Warburtons banking on bread market growth
of the UK bread market, having doubled output in Scotland and
started building Europe's biggest bakery in Yorkshire - so just how
does the company see itself and the market developing in the next
few years? Chris Mercer finds out.
Last week Warburtons opened a £15 million extension to its Bellshill Scottish bakery, a move which should soon see the plant producing 1.5 million loaves every week, 800,000 more than previously.
"We did it because of the sales growth in the Scottish market. Scotland just seems to love Warburtons bread," said company marketing director Roz Cuschieri, who added that Warburtons was now the sixth biggest grocery-brand in the country.
But it is not just Scotland that has grabbed the company's attention. A new £60 million Yorkshire bakery, due to be finished next summer, will quadruple the company's bread production in that region.
According to Cuschieri, it's all about Warburtons playing to its strength as a regional organisation: "One of our brand aspirations is that we try to provide the freshest, softest premium brands to the market and to do this we need to have plants really close to our points of sale."
Warburtons' commitment to freshness is the main reason why the company has chosen not to develop any long-life products, and Cuschieri believes it is a strategy that is working. "In all the areas we trade and have been trading in for four years, we are the number one bread brand," she said.
Once finished, the Yorkshire bakery will be the twelfth and biggest Warburtons bakery, producing around two million loaves of bread and 500,000 bread rolls per week for what it hopes will be a profitable market.
Current figures from the UK Federation of Bakers claim that the country's bread market is worth more than £3 billion, having risen slightly above expectations since 2001.
And data from market analysts Mintel shows that more than 80 per cent of production is from plant bakeries, with Warburtons sitting third behind UK giants Allied Bakeries and British Bakeries.
"I see the UK bread market continuing to grow from a value perspective and as for what the bakery market has to offer, I think innovation will be critical," said Cuschieri, adding that there was particular room for growth in the speciality breads sector.
"Consumers are becoming far more comfortable with experimentation. If products fulfil a role, satisfy a need and are appropriately priced then consumers will buy them," she said.
Mintel says that own-label is now the biggest collective brand in the speciality sector, with a number of product launches at the value-added end such as Sainsbury's Italian Style Pesto Bread and Tesco's Garlic and Parsley Platter bread.
Warburtons, too, has attempted to get a foothold in speciality breads, one example being its Bake & Share line of continental style ready-to-bake flat bread.
In terms of competition from own-label products, Cuschieri said that she was not overly concerned and was confident of the continued success of Warburtons' focus on fresh, premium products; Warburtons does not make any own-label bread, unlike rivals Allied Bakeries and British Bakeries.
"Own-label offers the consumer a choice and from the consumer perspective it's good to have a mix. I would view it as healthy competition," said Cuschieri.
Meanwhile, the company continues to thrive on innovation, recently launching its new Best Muffin Toast which it claims combines the practicality of toast with the taste of a muffin.
"We see this as a more healthy kind of treat, providing a good mix of carbohydrates and nutrients that can be enjoyed at any time of day," said Cuschieri.
Health, of course, is already playing a much documented role in all food innovation and bread is no exception, having also been subject to criticism by low-carb dietists due its traditionally higher carbohydrate content.
Cuschieri believes that "all companies have a responsibility to continuously innovate and assess what consumers want, and if we keep doing that then we can continue to grow."
Last summer Warburtons branched out from its homelands in northern England and Scotland by opening a bakery in Enfield, North London. "Our plans are to be, in time, a national company, however long this may take," said Cushieri.
And despite the company's recent building craze, the marketing director believes the company will not expand beyond its means: "We will lay down new facilities at our own pace."
