The 120-year old former Irish co-op Aryzta experienced a whopping 7.6% increase in retail sales over the period, while Sara Lea maker Grupo Bimbo and Dave’s Killer Bread producer Flowers Foods continued to shine in the sector, each noting a 2.2% rise in retail sales.
However, there was not much change in the overall bakery sector, with a mere 0.1% rise to $13.31bn from the year prior, according to IRI data.
Unit sales dropped -0.4% to just more than 5.7bn units, while price rose a nominal $0.01 to an average price of $2.31.
Top selling bakery categories (excluding sweet baked goods)
Source: IRI 52w/3 June 11, 2017. IRI is a Chicago-based market research firm (@iriworldwide)
Changing tastes and other challenges
Bread endures as a staple of the US diet, although consumers are eating it less frequently and in smaller quantities.
Changing nutrition trends has negatively impacted US bread production over the past five years.
Market researcher Mintel said consumers generally have a negative health image of bread - carbs, sodium and fat levels – and operators have had to scramble to keep up with changing fads like low-cal, whole grains, artisanal and gluten-free.
The latter trend is having an ever-reaching effect of turning away even hard core bread-loving Americans, not just those with a coeliac allergy.
Top 10 US fresh bread suppliers
Source: IRI 52w/3 June 11, 2017. IRI is a Chicago-based market research firm (@iriworldwide)
Soft start
Compounding this, the industry has faced volatile input costs – especially from wheat and sugar – and rising competition.
According to Allen Shiver, CEO of Dave’s Killer Breads producer, Flower Foods, the bakery market remains highly competitive “as retailers and bakers finds a balance between improving margins and building market share”.
Alfred Penny, president of Bimbo Bakeries USA, concurred, stating during Grupo Bimbo’s Q1 2017 earnings call that the industry has definitely experienced a soft start to the year.
Armed with IRI data for the 52 weeks, ending June 11, 2017, BakeryandSnacks examined retail sales performance of the largest suppliers in key bread sectors (excluding sweet baked goods) of the US market in 2017 so far.
Mexican conglomerate Grupo Bimbo continued to dominate the entire sector, claiming the number one spot in several sub-categories; and no less than third or fourth position in others.
Flowers Foods followed, along with Campbell Soup, General Mills, United States Bakery and Lewis Bakeries.
Top 10 US suppliers of other fresh rolls, buns and croissants
Source: IRI 52w/3 June 11, 2017. IRI is a Chicago-based market research firm (@iriworldwide)
A fallen result
Fresh bread followed its historical downward trend, with retail sales falling -0.2% to the value of $9.09bn during the 12-month period.
Hamburger and hot dog buns also fell (-1.4%) to $1.97bn; as did pita breads and bagels (both -2.5%) to $834m and $113.2m respectively.
Likewise, Shiver, noted Flowers Foods’s fresh packaged breads category was down 1.1% during Q1 2017.
Top 10 US hamburger and hot dog buns suppliers
Source: IRI 52w/3 June 11, 2017. IRI is a Chicago-based market research firm (@iriworldwide)
Rising to the occasion
Conversely, he said organic breads are aligned with today’s consumer trends and are clearly the highlight of the bread category.
“We are excited about the opportunity we have with Dave’s Killer Bread… the leading organic bread brand in the US,” he said, noting the response to the launch of DKB bagels and breakfast bread in Q2 has been “very strong,” enabling the company “to gain traction”.
Top 10 US bagels/bialys suppliers
Source: IRI 52w/3 June 11, 2017. IRI is a Chicago-based market research firm (@iriworldwide)
Top 10 US pita bread suppliers
Source: IRI 52w/3 June 11, 2017. IRI is a Chicago-based market research firm (@iriworldwide)