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Bread: Inc Impact of COVID-19 - UK - September 2020
Overview
 
47% of people who eat and buy bread agree that eating a lot of bread is unhealthy. This is despite steps from the industry to improve the health credentials of their products over recent years. This poses a continuing challenge to the market in terms of growing volume sales. Furthermore, the growing spotlight that COVID-19 has brought onto the state of the nation’s health further dials up the need for bread brands to push their health credentials.

The recession and income squeeze triggered by COVID-19 will mean that consumers will be looking to make savings, with packed lunches and having breakfasts at home providing easy economising wins. As such, bread has the potential to benefit from this cost-cutting behaviour. Furthermore, more working from home is predicted to be a long-term result of the pandemic, meaning more potential meal occasions for bread. However, emphasising the versatility of bread will be crucial in order to compete with other lunchtime foods and tap into consumers’ love of variety.

The healthiness of bread will remain a key consumer concern going forward. While the government has renewed its pledge to fight obesity, eating healthily has become a higher priority for nearly a third of consumers since the COVID-19 outbreak. As a result, providing consumers both with the benefits they find appealing in bread and those they would wish to gain from an ideal diet will be crucial in order for brands to navigate the post-COVID world.

Immunity is likely to be a greater concern for consumers going forward due to the nature of the COVID-19 pandemic. This provides opportunities for bread brands, given the links already being made within the media between fibre intake and gut health, and the positive effect that this may have on immune health. Vitamin fortification can also help bread brands to capitalise on this increased interest in immunity, with various vitamins approved for immune system claims by EFSA.

Key issues covered in this Report
●	The impact of COVID-19 on the bread market
●	Launch activity and opportunities for 2020
●	Factors that consumers find appealing in bread
●	Purchase and usage of bread
●	Consumer behaviours and attitudes related to bread
●	Where people buy bread

COVID-19: Market context
The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20 March. The leading supermarkets closed their in-store bakeries in order to make staff available to essential tasks as the retailers responded to the upsurge in demand.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. Initially, a three-week timeframe was put on the measures, which was extended in mid-April for another three weeks.

The Health Protections Regulations 2020 came into effect on 15 June allowing the reopening of all non-essential stores in England as well as the mandatory use of face coverings on public transport. On 23 June, the Prime Minister announced that where two metre social distancing was not possible in an enclosed space, additional mitigation should allow people to only keep ‘one metre plus’ apart, enabling smaller businesses that were unable to implement the two-metre rule the possibility to open again. Pubs, restaurants, hotels and hairdressers were able to reopen on 4 July.

From 24 July, it became mandatory to wear face coverings in shops and supermarkets. From 1 August, the government changed its guidance about asking people to work from home where they can, giving employers in England more freedom to decide whether staff should return to their place of work. Schools reopened at the beginning of September with social distancing measures in place. However, with a steady rise of cases since July, local lockdowns have begun to be implemented as well as further social restrictions. On 14 September, a ‘rule of six’ was introduced limiting social gatherings both indoors and outdoors to six people. The government also abandoned its push to get more people back to the office and announced that those who can work from home should do so. The government stated that such measures could stay in place for six months.

Whilst another nationwide lockdown is unlikely, stricter lockdown regulations in large cities including London appear increasingly likely at the time of publication.

Economic and other assumptions
Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty means that there is wide variation on the range of forecasts however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

Products covered in this Report
The market size includes white, brown and wholemeal loaves, including with various additions, which may be sliced or unsliced, wrapped or unwrapped, as well as speciality bread. A distinction is drawn between bread that is baked by plant/factory bakeries and stocked on grocery shelves (also called pre-packed bread), and bread that is baked by in-store bakers. Part-baked products are also included.

For the purposes of this Report, the speciality bread market is taken to include: bagels, baguettes, pittas, wraps, sandwich thins, naan breads other Indian breads including chapattis, and garlic bread (ambient and chilled).

Sweet baked goods are excluded from this Report and can be found under Mintel’s Cakes, Cake Bars and Sweet Baked Goods: Inc Impact of COVID-19 – UK, April 2020 Report.

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