread.

3. This rack is filled with proofing baskets (also called brotform orbanneton).

4. The proofing baskets are dusted with flour to keep the bread dough from sticking to the baskets.

5. The dough has been placed in the floured baskets.

6. The dough begins rising in a warm place.

7. The risen dough is slashed with a lame to create a design and to let steam escape during baking.

8. The dough is ready to bake.

9. The dough is turned out onto abaking peel.

10. The dough is slid into the oven.

11. The loaves are moved around in the oven so that they will bake evenly.

12. The hot loaves are placed on a wheeled baker's rack to cool. Serving and consumption Bread can be served at any temperature; once baked, it can subsequently be toasted. It is most commonly eaten with the hands, either by itself or as a carrier for other foods. Bread can be dipped into liquids such as gravy, olive oil, or soup; it can be topped with various sweet and savory spreads, or used to make sandwiches containing myriad varieties of meats, cheeses, vegetables, and condiments. Shelf life In 2009, a natural preservative for extending the shelf life of bread for up to two weeks (as opposed to a few days) had been patented and licensed to Puratos, a Belgium-based baking ingredients company that supplies to more than 100 countries. The breakthrough was pioneered by Prof Elke Arendt at the University College Cork (UCC) by incorporating into the bread a lactic acid bacteria strain which also "produces a fine crumb texture" and "improves the flavour, volume and nutritional value of the food as well." Prior to this, "About 20% of all bread is thrown out due to shelf-life issues."[26] Crust The bread crust is formed from surface dough during the cooking process. It is hardened and browned through the Maillard reaction using the sugars and amino acids and the intense heat at the bread surface. The nature of a bread's crust differs depending on the type of bread and the way it is baked. Commercial bread is baked using jets that direct steam toward the bread to help produce a desirable crust. The crust of most breads is less soft, and more complexly and intensely flavored, than the rest, and judgments vary among individuals and cultures as to whether it is therefore the less palatable or the more flavorful part of a particular style of bread. Some manufacturers, including as of September 2009 Sara Lee, market traditional andcrustless breads. The first and last slices of a loaf (or a slice with a high ratio of crust-area to volume compared to others of the same loaf) are sometimes referred to as the heel or the crust of the loaf. Old wives tales suggest that eating the bread crust makes a person's hair curlier. Additionally, the crust is rumored to be healthier than the rest. Some studies have shown that this is true as the crust has more dietary fiber and antioxidants, notably pronyl-lysine.[27][28] The pronyl-lysine found in bread crust is being researched for its potentialcolorectal cancer inhibitory properties

Bakery Products

The bakery products sector was previously called morning goods, referring to products such as rolls, which were traditionally sold in the morning and consumed on the day they were baked. Due to modern technology, ingredients and packaging, the shelf life of these products has improved, making the term morning goods somewhat out of date. In addition, changing shopping and eating habits mean that these products can now be consumed a day after purchase.

Rolls and baps account for the majority of sales within this sector, although the sector also includes traditional British toasting products (muffins, crumpets and teacakes), as well as scones and buns, and seasonal products, such as hot cross buns. In recent years, the sector has expanded to encompass international products, such as croissants and US-style sweet muffins, as well as bagels, pancakes, waffles and potato cakes.

MARKET TRENDS

The Price of Bread

Many craft bakers and supermarkets increased their prices during 2001, marking an end to the price-cutting activity that had characterised previous years. According to some industry sources, extensive publicity in mainstream media meant that, on the whole, customers were prepared for these increases. There were a number of reasons for these price rises. Early in the year, Allied Bakeries introduced selective increases, which were tailored to the profitability of its individual customers, in response to rising delivery costs.

Growing Competitiveness Within the Market

Manufacturers of mainstream products continually having to rethink their strategies, and update and promote their products, in order to differentiate them from their competitors. This is due to the proliferating number of categories within the bread market including premium, organic and continental breads coupled with improvements in the quality of retailers own-label products.

Lifestyle Factors

The many lifestyle changes having a continuing impact on the bread market include the following:

Smaller household sizes, including more single-person households and smaller family households, are leading to new product developments (NPDs), such as half loaves and the growing popularity of rolls and bakery snacks.

The rising fortunes of the bakery products sector can be attributed in part to changing eating habits, with casual eating patterns, such as snacking or grazing, taking the place of traditional meals.

The increase in the number of families in which both partners work full time has led to a higher proportion of meals especially lunches being eaten outside the home. This has helped to boost demand for sandwiches, giving plant bakeries the opportunity to widen their market by supplying bread to sandwich manufacturers. It has also meant that a wide variety of outlets (including convenience stores and High Street craft bakeries) now incorporate bake-off units to prepare freshly-baked sandwiches and hot snacks for the lunchtime market.

Bakery Products Bakery Products The market for bakery industry is valued at Rs. 69 billion. The two major bakery products, i.e. breads and biscuits hold for about 82 % of the market share.

Product coverage

Bread Biscuits Pastries Cakes Buns Rusk Bread The bread market has a business volume of 1.5 million tonnes. The bread industry has a production of approximately 27 lakh tonnes. This segment is characterized by high level of fragmentation, and high margin. The major factors for growth in this segment are: Brand loyalty Volumes Strong distribution networks The major challenge faced by the organized bread sector at present is low margins of profit. Hike in the prices of

major raw materials like sugar, vegetable oil, milk, and wheat flour has been accounted for the industry's low margins of profit.

Major Players

The major players in the bread industry that holds about 90% of the market share are: Britannia Modern Industries Ltd. Biscuits

The biscuit market has a total production volume of 1.1 million tonnes. The growth drivers for the biscuit industry are focused advertising, urban market, and new

launches.

Major Players The major players in the biscuit segment are: Britannia

Britannia Industries Britannia Industries Limited is an Indian food-products corporation based in Kolkata,[2] India. It is famous for its Britannia andTiger brands of biscuit, which are popular throughout India. Britannia has an estimated 38% market share.[3] The Company's principal activity is the manufacture and sale of biscuits, bread, rusk, cakes and dairy products. [edit]History The company was established in 1892, with an investment of Rs. 295.[4] Initially, biscuits were manufactured in a small house in central Kolkata. Later, the enterprise was acquired by the Gupta brothers mainly Nalin Chandra Gupta, a renowned attorney,and operated under the name of "V.S. Brothers." In 1918, C.H. Holmes, an English businessman in Kolkata, was taken on as a partner and The Britannia Biscuit Company Limited (BBCo) was launched. The Mumbai factory was set up in 1924 and Peek Freans UK, acquired a controlling interest in BBCo. Biscuits were in big demand during World War II, which gave a boost to the companys sales. The company name finally was changed to the current "Britannia Industries Limited" in 1979. In 1982 the American company Nabisco Brands, Inc. became a major foreign shareholder. [edit]The 'Biscuit King' Kerala businessman K. Rajan Pillai secured control of the group in the late 1980s, becoming known in India as the 'Biscuit King'.[5] In 1993, the Wadia Group acquired a stake in Associated Biscuits International (ABIL), and became an equal partner withGroupe Danone in Britannia Industries Limited. In what The Economic Times referred to as one of [India's] most dramatic corporate sagas,[6] Pillai ceded control to Wadia and Danone after a bitter boardroom struggle,[7]then fled his Singapore base to India in 1995 after accusations of defrauding Britannia, and died the same year in Tihar Jail.[8] [edit]Wadia and Danone The Wadias' Kalabakan Investments and Groupe Danone had two equal joint venture companies, Wadia BSN and UK registered Associated Biscuits International Holdings Ltd., which together held a 51 per cent stake in Britannia.[9] The ABIH tranche was acquired in 1992, while the controlling stake held by Wadia

BSN was acquired in 1995. It was agreed that, in case of a deadlock between the partners, Danone was obliged to buy the Wadia BSN stake at a "fair market value". ABIH had a separate agreement signed in 1992 and was subject to British law.[9][10] Wadia was to be Danone's partner in the food and dairy business, and product launches from Groupe Danones were expected but never materialised despite the JV being in existence for over 11 years in India.[9] Under the 1995 joint venture agreement, Danone is prohibited from launching food brands within India without the consent of the Wadias.[11] In addition, the partners agreed there would be the right of first refusal to buy out the remaining partner in the event of the other wishing to sell its holding.[12] In May 2007, Nusli Wadia told the Ministry of Commerce and Industry that Danone invested in a Bangalore-based bio nutrition company, Avesthagen, in October 2006 in violation of the government's Press Note 1, 2005, which requires a foreign company to obtain the consent of its Indian joint venture partner before pursuing an independent business in a similar area, including joint ventures based purely on technical collaboration. Danone argued that Press Note 1 did not apply to it as it did not have a formal technology transfer or trademark agreement with Avesthagen, and that its 25% holding in Britannia was indirect.[13] Wadia also filed a case in the Bombay High Court for a breach of a non-competition clause in that connection. The court ordered Danone not to alienate, encumber or sell shares of Avestagen.[14] In September 2007, the Foreign Investment Promotion Board of India rejected Danone's claims that it did not need a non-compete waiver from the Wadias to enter into business in India alone.[15] In June 2006, Wadia claimed Danone had used the Tiger brand to launch biscuits in Bangalore.[12] After a prolonged legal battle, Danone agreed to sell its 25.48% stake in Britannia to Leila Lands, which is a Wadia group entity based in Mauritius, and quit this line of business. The deal was valued at $175200 m. With this buy-out, Wadia holds a majority stake of 50.96%.[16] [edit]Growth and profitability The company is growing at a steady rate, and is currently profitable. Between 1998 and 2001, the company's sales grew at a compound annual rate of 16% against the market, and operating profits reached 18%. More recently, the company has been growing at 27% a year, compared to the industry's growth rate of 20%. At present, 90% of Britannias annual revenue of Rs2,200 crore comes from biscuits. Britannia is one of India's 100 Most Trusted brands listed in The Brand Trust Report.[17] [edit]Business [edit]Dairy products Dairy products contribute close to 10 per cent to Britannia's revenue.[18] Britannia trades and markets dairy products, and its dairy portfolio grew to 47% in 2000-01 and by 30% in 2001-02. Britannia holds an equity stake in Dynamix Dairy and outsources the bulk of its dairy products from its associate. Its main competitors are Nestl India, theNational Dairy Development Board (NDDB), and Amul (GCMMF).[19]

[edit] Joint venture with New Zealand Dairy On 27 October 2001, Britannia announced a joint venture with Fonterra Co-operative Group of New Zealand, an integrated dairy company from procurement of milk to making value-added products such as cheese and buttermilk.[19] Britannia planned to source most of the products from New Zealand, which they would market in India.[18] The joint venture will allow technology transfer to Britannia.[19] Britannia and New Zealand Dairy each holding 49% of the JV, and the remaining 2 per cent held by a strategic investor. Britannia has also tentatively announced that its dairy business would be transferred and run by the joint venture.[19] The authorities' approval to the joint venture obliged the company to start manufacturing facilities of its own. It would not be allowed to trade, except at the wholesale level, thus pitching it in competition with Danone, which had recently established its own dairy business.[19] [edit]Biscuits

Britannia Little Hearts The company's factories have an annual capacity of 433,000 tonnes.[3] The brand names of biscuits include VitaMarieGold, Tiger,Nutrichoice Junior,Good day, 50 50, Treat, Pure Magic, Milk Bikis, Good Morning, Bourbon, Thin Arrowroot, Nice, Little Hearts and many more. Tiger, the mass market brand, realised $150.75 million in sales including exports to countries including the U.S. and Australia, or 20% of Britannia revenues in 2006. In a separate dispute from the shareholder matters, the company alleged in 2006 that Danone had violated its intellectual property rights in the Tiger brand by registering and using Tiger in several countries without its consent. Britannia claimed the company found out that Danone had launched the Tiger brand in Indonesia in 1998, and later in Malaysia, Singapore, Pakistan and Egypt, when it attempted to register the Tiger trademark in some of these countries in 2004.[20] Whilst it was initially reported in December 2006 that agreement had been reached,[21] it was reported in September 2007 that a solution remained elusive.[20] In the meantime since Danone's biscuit business has been taken over by Kraft, the Tiger brand of biscuits in Malaysia was renamed Kraft Tiger Biscuits in September 2008. Britannia initiated legal action against Danone in Singapore in September 2007.[22] The dispute was resolved

in 2009 with Britannia securing rights to the Tiger brand worldwide, and Danone paying Rs 220 million to utilise the brand

Parle-G From Wikipedia, the free encyclopedia

Parle-G biscuit Parle-G or Parle Glucose is a brand of biscuits manufactured by Parle Products in India. As of 2011, it is the largest selling brand of biscuits in the world according to Nielsen.[1] Contents [show] [edit]History Parle Products was established in the Vile Parle suburb of Mumbai, in 1929. It began manufacturing biscuits in 1939. In 1947, when India became independent, the company launched an ad campaign, showcasing its Gluco brand of biscuits as an Indian alternative to the British biscuits.[2] Parle-G biscuits were earlier called 'Parle Gluco' Biscuits until 1980s. The "G" in the name Parle-G originally stood for "Glucose", though a later brand slogan also stated "G means Genius".

In 2013, Parle-G became India's first domestic FMCG brand to cross the [edit]Marketing

5,000 crore in retail sales.[3]

Primarily eaten as a tea-time snack, Parle-G is one of the oldest brand names in India. For decades, the product was instantly recognized by its iconic white and yellow wax paper wrapper with the depiction of a young girl named Gunjan Gundaniya on the front. The Brand Trust Report, published by Trust Research Advisory in 2011, ranked Parle in the 58th place as the Most Trusted brands of India. As of January 2013, Parle-G's strong distribution network covered over 6 million retail stores in India.[4] The low price is another important factor in Parle-G's popularity. Outside India, it is sold for 99 cents for a 418 gram pack as of 2012. A more common 80 gram "snack pack" is sold for as low as 15 cents at Indian grocers, and 40 cents at major retailers

Bakeman ITC Foods Ltd. Surya Food and Agro Pvt. Ltd. HLL Major Brands The major brands of biscuit are: Britannia Parle Bakeman Priya Gold Elite Cremica Dukes Anupam Horlicks

MARKET POSITION

Bakery products are flour-based food baked in an oven such as bread, cakes, pastries and pies. Bakery products are an item of mass consumption in view of its low price and with rapid growth and changing eating habits of people, bakery products have gained popularity among masses.

Industry Scenario

According to report by Research and Markets, the bakery industry has achieved third position in generating revenue among the processed food sector. The market size for the industry is pegged at US$ 4.7 billion in 2010 and is expected reach US$7.6 billion by 2015. It also mentions that the shining star of the sector remains the biscuits industry, which is expected to outperform the growth of the sector overall.

The per capita consumption of bakery products in India, as it stands today, is one to two kg per annum, which is comparatively lower than the advanced countries where consumption is between 10 and 50 kg per annum. The growth rate of bakery products has been tremendous in both urban and rural areas. The sector has indicated promising growth prospects and has been making rapid progress, adds the report.

Whereas, Rajiv Subramanian, principal, consumer & retail, Tata Strategic Management Group, has to say, The Indian bakery sector consists of some of the large food categories like breads, biscuits, cakes etc. The branded packaged segment in this sector had a size of Rs 17,000 crore in FY2012 and is expected to grow at 13-15% in the next 3-4 years. Within biscuits, 3-4 large-sized players viz. Britannia, Parle, ITC, Cadburys comprise three-fourths of the market. The breads and cakes market is much more fragmented with multiple regional and local players. Britannia is the only national player straddling across the bakery segment. International players like United Biscuits, Unibic have gained prominence in the last few years in their specific product segments. Going ahead, the sector is expected to see some more of the international brands entering the Indian market. Bunty Mahajan, owner and pastry chef, feels, The segment has matured to a great extent in the past 3-4 years. This has happened due to two reasons. Firstly, due to the availability of better ingredients from chocolate, toppings, fillings, flavours etc. Secondly, education abroad has brought in many new players

striving to produce products of international standard rather than products of mediocre quality. Number of players is increasing slowly. More and more people are starting to take this up as a profession from the house, after doing short/long courses at premier institutes like Le Cordon Bleu. In the years to come, we will see many of these newcomers expanding their horizons into the retail segment. Vijay Rathi, director, Devashree Foods Pvt. Ltd, states, There are very few organised players in the country and the whole industry is fragmented in stand-alone and every city has its own culture for bakery and eating habits of Indians are also diversified. He added that the industry was driven by owner managers and there was lack of trained staff. Large players don't have nation wide presence. Bakery industry is a sunrise industry and there is good scope. Manufacturers should use good ingredients in their products, so that it will help them to grow the business, he said.

Innovations and R&D

Health and wellness as a trend is seen playing out in bakery like in most categories, with players bringing out healthier product options. Britannia's Nutrichoice has introduced its range of ragi, oats and 5 grain biscuits. In breads also, the whole wheat/brown bread segment is seeing an upswing. At the other end, players are also focussing on the indulgence segment with Cadburys Oreo and Sunfeast's Dark Fantasy Chocolate filled biscuits entering the shelves, said Subramanian of Tata Strategic.

Rathi of Devashree said that manufacturers nowadays were looking for development in the mechanisms for bakery products as well as good ingredients.

Trends

While talking about new trends in the industry, Subramanian of Tata Strategic said that the broader food trends were also playing out here which included unbranded to branded, rural adoption, premiumisation, health & wellness and convenience. These trends have manifested themselves in the various new launches/introductions that we have seen in the past few years by leading players be it Britannia's Nutrichoice range, smaller packs of Good Day, ITC dark fantasy, Parle's Happy Happy and Parle-G Gold, he said. Chef Mahajan states, Indians have always had a sweet tooth. With more travel and exposure to the worldwide market, people have now started appreciating good quality products, good quality ingredients, exquisite finishing and are willing to pay the extra buck. Growth rate of cake shops is directly related to the spending power. People are less hesitant on spending money, leading to the possibility of higher prices, leading to the possibility of better products.

According to Rathi of Devashree, convenience food is the need of the hour, as there is increase in number of middle class people and husband and wife both are working, so they opt for ready to eat food available in the market.

Factors for Growth

Recently, a lot of bakers have gotten into three dimensional cakes and theme cakes. Cutting off from the regularity, bakers are now looking at experimenting with many more ingredients like rice treats, and inculcating them into cake designs. Some bakers even make use of wooden planks for support. There is also something as sugar crystal sculptures, where they try and use them as per the theme of the cake, according to chef Mahajan. The biscuit category is expected to continue its growth trajectory of 15% going ahead. Growth in bread would be relatively slower, informs Subramanian of Tata Strategic.

Challenges, Opportunities

The challenges would be category-specific. The biscuits category has seen rapid growth in the last few years. Implementation of packaging standardisation norms appears to be the big challenge. Volatility in input costs is expected to remain and this would add to the woes. In bread, profitability has remained the focal point for some time. Players have been looking to increase share of value-added products while focussing on operational efficiencies linked to daily distribution. The challenge for cakes would be to expand the consumption of packaged cakes. In fact, this challenge is also a significant opportunity for this particular segment. With the right enablers from product and supply chain, this is a category waiting to explode, adds Subramanian. Chef Mahajan feels, The cake business is not a very high revenue-generating business. With commercial property rates so high, it is very difficult to sustain and have profitable retail outlets. It is also very expensive in cities like Mumbai to expand the production unit due to the same reason.

Rathi is of the opinion that quality of flour and supply chain were key challenges for the bakery industry. Bakery manufacturers have to deal with quality of flour and other ingredients. Whereas opportunities are immense in this industry as disposable income has increased among the people.

3. Industry Background

RECENT HISTORY

During the second half of the 1990s, the bread market was dominated by the negative effects of discounting by supermarkets. As a staple item within the British diet, bread played an important part in the price wars between major retailers, which used the product as a loss leader, selling it at below cost price in order to attract customers. (Bread reached a low of 7 pence for a standard loaf during 1999.)

Although bread manufacturers responded to this by introducing added-value products, such as premium and super-premium loaves, the multiples reacted by extending their discounting practices to these sectors, too. However, 2000 and 2001 witnessed a reduction in discounting activity, as supermarkets began to concentrate on quality rather than price cutting, and as bread manufacturers began to implement price increases.

Another area in which the supermarkets have had a strong influence in recent years is in the widespread adoption of in-store bakeries (ISBs), which sell craft-style breads baked on the premises, either from scratch or by bake-off methods (finishing part-baked or frozen dough products). This has had a strong effect on both the craft and plant-bakery sectors, exacerbated by the fact that supermarkets introduced discounting into their ISBs during the mid-1990s.

Many

plant bakers have now entered the bake-off market,

producing their own part-baked products for finishing off in ISBs, and/or acquiring existing companies that were already supplying the sector. The craft sector represented by small High Street bakery shops has been declining for many years, suffering from small-scale production and low profit margins. Most existing craft bakers have now diversified into areas such as takeaway food (e.g. sandwiches and hot snacks prepared in bake-off ovens) and many have incorporated cafs into

their premises. Some of the more successful craft bakery chains now see themselves as competing with the coffee shop chains, such as Starbucks, more than with plant bakers or ISBs.

NUMBER OF COMPANIES

The leading bakeries in India registered a decent growth during recent years. The use of finest quality of milk, milk products, sweeteners, flour and other ingredients has increased the nutritious value and consumption of the same in India. The bakery products offered by the leading bakeries in India are breads, cakes, pastries, biscuits, cookies and tarts. Brief detail of Leading Bakeries in India

The concept of organized bakeries in India was introduced by the British. With the passage of time, a number of bakeries sprung up in India. These bakeries were either traditional sweet sellers or specialized bakery.

Today, the Indian food product market is flooded with a number of bakeries catering high nutritious value breads, cakes, sweets and confectioneries to the customers. The bakery companies of India have a very wide portfolio of bakery products. Some of them have dedicated retail outlets for serving their customers. The Leading Bakeries in India use finest quality of milk, milk products, sweeteners, flour and other ingredients to manufacture mouth watering bakery products. Most of these Leading Bakeries in India strictly conforms to international standards for quality and manufacturing practices. The Indian bread and bakery market had a decent growth in 2006. It registered more growth rate in comparison to the period from 2002 to 2005. The sales rose by 3.1% in 2006 to 3.27 billion. The consumption of whole meal or brown bread is on the rise amongst Indians. Names of some of the Leading Bakeries in India

Bisk Farm Elite Foods Sam Enterprises Private Limited

Prakhya Groups Samay Foods Private Limited Prabhat Udyog Feroze Foods and Flavours

Products offered by the Leading Bakeries in India

Bisk Farm

Since its inception in the year 2000, Bisk Farm has been recognised for its delectable biscuits, cookies, cakes and rusks. The brand is owned and marketed by SAJ Food Products (P) Ltd, a part of the Aparna Group of Companies. Bisk Farm has carved a niche for itself in the market in a fairly short span of time. It is ranked amongst the top 3 bakery brands in the markets where it competes. Bisk Farm is presently available throughout Eastern and North Eastern India, and parts of South, Central and North India. The company eventually aims to market its delicacies across the country. Innovation has always been one of Bisk Farms secret ingredients to success. With its assortment of goodies, ranging from cookies to cakes to a variety of rusks, it caters to almost every palate. In addition, as part of its drive to establish a presence across India, Bisk Farm has invested in state-of the-art manufacturing facilities in Eastern and South India.

Bisk Farm Just Baked is another ambitious part of the brands endeavour to share its goodness directly with the consumer. It showcases the Brands array of freshly baked Savouries, Danishes, Special Cakes, Pastries, Breads and other Confectionery items, along with a great ambience.

Cakes Pastries White breads Cheese breads Garlic breads Ginger breads Brown breads High fiber breads Buns Burgers Pizzas Patties Sweets Candies Chocolates Biscuits Cookies Tarts Crackers Pies Desserts

Bakers and Confectioners in Dehradun Dehradun is famous for delicious bakery products not only in Uttarakhand but also in neighboring states and it is not wrong if said in all India. Bakers and Confectioners in Dehradun distribute their products across the city and state. Now a days bakery product becomes a part of festivals and parties, people love to eat and distribute the bakery products among friends as a gift instead of sweets so, bakery products getting much popularity day by day. Not only children but adults also love to indulge the bakery products, no matter how much calorie it consist- it just a matter of taste! To eat sometimes something delicious gives relax and enjoyment to your body and soul and so the bakery products of Dehradun surely do. There are various famous bakers and confectioners in Dehradun which are in this field from last many decades and maintain

their quality as it is to hold their top position. Freshness and Hygiene are their trade mark so that their customers get everything what they want to eat. Whether there is an occasion of Birthday or Christmas or any other kind of anniversary Dehradun bakers are specialist to make beautiful and delicious cakes. Christmas are on the way so, you can book your cake a week before because there are much rush on the day of Christmas. Ellora Bakers, Grand Bakers, Standard Bakers are among the top bakers of Dehradun from last several decades and providing quality in their products constantly. So, celebrate your birthday, anniversaries and festivals with delicious bakery products from the bakers and confectioners of Dehradun

Competitor Analysis

4. Competitor Analysis

5. Strengths, Weaknesses, Opportunities and Threats

THE TOTAL MARKET

Strengths

Bread remains a staple product in the national diet, and is consumed in almost every household, despite changes in eating habits. Bread is a destination category for most supermarket shoppers, i.e. it is a product that consumers go to supermarkets specifically to buy, rather than being an impulse purchase.

The shelf

life of many bread and bakery products has been

improved by manufacturers initiatives, improving convenience for both retailers and customers.

Bread represents the main source of fibre in the UK diet, providing a quarter of the daily intake on average.

Weaknesses

The market is mature and saturated, leaving little room for growth.

As eating habits have changed considerably over the past two decades, bread is less likely to be consumed at meal-times than has been the case in the past.

On the whole, British consumers do not use bread as an

accompaniment to main meals, as is the case in continental Europe. The markets value has been depressed for a number of years by heavy price-cutting.

Opportunities

Difficult market conditions have encouraged manufacturers to concentrate on new product development (NPD), which has revitalised some sectors.

The growing interest in organic food offers many opportunities for the bread market.

The development of functional food has already been exploited by some bread manufacturers, and may lead to further opportunities in the future.

Although the market has reached saturation levels in terms of penetration, there is still scope for increasing the frequency of purchase.

The development of in-store bakeries (ISBs) has helped to improve perceptions ofthe quality of bread, reminding consumers of its traditional, aesthetic characteristics such as crustiness and aroma.

Threats

Although heavy discounting by supermarkets has been less of a problem for the bread market over the past year, there are signs that the proliferation of new product categories may make it increasingly difficult for manufacturers to gain shelf space.

The wide range of product positionings can also be confusing for the consumer. Breads image as a commodity product is still likely to act as a brake to any real growth within the market.

WHITE BREAD

Strengths

Consumers tend to prefer the taste and texture of white bread to those of brown and wholemeal bread. This is especially true for men and children, who tend to eat more bread than others.

White bread is a rich source of calcium and iron, as well as fibre, and its nutritional benefits have been reinforced by government health advice.

Even though price

discounts on white bread were not as heavy in 2001 as in the recent past, the product still offers the consumer good value for money.

Weaknesses

Standard white bread, in particular, still has a loss-leading image, which is at odds with the current trend for quality in food.

On the whole, white bread tends to be less appealing to the sophisticated foodie consumer, who is prepared to pay more for good-quality products, such as wholemeal and specialist varieties.

Opportunities

Improvements in technology are aiding NPDs such as the launch of healthier white loaves, which are made partly with wholemeal flour but still have the taste and texture of white bread.

Improvements in distribution by plant bakeries mean that fresh sliced white bread can be available throughout the day, fitting in with the 24/7 lifestyle that is now prevalent among many consumer groups.

Sales of white bread can be increased by the growing number of smaller outlets incorporating ISBs.

The development of new products with a longer shelf life may encourage convenience stores to carry larger stocks and a wider variety.

Threats

The white bread sector is becoming increasingly crowded in terms of product positionings, and is among the most likely to suffer from problems in obtaining shelf space.

As the largest sector, white bread is also the most likely to be affected by price-cutting by the multiple retailers.

The white bread sector is also the most likely to lose sales in the face of the growing popularity of other sectors, such as speciality breads and bakery snacks.

BROWN AND WHOLEMEAL BREAD

Strengths

Wholemeal bread tends to appeal to a more upmarket consumer base than white bread.

Those who consume wholemeal bread are often more loyal, and less

prone to product switching. They are

also more affluent, and less likely to be influenced by price-cutting.

Wholemeal bread contains more fibre than white bread, which contributes to its healthier image.

Weaknesses

Brown and wholemeal bread appeal to a narrower market than white bread.

Children and men, who tend to be the largest consumers of bread, are more likely to reject brown and wholemeal bread.

The cost to the consumer of brown and wholemeal bread is generally higher than that of white bread.

Opportunities

The development of the market for organic food is particularly likely to benefit the brown and wholemeal sector, which already has a healthier image than the white bread sector.

Product innovations over the past few years have increaded the mass appeal of brown and wholemeal bread by making the texture more like that of white bread.

The extension of premium and super-premium products to the brown and wholemeal sectors will benefit the market.

Threats

Continuing activity within the premium white bread sector is likely to make consumers of white bread more reluctant to switch to brown or wholemeal.

The strengthening position of the specialist bread sector, which appeals to the same upmarket consumer base as wholemeal bread, is also a problem for the sector.

ETHNIC AND SPECIALITY BREAD

Strengths

The ethnic and speciality bread sector has benefited from a growing interest in food, cooking and eating among many consumer groups, increasing the desire to try exotic and unusual dishes.

In addition, eating habits have become increasingly international, prompted by foreign travel and the influence of multi-ethnic communities in many areas of the UK.

usually offer higher profit margins than other types of bread. Ethnic and speciality breads Some speciality breads especially those within the ethnic segment (such as pitta and naan) have long shelf lives.

Weaknesses

The sector is prone to the effects of short-term fashions in eating habits, and some new products sell well only for a relatively short period of time.

Many of the speciality bread products, such as crusty continental breads, which are produced in ISBs, need to be consumed soon after purchase. This can be a problem for UK shoppers, who are less likely than those in Europe to shop for food on a daily basis.

Opportunities The ready to bake sector is growing in popularity. Speciality breads, such as garlic and foccacia breads already feature strongly in this market and there are limitless opportunities to extend the sector with new varieties.

Most types of ethnic and speciality bread can be produced using organic ingredients.

It is often the case that new bread varieties are introduced to consumers originally through the food service sector, in restaurants and sandwich outlets. These can be good testing grounds for new products

Threats

As ISBs become more widespread, the sector is becoming increasingly prone to discounting.

Some of the most popular ethnic and speciality breads, such as pitta and French loaves, already have commodity status to some extent.

BAKERY PRODUCTS

Strengths

The wide range of products within the bakery products sector means

that it is more adaptable than the bread sectors.

rly well-suited to todays more casual eating habits, as they can be eaten at meal times or as snacks at any time during the day.

Many bakery snacks have a long shelf life.

The products lend themselves well to impulse purchasing.

The products are particula

Generally, these products are more suitable than other bread products for smaller households, which are increasingly becoming the norm.

Weaknesses

There is a regional bias to many bakery products, which may be a limiting factor.

Bakery products are generally more expensive to the consumer than white and brown loaves. This may have a negative effect on the sector in the event of an economic downturn.

Opportunities

Product variety is an important feature of the sector, meaning that it lends itself well to NPD.

Many of the bakery products that were once available only on a seasonal basis are now on sale for much of the year.

The sector can accommodate brand extensions of many of the new products that have been developed within the white bread and brown and wholemeal bread sectors.

Threats

There are signs that the sector is approaching maturity, with fewer new products being developed.

Price-cutting has also become increasingly evident within the sector over the past few years.

Key Note Ltd 2002

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6. Buying Behaviour

INTRODUCTION

The research findings discussed in this chapter are based mainly on the Target Group Index (TGI) survey, which is carried out annually by BMRB International Ltd. The TGI tables on bread usage are based on housewives, defined as the person responsible for household grocery shopping. It should be noted that the findings from the 2001 survey are based on male as well as female housewives, whereas those from previous years were based on female housewives only.

The chapter also includes figures on household purchasing of bread, taken from the National Food Survey for 2000, which is published by the Department of the Environment, Food and Rural Affairs (DEFRA).

PENETRATION OF BREAD

The status of bread as a staple product within the UK is highlighted by its very high penetration levels. In 2001, 98.3% of housewives said they used it.

Table 22: Penetration of Bread (% of housewives), 1999-2001

Key Note Ltd 2002

1999

2000

2001
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Any bread White bread Brown bread

98.4 86.5 45.5

97.7 86.7 47.8

98.3 86.5 47.8

Source:Target Group Index (TGI), BMRB International Ltd, 1999, 2000, 2001

White bread is still almost twice as popular as brown bread, with 86.5% penetration among housewives. There was a slight increase in the penetration of brown bread between 1999 and 2000, and this penetration level (47.8%) was sustained in 2001.

Key Note Ltd 2002

45

USAGE OF BREAD

The high household penetration of bread does not necessarily mean high consumption, as Table 23 shows.

In the 2001 TGI survey, 49% of housewives said that they used two loaves of bread or less a week, while 34.5% used between three and five loaves a week. Only 13% were heavy users, i.e. using six or more loaves each week.

Table 23: The Usage of Bread (% of housewives), 1999-2001

1999 Six or seven loaves a week Heavy Users Eight loaves a more or week Medium Users Four loaves aa week week Five loaves Three loaves a week 7.7 5.1

2000 7.5 5.6

2001 7.6 5.4

14.4 16.5 8.9

12.6 16.1 9.4

9.2 16.1 9.2

Light Users One loaf or a less a week Two loaves week 21.4 25.4 22.5 25.6 23.6 25.4

Source:Target Group Index (TGI), BMRB International Ltd, 1999, 2000, 2001

The proportion of medium users of bread has fallen steadily over the past 2 years, while the proportion of light users has risen.
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SOCIO-DEMOGRAPHIC ANALYSIS OF BREAD USAGE

By Age

An analysis by age reveals that the heaviest users of bread are housewives in the 35 to 44 age group, 19.1% of whom use six or more loaves each week. Household composition is undoubtedly an important factor here housewives in this age group are more likely than most to be providing for families with older children and teenagers, who tend to consume large quantities of bread in packed lunches, with meals, and/or as between-meal snacks.

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The age bands on either side of this group (25 to 34 and 45 to 54) also show heavier-than-average usage of bread, presumably for similar reasons.

Table 24: Usage of Bread by Age (% of housewives), 2001

Age 15-19 20-24 25-34 35-44 45-54 55-64 65+

Heavy Users 12.3 10.0 13.9 19.1 15.1 6.2 5.3

Medium Users 40.6 32.9 34.4 41.4 42.3 37.0 24.4

Light Users 46.5 56.3 50.6 37.5 41.0 53.7 65.9

Heavy users six or more loaves per week Medium users three to five loaves per week Light users two loaves or less per week

Source:Target Group Index (TGI), BMRB International Ltd, 2001

Bread usage drops sharply once housewives reach their mid-50s an age group that often coincides with children growing up and leaving home. This reinforces the importance of the family market in terms of volume consumption of bread.
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In the case of the over-65 year-olds, 65.9% of those responsible for the household grocery shopping say they consume two loaves of bread or less per week.

By Social Grade

The status of bread as something of a commodity product is confirmed by the fact that the highest usage is to be found among those in the C2, D and E socio-economic groups. Those in the higher-earning AB group are the lowest users of bread, with 7.8% using six or more loaves per week, and nearly six in ten (58.3%) using two or fewer. One reason for this is that bread especially standard white sliced loaves is a particularly cheap staple item in the diet, and it makes sense for those on lower incomes to consume it in greater quantities than more expensive alternatives. Eating habits might also play a part; for example, those in the AB and C1 socio-economic groups are generally more likely to be adventurous in their eating habits, and to experiment with foreign foods and other alternatives to bread.

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Table 25: Usage of Bread by Social Grade (% of housewives), 2001

Social Grade AB C1 C2 D E

Heavy Users 7.8 9.6 14.1 16.7 12.3

Medium Users 31.4 33.4 38.4 41.6 30.8

Light Users 58.3 55.2 45.0 39.3 53.5

Heavy users six or more loaves per week Medium users three to five loaves per week Light users two loaves or less per week

Source:Target Group Index (TGI), BMRB International Ltd, 2001

There is something of a polarisation among those in the E socioeconomic group, which contains a relatively high proportion of heavy users of bread, but also a high proportion of light users. This group is made up mainly of those on state benefits, including both pensioners (most of whom live alone or in two-person households, and as such consume less food generally) and families and younger people with very low incomes (for whom bread is likely to form an important part of their diet).
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By Region

There are still some strong regional variations in eating habits within the UK, and this is borne out by the fact that some areas notably Wales and the North of England have higher bread consumption than others. In Wales, 14% of housewives said that they use six or more loaves in a week, compared with 10.3 in the South West of England.

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Table 26: Usage of Bread by Region (% of housewives), 2001

Region Greater London South East/East Anglia South West Wales East and West Midlands North West Yorkshire and North Humberside Scotland

Heavy Users Medium 11.3 Users 10.6 10.3 14.0 12.6 11.1 12.7 13.3 11.9 29.4 34.1 33.4 37.8 37.9 38.7 35.4 35.0 34.9

Light Users 57.5 52.8 53.9 43.0 47.6 48.1 49.3 48.8 50.7

Heavy users six or more loaves per week Medium users three to five loaves per week Light users two loaves or less per week

Source:Target Group Index (TGI), BMRB International Ltd, 2001

By Presence and Age of Children

The presence of children in a household is an important predictor of bread usage. 10.6% of housewives with children in their household are heavy users of bread, compared to 4% of housewives with no children in their household.

Households with children in the pre-teenage and early teenage

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years are particularly likely to consume large quantities of bread 13.3% of housewives in households with children aged 10 to 15 use more than six loaves a week.

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Table 27: Usage of Bread by Housewives by Presence and Age of Children (% of housewives), 2001

Heavy Users

Medium Users

Light Users

All housewives No children in household Any children in household Children under 1 year Children 1-4 years Children 5-9 years Children 10-15 years

11.7 4.0 10.6 9.4 10.5 12.6 13.3

35.0 17.0 21.6 22.4 23.2 24.4 19.8

50.9 33.9 13.4 22.2 16.8 12.4 8.3

Heavy users six or more loaves per week Medium users three to five loaves per week Light users two loaves or less per week

Source:Target Group Index (TGI), BMRB International Ltd, 2001

HOUSEHOLD PURCHASING OF BREAD

According to the National Food Survey, just over a third of households (34%) bought white sliced standard bread during the week the 2000 survey was conducted, and just under one in four (23%) bought premium white sliced loaves. One in five bought wholemeal loaves in
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some form in the 2000 survey, with 16% buying brown bread. Rolls were purchased by 27% of households.

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Table 28: Percentage of Households Purchasing Each Type of Bread Within the Survey Week (%), 1999 and 2000

% 1999 White unsliced standard White sliced standard White sliced premium White soft grain, sliced Brown (sliced and unsliced) Wholemeal (sliced and unsliced) Rolls Malt/fruit bread Vienna/French bread Starch-reduced bread and rolls Sandwiches Other bread 14 35 21 2 17 20 27 4 15 2 5 15 2000 14 34 23 2 16 20 27 4 14 2 4 16 Difference 19992000 -1 2 -1 -1 -1 1

Source:National Food Survey/Key Note

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8. The Global Market

EUROPE

Bread consumption is static or falling in most European countries. German consumers eat the most bread, with an annual consumption of 84.8kg per person in 2000, considerably above the European average of 66.9kg. Denmark is in second place, with an average annual consumption of 74kg, while consumption is lowest in Luxembourg, at 50kg.

In contrast to the situation in the UK, the bakery market in mainland Europe still tends to be dominated by craft bakers. This is due in part to the fact that there is still a strong tradition in many European

countries of buying freshly-baked bread on a daily basis. However, over the past few years there has been evidence in some countries of a shift towards plantbaked bread. In France, for example, the market for plant-baked bread has been growing at 6% per annum, and in 2000 stood at more than 2bn (the total bread market was 6.3bn). This shift has been attributed partly to the fact that the French are now taking shorter lunch hours, leading to increased consumption of sandwiches.

There have been accusations in the media that French bakers have been using the introduction of the euro in January 2002 to increase their prices, with baguettes that should have cost 0.64 euros the equivalent of the old price of FFr4.20 (40 pence) being on sale at 0.69 euros, representing a price rise of 3 pence.

Corporate Developments

A franchise scheme, aimed at preserving artisan skills, has been set up in France by the countrys leading miller Grands Moulins de Paris
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(GMP). The scheme has 500 outlets throughout France, under the banner La Ronde des Pains. During 2001, a pilot scheme was set up in the UK, with an outlet being opened in a department store in Windsor.

Starbucks Coffee International, a wholly-owned subsidiary of Starbucks Coffee Company, has signed a joint venture with Europastry SA (which owns one of Europes largest bakery businesses) together with Madridbased restaurant and retail company Grupo Vips, and El Moli Vell, (a retail operator with over 170 cafs, bread and pastry shops in the Barcelona area). The deal marks Starbucks entry into the Spanish market.

New Product Development

The German bakery Pema has launched two varieties of wholemeal bread under the logo of the fitness magazine Fit for Fun. One of the loaves is made with orange juice, calcium, magnesium and vitamin D3, and the other is formulated with inulin prebiotic fibre.

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NORTH AMERICA

Corporate Developments

Republic-of-Ireland-based company IAWS Group PLC (Irish Agricultural Wholesalers Society), which acquired Cuisine de France in 1998 and Delice de France in 1999, bought an 80% stake in the Los-Angelesbased La Brea, which supplies artisan bread to restaurants, supermarkets and other retailers. Both Cuisine de France and Delice de France also operate in the US.

In 2001, Sara Lee Corporation bought Earthgrains Co., the secondlargest bakery firm in the US, in a deal that will more than quadruple Sara Lees annual bakery sales. Earthgrains has 61 bakeries and two refrigerated dough plants in the US, and 12 bakeries and four refrigerated dough plants in Europe.

New Product Development

The wholesale bakery operator Interstate Bakeries has reformulated some of its bread varieties to increase their shelf life from 3 days to 1 week

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