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Bread - US - September 2007

SCOPE AND THEMES
What you need to know
Definition
Data collection
Abbreviations and terms
Abbreviations
EXECUTIVE SUMMARY
Market at a glance
Fresh bread—the biggest segment exhibits less than promising sales growth
Top six manufacturers account for nearly half the sales
Supermarkets continue to sell the most bread in the U.S.
Bread consumers
Household bread usage by type
Household frequency of using fresh bread
Forms of bread used in households
Choice of retail channels for purchases in the past two weeks:
Changes in buying behavior
Importance of value proposition, health attributes, and consumer loyalty in purchasing bread
Willingness to try new products
Why consumers are eating more whole grain bread
Future trends
Bread industry is positioned for more profitable operation
Bread marketers are meeting consumer expectations
MARKET DRIVERS
Bread is a mature market
Household consumption of bread on decline
Figure 1: Frequency of household consumption of bread, 2002-06
Eating out trends negatively impact bread usage
Figure 2: Spending on dining out, by age, 2001-05
Figure 3: U.S. sales of QSR sandwich restaurants, at current and constant prices, 2004-06
Growing diversity of U.S. diet results in fewer bread purchases
Growing incidence of obesity unravels the bond between people and bread
Figure 4: Percentage of population who are overweight or obese, 20-74 years of age, 1988-2004
Consumers seek bread that tastes good and is good for them
Consumers replace white bread with whole grain bread
Figure 5: Household use of types of bread, 2002-06
Figure 6: Response to various bread claims, June 2007
Figure 7: Reasons for eating more whole grain bread than last year, June 2007
Bread makers reformulate breads to meet both health and taste concerns
Natural and organic bread gain popularity
Demographic influences
Households with children influence the market
Figure 8: Incidence of household consumption of bread, by presence of children, 2006
Figure 9: Number of bread loaves used by household in last seven days, by presence of children, 2006
Figure 10: Number of children in households, 2001 and 2006
Growing population diversity positively influences the market
Figure 11: Incidence of household consumption of bread, by race/ethnicity, 2006
Figure 12: Number of bread loaves used by household in last seven days, by race/ethnicity, 2006
Figure 13: Population, by race and Hispanic origin, 2002-12
Bread sales through in-store bakeries experience growth
Figure 14: Sales of ISB bread and bagels/muffins/croissants, 2001-06
MARKET SIZE AND TRENDS
 MARKET SIZE
Figure 15: Total U.S. retail sales of bread, at current and constant prices, 2002-07
Wal-Mart estimate
 MARKET TRENDS
Figure 16: New product releases, 2002-07*
Figure 17: New bread product claims, 2002-07*
MARKET SEGMENTATION
Introduction
Figure 18: FDM* sales of bread, segmented by type, 2005 and 2007
Fresh bread
Figure 19: FDM* sales of fresh bread, at current and constant prices, 2002-07
Fresh rolls/buns/croissants
Figure 20: FDM* sales of fresh rolls/buns/croissants, at current and constant prices, 2002-07
Tortillas/taco shells
Figure 21: FDM* sales of tortillas/taco shells, at current and constant prices, 2002-07
Bagels/English muffins
Figure 22: FDM* sales of bagels/English muffins, at current and constant prices, 2002-07
Refrigerated/frozen bread
Figure 23: FDM* sales of refrigerated/frozen bread, at current and constant prices, 2002-07
SUPPLY STRUCTURE
 A FRAGMENTED MARKET
A mega market without a megabrand
Bread production is a local business
Large bread companies created through consolidation
 THE DSD SYSTEM
 DIFFICULT ENVIRONMENT FOR BREAD PRODUCERS
Excess capacity
Price competition
Increasing cost pressures
 COMPANIES AND BRANDS
Figure 24: Manufacturer sales of bread in the U.S., 2004 and 2006
Fresh bread
Figure 25: Selected brand sales and market share of fresh bread at FDM* in the U.S., 2004 and 2006
Fresh rolls/buns/croissants
Figure 26: Selected brand sales and market share of fresh rolls/buns/croissants at FDM* in the U.S., 2004 and 2006
Tortillas/taco shells
Figure 27: Selected brand sales and market share of tortillas/taco shells at FDM* in the U.S., 2004 and 2006
Refrigerated/frozen bread
Figure 28: Selected brand sales and market share of refrigerated/frozen bread at FDM* in the U.S.,
Bagels/English muffins
Figure 29: Selected brand sales and market share of bagels/English muffins at FDM* in the U.S., 2004 and 2006
ADVERTISING AND PROMOTION
Interstate Brands Corporation
Figure 30: Wonder Whole Grain White—TV ad, 2006
Sara Lee Bakery
Figure 31: Sara Lee range of whole grain white breads—TV ad, 2006
Figure 32: Sara Lee Thick Hearty Sandwich breads—TV ad, 2006
Bimbo Bakeries USA
Mrs Baird’s
Figure 33: Mrs Baird’s bread—TV ad, 2006
RETAIL DISTRIBUTION
Introduction
Main competition is between supermarkets and mass merchandisers
Figure 34: Outlets at which consumers purchase bread, June 2007
Figure 35: U.S. retail sales of bread, by channel, 2005 and 2007
Supermarkets and Wal-Mart offer consumers different selling propositions
Supermarkets
Figure 36: U.S. supermarket sales of bread, at current and constant prices, 2002-07
Mass merchandisers and other
Figure 37: Mass merchandisers sales of bread, at current and constant prices, 2002-07
Figure 38: Wal-Mart store growth, 2001-06
THE CONSUMER: USAGE, FREQUENCY OF USE AND TYPES OF BREAD USED
Summary
Household bread usage by type
Household frequency of using fresh bread
Forms of bread used in households
Choice of retail channels:
Changes in buying behavior
Importance of value proposition, health attributes, and consumer loyalty in purchasing bread
Willingness to try new products
Why consumers are eating more whole grain bread
Household bread use
Figure 39: Use of bread, January-October 2006
Bread use by type
Figure 40: Household use of types of bread, 2002-06
Figure 41: Household use of bread, by type, by age of the head of household, January-October 2006
Figure 42: Household use of bread, by type, by race/ethnicity, January-October 2006
Figure 43: Household use of bread, by type, by presence of children in the household, January-October 2006
Figure 44: Household consumption of bread, by type, by region, January-October 2006
Bread usage analysis by cohorts
Figure 45: Types of bread used, comparison of working class couples and affluent couples,
Figure 46: Types of bread used, comparison of affluent couples with and without kids, January-October 2006
Frequency of use
Figure 47: Number of bread loaves used by household in last seven days, 2002-06
Figure 48: Number of bread loaves used by household in last seven days, by demographic characteristics of household, January-October 2006
Forms of bread used
Figure 49: Forms of bread used by household, 2002-06
Figure 50: Forms of bread used by households, by age, January-October 2006
Figure 51: Forms of bread used by households, by race/ethnicity, January-October 2006
Figure 52: Forms of bread used by households, by presence of children, January-October 2006
Household bread usage by brands
Figure 53: Brands of breads used, by age, January-October 2006
Figure 54: Brands of breads used, by race/ethnicity, January-October 2006
THE CONSUMER: CHOICE OF RETAIL CHANNELS TO PURCHASE BREAD
Where consumers buy bread
Figure 55: Choice of retail channels to purchase bread, by age, June 2007
Figure 56: Choice of retail channels to purchase bread, by household income, June 2007
THE CONSUMER: ATTITUDES AND BEHAVIOR
Changes in buying behavior
Figure 57: Purchase of bread with various health and information claims, by age, June 2007
Importance of value proposition, health attributes, and consumer habit in purchasing bread
Figure 58: Attitude and behavior when purchasing bread, by age, June 2007
Willingness to try new products
Figure 59: Interest in trying bread with various ingredients added, by presence of children in household,
Why consumers are eating more whole grain bread
Figure 60: Reasons for eating more whole grain bread than last year, by age, June 2007
FUTURE AND FORECAST
 FUTURE TRENDS
Significant growth in demand for bread is unlikely
Bread industry is positioned for more profitable operation
Bread marketers are meeting consumer expectations
Bread makers position vis-à-vis retailers is improving
Demographic trends are favorable
Figure 61: Projected population of the United States, by age, 2000-20
 MARKET FORECAST
Bread
Figure 62: Forecast of total U.S. sales of bread, at current and constant prices, 2007-12
Fresh bread
Figure 63: Forecast of U.S. FDM sales of fresh bread, at current and constant prices, 2007-12
Fresh rolls, buns, and croissants
Figure 64: Forecast of U.S. FDM sales of fresh rolls, buns, and croissants, at current and constant prices, 2007-12
Tortillas and taco shells
Figure 65: Forecast of U.S. FDM sales of tortillas and taco shells, at current and constant prices, 2007-12
Bagels and English muffins
Figure 66: Forecast of U.S. FDM sales of bagels and English muffins, at current and constant prices, 2007-12
Other bread
Figure 67: Forecast of U.S. FDM sales of other bread, at current and constant prices, 2007-12
Forecast factors
APPENDIX: TRADE ASSOCIATIONS

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