BREAD. International Markets Bureau AMERICAN EATING TRENDS REPORT OCTOBER 2012 CONSUMPTION DEMOGRAPHICS
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1 International Markets Bureau AMERICAN EATING TRENDS REPORT BREAD Unless otherwise stated, all of the information in this report was derived from the NPD Group s National Eating Trends database, updated to November 2010, and reflects the eatings (defined by NPD as the number of times any particular category/item is eaten by an individual in a specified location or time period) of a product at home or carried away from home. These figures do not reflect purchases of food products made through foodservice establishments, or the consumption thereof. NPD monitors the eating habits and attitudes of American consumers by surveying 5000 individuals reporting on 14-day s continuous consumption of all meals and snacks. CONSUMPTION DEMOGRAPHICS Bread is a staple food in the diets of many American consumers, as confirmed by NPD s National Eating Trends survey which found that 68% of consumers reported eating bread in a two-week period, a frequency more than six times higher than the reported eatings of bagels, buns or crackers. Annual, per-capita consumption of bread at home or carried from home by Americans was 77 eatings in This is down slightly from the 80 eatings reported in 2006, but up from the low of 73 eatings per person, per year in Core Markets (at least 20% above average consumption rate) Adult men and women 55 years and older; Households with annual incomes of less that US$10,000; Households headed by a homemaker* with some high school education; Single and married active seniors; and Black/non-Hispanic ethnic groups. Underdeveloped Markets (at least 20% below average consumption rate) Children years of age; Males years; Affluent traditional families; Dual-income families without children; Households with annual incomes of US$40,000-US$49,000; and Households headed by homemakers* aged years. RETAIL SALES Total retail sales of bread in the United States (U.S.) were US$21.4 billion in 2010, according to Euromonitor (2011), with a compound annual growth rate (CAGR) of 1.6% since Sales are expected to increase a further 2.3% in 2011 and, by , are expected to reach US$23.6 billion (CAGR of 1.2%). American consumers continue to embrace packaged/industrial bread, which accounts for about 66% of retail sales. Sales of packaged white and specialty breads have shown weakness over the period, while sales of packaged whole wheat bread have grown. In fact, in 2010, sales of whole wheat bread surpassed sales of white bread for the first time. Euromonitor has attributed this shift to a number of factors, including more sophisticated consumer tastes and their desire for heartier more nutritious food. Changes made by manufacturers have also influenced this shift, such as the removal of high-fructose corn syrup, lowering sodium, and experimenting with more exotic or ethnic varieties and new formats, like thinner slices. Despite increasing consumer interest, national brands have yet to respond to the gluten-free trend, which is currently a niche market. *The homemaker is defined by NPD as the head of the household or the primary food shopper, who is typically female. 1 Actual retail sales for 2011 not available at time of report publication.
2 RETAIL SALES (continued) Retail sales growth has also been observed for unpackaged breads/artisanal breads, which account for about 33% of sales. Sales have reported a CAGR of 1.4% over the period, but are expected to slow somewhat to a CAGR of 1% to Sales of bread substitutes experienced small declines between 2006 and 2010, and this pattern is expected to continue to Approximately one-quarter of all unpackaged/artisanal breads are sold through in-store bakeries, although the share increased gradually since Overall growth in bread sales has been led by increases in wheat prices, as the volume of retail bread sales dropped over the period (CAGR of -3.2%) and is forecast to decrease by an average of 0.6% annually to Decreases in volumes have occurred relatively consistently across all categories of packaged and unpackaged products. Value of U.S. Retail Sales of Bread, US$ millions, Historic/Forecast Categories CAGR CAGR Packaged/industrial bread $13,189.1 $14,345.1 $14,753.9 $15, White* $3,574.2 $3,012.5 $3,009.8 n/a n/a Whole wheat* $2,440.0 $3,155.9 $3,378.6 n/a n/a Specialty* $1,318.9 $961.1 $870.5 n/a n/a Unpackaged/artisanal bread $6,498.0 $6,955.2 $7,050.4 $7, Bread substitutes** $124.9 $121.2 $119.6 $ Total bread $19,812.1 $21,421.5 $21,923.9 $23, *Estimated based on share of retail sales of packaged/industrial bread in each year. **Bread substitutes include products such as crisp breads, bread sticks, and croutons. Source: Euromonitor, 2012 Categories Source: Euromonitor, 2012 Volume of U.S. Retail Sales of Bread, 000 tonnes, Historic/Forecast CAGR CAGR Packaged/industrial bread 4, , , , Unpackaged/artisanal bread 1, , , , Bread substitutes Total bread 5, , , , CONSUMPTION CALENDAR Bread is consumed during the week 70.8% of the time and on the weekends 29.2% of the time. During the week, bread consumption peaks on Thursday (14.8%), and is lowest on Friday (13.9%). Consumption of bread is evenly distributed throughout the seasons, but falls by more than 50% during holidays. PAGE 2
3 PLATE COMPOSITION Bread is eaten in-home during meals 97% of the time, in-home as a snack 2% of the time, and carried away from home as a meal or snack 1% of the time. Breakfast is the most popular meal occasion during which bread is eaten at home (53.8% of eatings), followed by dinner (33.5% of eatings) and lunch (9.7% of eatings). Bread is most often eaten as a snack in the evening. Americans who consume bread at home during a meal primarily use it as a side dish (54.5%), as part of a main dish (35.1%) and as part of an appetizer (2.3%). PREPARATION METHODS Bread is eaten warm by Americans 71.2% of the time it is most typically prepared using a toaster or toaster oven (52.5% of the time) or warmed in the oven (12.2% of the time). Bread is eaten not warmed or cooked 28.8% of the time. CONSUMPTION BY REGION Consumers in the East North Central states accounted for the highest share of eatings (21%) in 2010, followed by consumers in the South Atlantic (16%), Middle Atlantic (14.2%) and Pacific (12.3%) states. Compared to the overall U.S. average of 77 eatings per year of bread, consumers in the West and Central regions eat bread 83 and 81 times per year, respectively. Within the West, consumers in the Pacific region led eatings of bread at 90 times per year. Pacific OR CA WA NV ID AZ Mountain UT MT Source: U.S. Census Bureau United States Census Regions WY NM CO W.N. Central ND SD NE W.S. Central KS TX OK MN IA MO AR LA E.N. Central WI IL IN MS MI KY TN AL OH E.S. Central Mid Atlantic PA N Y WV VA NC SC GA FL NH VT New England NJ CT ME MA RI South Atlantic Eatings by U.S. Region North East New England 3.6 Mid-Atlantic 14.2 Central East North Central 21.0 West North Central 9.7 South South Atlantic 16.0 East South Central 8.1 West South Central 8.0 West Mountain 7.0 Pacific 12.3 Source: NPD Group. PAGE 3
4 CANADA-U.S. TRADE According to Statistics Canada, total Canadian exports of bakery products (including bread, pastries, cakes, biscuits and similar bakery products) to the U.S. rose from C$753 million in 2002 to C$1 billion in There appears to be no relationship between the share of the population in each of the U.S. regions and their share of Canadian bakery product exports. For example, the largest share of bakery product exports were destined for the Central region (36% in 2002 and 40% in 2010), which was considerably higher than the population share for this region. Canadian Exports of Bakery Products to the Continental 1 U.S. by Region 2, 2002 and ,200 C$ Axis millions Title 1, North East Central South West Total Source: Statistics Canada. 1 For the purposes of this report, the continental U.S. does not include Maryland, Washington D.C. or Delaware, to remain consistent with NPD data collection. 2 Population shares for the regions were as follows: 2002: North East 19%, Central 23%, South 35%, West 23%. 2010: North East 18%, Central 22%, South 36%, West 23%. PAGE 4
5 PRODUCT POSITIONING A search in Mintel s Global New Products Database for bread products launched between May 2008 to April 2012 found 564 new products. The search was specific to the Bread & Bread Products sub-category and excluded sweet, fruit, and some vegetable flavours to avoid duplication with products contained in other American Eating Trends Reports. There were 395 branded products and 169 private label products. As the Mintel database does not capture bread products sold through in-store or other bakeries, the following discussion only considers packaged bread products. Bread Products in the U.S. Private Label vs. Other, May 2008-April 2012 Private Label 30% Other 70% Source: Mintel GNPD, Top Five Companies Bread Products in U.S. May 2008-April 2012 Company Number of % of Total Products Launches Bimbo Bakeries 33 6% Roundy's 20 4% Pepperidge Farm 17 3% Supervalu 17 3% Kroger 17 3% Other % Total products % Source: Mintel GNPD, Top Five Flavours of Bread Products in the U.S. May 2008-April 2012 Flavour Number of Products Unflavoured/plain 434 Garlic 26 Seed 7 Butter 5 Cheese (unspecified) 5 Source: Mintel GNPD, PAGE 5
6 PRODUCT POSITIONING (Continued) From May 2008 to April 2012, wholegrain, low/no/reduced trans fat and low/no/reduced cholesterol were the most popular specified claims for breads launched in the U.S., according to Mintel. New Bread Product Introductions in the U.S. by Top Five Claims, May 2008-April 2012 Kosher 90 No additives/preservatives 113 Low/no/reduced cholesterol 115 Low/no/reduced trans fat 144 Wholegrain Source Mintel GNPD, Number of products Of the 564 new products launched in this time period, the majority (42%) were new variety/range extensions, while new products and new packaging each represented 40% and 16% of launches, respectively. New Bread Products Introductions in the U.S. by Launch Type, May 2008-April 2012 New packaging 16% New formulation 2% Relaunch 0% New product 40% New variety/range extension 42% Source: Mintel GNPD, PAGE 6
7 NEW PRODUCTS The following are some examples of new packaged bread products launched in the U.S. market from the Mintel Global New Products Database (2012): Brownberry Wholegrains Oatnut Bread has been repackaged into a bread with 13 g of wholegrains per slice, and 4 g of fibre per two slices. It is free of high fructose corn syrup, artificial colours or flavours, trans-fat, and cholesterol. It retails in a 1-lb 8-oz. pack, double-wrapped for freshness. Nature s Own Specialty Soft Oatmeal Bread is free of high fructose corn syrup, artificial preservatives, colours, flavours, cholesterol and trans fat. Perfect for toast in the morning, the bread can also make a creative sandwich for lunch or dinner, or a snack any time in between. This low-fat product is made with premium ingredients that are carefully combined and then baked to perfection. it is retailed in a 24-oz. pack. Joseph's Flax Oat Bran & Whole Wheat Lavash Bread is super soft, and is said to help protect the heart during weight loss. It is an excellent source of Alpha-Linolenic Acid (ALA) omega 3, contains no trans fats or cholesterol, is high in protein and is reduced in carbs and fat. The kosher-certified product contains only 50 calories per serving and retails in a 9-oz. pack containing four square breads. Rudi's Multigrain Sandwich Bread is a gluten-free product that is made with all-natural ingredients. The product is kosher certified and retails in a 18-oz. bag. It is also available in Original and Cinnamon Raisin varieties. Healthy Life Sugar Free 100% Whole Grain Wheat Bread has been repackaged and now retails in a 16-oz. pack featuring a new design. The bread is sweetened with Splenda and is a good source of fibre, which promotes digestive health and helps consumers feel full and satisfied. It is low in calories and is 98% fat free. Each slice contains 40 calories and 7 g of carbohydrates. Two slices contain 21 g of whole grains, which contain antioxidants that fight free radicals. This product contains no bromate, hydrogenated oil, trans fat, saturated fat or cholesterol. Source for all images: Mintel GNPD, Village Hearth Pennsylvania Dutch Potato Bread is described as a moist bread with full flavour and a rich aroma. It is baked with a combination of wheat flour, potato flour and honey. The sliced bread retails in a 24-oz. pack. PAGE 7
8 MARKET OPPORTUNITIES According to Euromonitor, retail sales of bread in the U.S. were US$21.4 billion in 2010 and have been growing at a compound annual growth rate of 1.6% since Sales are expected to increase a further 2.3% in 2011 and, by 2016, should reach US$23.6 billion. Traditional branded loaf breads are facing greater competition from private label and in-store bakery breads, likely due in part to their freshness and price (Mintel, 2011), and to unpackaged/artisanal breads because they are perceived by consumers to be of premium quality and healthy. Retaining Key Markets (targeting those who currently report high consumption rates) Core markets for bread have been single or married older consumers (55+ years), lower income households and Black/non-Hispanic consumers. For these consumers, price, longer-shelf life (less product waste is desired in the current economic climate [Mintel, 2012]), easy-to-use formats, as well as improved nutritional attributes in line with the greater health interest and awareness of older consumers are important considerations. Extending the Market (targeting those who currently report mid-range to low consumption rates) In recent years, loaf bread has lost market share, mainly to alternatives such as rolls/buns, bagels, English muffins, tortillas (for wraps) and croissants. Much of this shift away from loaf bread and toward other types of bread-products has taken place to meet the taste demands of younger eaters (children and young adults), and of more affluent traditional or dual-income families without children. The challenge for manufacturers is to regain these consumer segments. This may mean increasing their nutritional profile and promoting healthier attributes which could include whole/ancient grains, flax seeds, chia seeds with high omega-3 content, gluten-free, all natural ingredients, high in protein, lower in sodium, fortified with vitamins/minerals, etc. KEY RESOURCES Euromonitor International. Passport GMID. (2012). Euromonitor International. Passport, Bread in the U.S. (September, 2011). Mintel. Bread, Bakery and Cakes. (April, 2012). Mintel. Bread U.S. (November, 2011). Mintel. Global New Products Database (2011). The NPD Group National Eating Trends database, for the year ending November Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food Canada (2012). The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri-Food Canada assumes no liability for any actions taken based on the information contained herein. For more information, or to request additional copies or an alternate format of this publication, please infoservice@agr.gc.ca or contact the International Markets Bureau - Agriculture and Agri-Food Canada, 1341 Baseline Road, Tower 5, 4th floor, Ottawa, ON Canada K1A 0C5 PAGE 8
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