Bread is the most-important category in the baking industry—but also one of the most-challenging for building appreciable growth. For the 52 weeks ending November 4, 2018, the fresh bread and rolls category grew 0.13 percent in dollar sales to $13.4 billion, per IRI, Chicago.

IRI breaks the category into four segments. Fresh bread was up 0.23 percent to $9.1 billion. Several of the top 10 companies operating in this segment saw moderate gains for the year: Grupo Bimbo grew 0.69 percent to $2.5 billion, Flowers Foods grew 3.53 percent to $2.0 billion (likely thanks to its Dave’s Killer Bread brand), Lewis Bakeries grew 2.95 percent to $184.0 million, Pan-O-Gold Baking Co. grew 4.76 percent to $99.8 million and H&S Bakery grew a healthy 14.72 percent to $98.8 million.

The hamburger and hot dog buns segment within fresh bread and rolls was down 1.47 percent to $2.2 billion. Private label is the segment leader and was up 0.06 percent to $784.3 million. Other bright spots: Martin’s Famous Pastry Shoppe grew 0.18 percent to $196.6 million, Campbell Soup Co. grew 5.57 percent to $133.1 million, United States Bakery grew 2.13 percent to $38.7 million, H&S grew 0.71 percent to $34.0 million and King’s Hawaiian Bakery West grew a notable 10.2 percent to $29.5 million.

The all other fresh rolls/buns/croissants segment grew 1.60 percent to $2.0 billion. Again, private label leads the segment and was up 0.62 percent to $545.7 million. Other areas of positive gains: King’s Hawaiian grew 3.71 percent to $491.2 million, Campbell Soup Co. grew 5.20 percent to $104.5 million, Carrs Food International grew 115.3 percent to $18.4 million (likely spurred by its St Pierre brioche brand) and Lewis Bakeries grew 0.08 percent to $17.4 million.

Pita bread rounds out the four IRI segments of fresh bread and rolls and was down 1.93 percent to $115.0 million. Middle East Bakery leads the segment and was up 29.35 percent to $35.0 million. Other notable gains in the segment: Private label grew 28.32 percent to $13.0 million, Papa Pita Bakery grew 60.72 percent to $9.3 million, Paramount Baking Co. grew 17.90 percent to $2.4 million and Kontos Foods grew 8.15 percent to $2.2 million.

The bagels category saw good growth of 5.85 percent to $910.2 million. Grupo Bimbo leads the category and was up 4.18 percent to $592.5 million. Other gains: Flowers Foods grew 95.67 percent to $53.6 million (likely due to traction from its Dave’s Killer Bread brand), United States Bakery grew 11.60 percent to $23.9 million, Toufayan Bakery grew 26.29 percent to $6.8 million, Papa Pita grew 1.06 percent to $6.2 million and Canyon Bakehouse grew 224.01 percent to $4.7 million.

The English muffins category was down 2.20 percent to $715.1 million. Private label sits in the No. 2 spot in the category and grew 2.99 percent to $64.3 million. Other areas of growth: United States Bakery grew 2.64 percent to $13.6 million, Pinnacle Foods Group grew 232.36 percent to $2.9 million and Pan-O-Gold grew 0.33 percent to $2.0 million.

In the foodservice market, Datassential, Chicago, notes that brioche has been one of the fastest-growing sandwich carriers over the past four years, up 97 percent. Other carriers of note include biscuits, which grew 50 percent, and pretzel buns, which grew 24 percent. When just looking at breakfast sandwiches, brioche is up 86 percent.

Mike Kostyo, trendologist, Datassential, notes that the breakfast daypart is seeing strong growth. “The overall growth of breakfast sandwiches on menus—up over 25 percent in the past four years—suggests that plenty of operators are finding ways to cross-utilize carriers across dayparts.”

So what’s next in sandwich carriers at foodservice? “Some of the fastest-growing carriers in the past year take the options that are already trending to the next level with descriptors that evoke artisan craftsmanship or an even more-premium connotation,” says Kostyo. “We’re seeing a rapid growth in terms like ‘butter croissant,’ ‘honey wheat’ and ‘buttermilk biscuit’ on menus. When we filter our data on the most-innovative restaurants across the country, we also see fast growth in potato rolls, Texas toast, pumpernickel bread, marble rye, artisan pita breads and naan.”

Ethnic sandwiches are a particular bright spot. “All of the fastest-growing sandwich options on menus are globally inspired, with the top spots taken by the torta (430 percent growth over the past four years), tartines (up 93 percent), bánh mì (up 40 percent), croque monsieur (up 26 percent), croque madame (up 25 percent) and Cuban sandwiches (up 21 percent),” says Kostyo. “So the market is certainly growing for carriers that lend themselves to these sandwiches.” He notes that bakers should also consider ways to market nontraditional carriers for these sandwiches to help operators stand out and create something new, like a croque monsieur bagel.

In-store bakery en vogue

Thanks to the combination of freshness and artisan selling points, the in-store bakery (ISB) has seen notable growth of late.

“Over the past few years, the ISB has outperformed packaged bread in sales,” says Nicole Rees, product director, AB Mauri North America, St. Louis. “Not only do consumers like the variety of options that ISB retailers offer, but they also prefer the perceived freshness and even smaller portion size options from this segment. Furthermore, the ISB can offer seasonal and experimental flavor choices that often appeal to the senses of nostalgia and adventure that are important to end consumers.”

The ISB has an opportunity to produce special, seasonal products, including those that fit with the growing trend toward heathier food, as well as individualized and creative options, notes Anna-Maria Fritsch, head of marketing, Fritsch Group, Idar-Oberstein, Germany.

Consumers have shown strong preferences for foods that are simple, fresh, local and free from additives, notes Don Trouba, Sr., director, go-to-market, The Annex by Ardent Mills, Denver. “These are the product attributes propelling double-digit sales growth in the marketplace. Hand-made, hand-milled and hand-crafted are all techniques that speak to the demand for ‘the less processed, the better,’ which is important for ‘artisan,’ ‘baked in house’ offerings. Ingredients that show natural texture—whole seeds, whole grains, etc.—have great appeal.” He notes that Ardent Mills research has shown that label terms like “farm to table” and “ancient grains” resonate.

“As consumers continue to look for ‘local’ items, or products perceived as less-processed, the ISB is an outlet for these purchases,” says Matt Gennrich, senior food scientist, R&D, bakery applications, Cargill, Plymouth, MN. “Whether or not the ISB products promote clean label, organic or non-GMO ingredients, those consumers shopping the perimeter of the store will encounter the ISB instead of the typical bread aisle.”

The ISB attracts consumers to the bread category by leveraging a highly sensory experience, suggests Cam Suarez-Bitar, marketing and public relations manager, Bellarise, Pasadena, CA. “For instance, since ISBs bake their breads fresh, the aroma of French baguettes could meet consumers at the door and pull them toward the perimeter.”

The retail ISB often has an open floor plan that allows consumers to see the bakers in action, notes JoAnn Rupp, global market insights manager, Corbion, Lenexa, KS. “Therefore, consumers trust the products are made fresh and with ingredients that can be found in their own kitchen cabinets. As consumers continue to look for high-quality, nutrient-dense options that meet their health and wellness needs, many have already started shopping the perimeter of grocery stores, resulting in increased sales of ISB breads and fewer packaged bread items. We anticipate this trend to continue in 2019, especially among young consumers who are more likely to seek products made with all-natural and wholesome ingredients.”

Top trends to drive R&D

“Clean label is the single, biggest trend in the bread aisle,” says Gennrich. “In the bread space, this means the removal of some legacy emulsifiers such as DATEM and mono- and diglycerides. Fortunately, we have had good success replacing these ingredients with lecithin in bread formulations.”

Another trend is tied to healthy ingredients, continues Gennrich—specifically plant protein. “We continue to see a lot of interest in bread prototypes that offer a ‘good source’ of protein.”

Rees notes that positive messaging around healthy benefits from wholesome ingredients—including whole grains, fiber, protein, pulses and even vegetable and fruit flours—has found its way into everyday dialogue and should factor into R&D for new bread products.

“We see an increasing demand for healthy, high-nutrient-value breads and rolls,” says Richard Breeswine, president and CEO, Koenig Bakery Systems, Ashland, VA. “Consumers demand a large variety of breads and rolls with high-nutrient ingredients and specialty breads, such as gluten-free, rice or potato breads.”

Potato ingredients can bring new levels of functionality to breads. “When used in breads, dehydrated potatoes offer functional benefits, including a softer texture, longer-lasting freshness and better browning capabilities,” says Rachael Lynch, global marketing manager, Potatoes USA, Denver.

“Consumers are looking at ingredients and healthier labels,” says Nick Magistrelli, vice president of sales, Rademaker USA, Hudson OH. “Also, they want to see lower fat content and calories.” He notes that these consumers are often willing to pay more for their breads.

Healthy snacking is a top trend—and one that bread can capitalize on. “Consumers are increasingly shifting away from eating three meals a day and instead choosing to enjoy smaller, wholesome meals on the go due to their busy lifestyles,” says Rupp. These could feature nutrient-dense, whole-grain, clean-label breads.

Fritsch notes that an opportunity exists for using portion-controlled versions of breads, such as bagels, rolls or demi baguettes, as a base for snacks. For instance, Portuguese pan con chorizo features chopped pieces of chorizo wrapped into the dough before baking. “We also see a trend toward significantly higher quality standards in terms of raw materials used, e.g. superfoods or ancient grains, especially kamut and amaranth as an additive to wheat flour,” she says.

People are hungry for the “who, what, where and why” behind the foods they eat, notes Trouba. “Grains have great stories to tell.” He points toward White Sonora Wheat, which was a staple wheat in the U.S. during the 1700s and 1800s and today is enjoying a rediscovery.

Transparency is also non-negotiable with today’s millennial consumers, suggests Rees. “They want to be better informed and feel good about the choices they make, so clean labeling is here to stay. This trend will continue to grow—even outside of the storefront to products sold through the ISB and foodservice.”

From an R&D perspective, clean label and organic are definitely important, notes Jerome Davis, technical solutions analyst, Innovative Bakery Resources, Tualatin, OR. He believes that consumers would prefer organic over conventional if the products are economically comparable.

“Organic breads are growing at a fast rate, and you see that trend in the bun/roll categories,” says Magistrelli.

Organic and non-GMO products are a key growth area, notes Gennrich. “While these remain smaller segments of the overall market, they are often growing at the fastest rate.”

Trends continue to follow a clean-label paradigm shift, with organic and non-GMO leading the way, says Suarez-Bitar. “We’re also seeing commercial bakeries develop more artisan-style breads that compete more directly with ISB offerings, and that present a more-holistic approach to industrial baking. Ancient grains, sprouted and whole wheat, and inclusions that enhance flavor and texture, have also gained momentum.”

When a shopper finds a bread that meets their desires for better-for-you and clean label—and hits home on eating quality—that cultivates loyalty. “When consumers see that a bakery responds to their expectations,” says Suarez-Bitar, “they know they are being listened to, and a conversation—a relationship—develops between baker and consumer.” And those relationships are worth their weight in gold. 

For a companion feature covering R&D insights for foodservice, see “Developing breads, buns and rolls to meet top U.S. foodservice trends” on www.snackandbakery.com.