New Market Trends in the European Bakery Sector - IAOM MEA · New Market Trends in the European Bakery Sector ... (2015) Bakery in Russia (2014) ... IAOM MEA, 3-6 December 2014

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New Market Trendsin the European Bakery Sector

Bakery market drivers and brakes through 2018

25th Annual IAOM Mideast and Africa District ConferenceCape Town, South Africa, 5 December 2014

by Anne Fremaux

� Consulting

� Individual market research

� Strategic multiclient research

� Market due diligence

What GIRA does

All along the food & drink and distribution chain- throughout the world

Expertise in Bakery: products/countries/circuits

� Update of Bake-off Survey+ (2015)

� Bakery in Russia (2014)

� Bakery Ingredients France (2014)

� Bakery Panorama EU-27 & Turkey(2012, 2007)

� Savoury Pastry Snacks EU-16 (2011)

� Bake-off Bakery Markets EU-16(2010, 2006, 2002)

� Fresh Bakery Strategies in Modern Retail France (2007)

� Use of Fats in the Bakery Industry France (2006)

+open for Founder Client subscription

2© Gira 2014IAOM MEA, 3-6 December 2014

Menu

3© Gira 2014

� An overview of the European bakery marketsNeed to adapt to new consumer trends

� Future challenges in bakery products distributionWho will lead the growth?

� The new shape of the industryNow and in the future

� To sum upSome major trends

IAOM MEA, 3-6 December 2014

An overview of the European bakery markets Need to adapt to new consumer trends


Industrial

Fresh Bake-off

BreadBread

Consumer products

Industrial prepacked breadFresh bread

Bakery products and production methodsThe same definitions used in all countries

"Artisanal "

Made from scratch on the premises

Production methods

© Gira 2014IAOM MEA, 3-6 December 2014 5

6

The European bakery market in 2013:Over 40 million tons and EUR 130 billion

© Gira 2014

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Tur

key

Ger

man

y

Fra

nce

U. K

ingd

om Italy

Pol

and

Spa

in

Rom

ania

Gre

ece

Net

herla

nds

Bel

gium

Cze

ch R

ep.

Bul

garia

Hun

gary

Por

tuga

l

Aus

tria

Sw

eden

Irel

and

Slo

vaki

a

Den

mar

k

Fin

land

Lith

uani

a

Cyp

rus

Latv

ia

Slo

veni

a

Est

onia

BreadViennoiseriePatisserieSavoury pastry

Source: Gira compilation

Bak

eryc

onsu

mpt

ion

('000

t)

� Overall bakery consumption has decreased by -0.2% in the past 10 years

� Consumption should remain steady in the near future.


Bread & fresh products dominateBut suffer from increasing competition

7© Gira 2014

Bakery products consumption volumes by products, 2013 Europe

Bakery products consumption volumes by technology, 2013 Europe


Viennoiserie & Patisserie

Bread

-2,0%

-1,0%

0,0%

1,0%

2,0%

0 2 500 5 000 7 500 10 000 12 500 15 000 17 500 20 000 22 500 25 000 27 500 30 000

(Size of bubble denotes value in EUR mio)

% v

olum

e gr

owth

pa

Source: Gira (Size of bubble denotes value in EUR mio)Source: Gira Market volume ('000t)

2001/2006

2001/2006

2006/20122012/2018

8

Long-term trends have stopped or slowed down: bread has benefited from the crisis…

Growth in products - 2001/2006, 2006/2012 and 2012/2 018

2006/20122012/2018

Savoury P.

© Gira 2014IAOM MEA, 3-6 December 2014

9

Bakery consumption will show contrasted future growth towards 2018

© Gira 2014

DE FR

UK

IT ES

NL EL

BEPT AT

SEIE

DK FI

PL

RO

CZ BG HU SKLT LV CY SI EE

39,900

39,950

40,000

40,050

40,100

40,150

40,200

40,250

40,300

40,350

40,400

40,450

40,500

2013 DE FR UK IT ES NL EL BE PT AT SE IE DK FI PL RO CZ BG HU SK LT LV CY S I EE 2018f

('000

tons

Bak

ery)

Source: Gira

DE FR

UK

IT ES

NL EL

BEPT AT

SEIE

DK FI

PL

RO

CZ BG HU SKLT LV CY SI EE

39,900

39,950

40,000

40,050

40,100

40,150

40,200

40,250

40,300

40,350

40,400

40,450

40,500

2013 DE FR UK IT ES NL EL BE PT AT SE IE DK FI PL RO CZ BG HU SK LT LV CY S I EE 2018f

('000

tons

Bak

ery)

Source: Gira

TK


� Trading down for basic products:• Success of low-price standard daily bread

• Success of hard-discount stores

Trends in bakery products consumption:polarization of the bakery market

10© Gira 2014

� Trading up :• High quality and more expensive bread

specialities

• Success of artisan breads ("Pain de Tradition Française")

• Hamburger frees o.s. from fast-food

Retailers and manufacturers need to fill the gaps!


� Main consumption drivers:• Bread: natural and cheap

• New tastes and new shapes

• Search for snack and food-on-the-go

• Looking for meal solutions

11

Bakery products consumption drivers and brakes

© Gira 2014

� Brakes on consumption growth:• Effect of the economic downturn on indulgence

and added value products

• Sweet products: a treat and not a need− Health concern− Competition from alternative savoury snacks

• Return to home-baking

Trade down

New tastes

Meal solutionsSnacking

On-the-go Mini-bites

Savoury

Convenience


� Free-from…• Gluten• Wheat• Allergens• Sat fats• Palm oil

� Clean-label formulations

� "Better-for-you" bakery:• Salt intake reduction• Fat alternatives• High-fibre, high protein options• Functional and fortified foods

The major health challenges in bakeryWithout affecting products' quality

12© Gira 2014

BUT the consumer still want a wide variety of tasty bakery goods!

Bakery and ingredients producers need to adapt!• New ingredients formulations: enzyme-based, technological, flavour…• Special requirements also imposed on technology: specific production lines, even

custom-built machines


� Avoiding food waste:• 25% of bread products in high-income countries are wasted• At retail & consumer level, during storage & processing

� Buying local to support local economy:• Manufacturers buying local flour• Consumer buying in local stores or directly to producers

� Carbon footprint:• Bakery products contain a wide spectrum of ingredients from

different origins• New processes which make smarter use of natural resources

� Sustainability is omnipresent…

Global "green" trends also apply to bakery products

13© Gira 2014

The annual volume of water used for wasted food would fill lake

Geneva three times…


Future challenges in bakery products distributionWho will lead the growth?


Bakery products distribution channels, Europe, 2001 /2017 trends (by volume)

15

Modern retailers now hold 45% of distribution… expected to increase further…


Bakery products distribution channels, Europe, 2001 /2017 trends (by volume)

16

Modern retailers now hold 45% of distribution… expected to increase further…

© Gira 2014

� Artisan bakers => Services & foodservice

� Modern retailers => "Freshly baked": key in driving footfall and more frequent visits

� Bakery chains => A mixed positioning between a traditional bakery & a fast-food outlet

� Foodservice sector => Expansion of coffee shops and cafes/bars


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2001 2006 2013 2017

('000

t)

Source: Compilation Gira

Artisan bakers

Modern retailers

Bakery chains

Foodservice

Fresh bread price positioning by retail sector - 201 2

Index 100 = average country

price

17

Artisan bakers generally have the highest price positioning

50

75

100

125

150

CH BE FR IT ES NL DE PL HU UK

Source: Gira

Artisan bakers Hard-discountModern retailers


"Yesterday's Bread" in France

18

New types of bakery stores: threats or opportunities?

Discount bakery stores in the UK

© Gira 2014

"Click & collect" bakery

Bread vending machine in Belgium

Single product bakery


The new shape of the industryNow and in the future


European bakery products production: artisanal vers us industrial, 2013

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Industrial bakers supply 67% of bakeryWith main opportunities for bake-off

Artisanal supply:33%

67%Industrial supply:


(Consumption figures)

Artisan

In-store scratch

Fresh

Bake-off

Prepacked long-life

Home-baking

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

0

% v

olum

e gr

owth

pa20

13/2

018

Market volume ('000t)Source: Gira

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Craft bakers still represent huge volumes……But almost no potential

Growth % in total bakery production methods – Europe , 2013/2018


Growth prospects in bakery products production – 201 3/2018

Biggest growth is foreseen for bake-off, everywhere!


To sum upSome major trends


The main trends -And their likely effect on Industrials & Millers'

activities


Drivers Brakes

� Bread: staple & healthy

� Snacking, on-the-go, savoury

� Expansion of modern retail

� Industrial production

� Bread & fresh products: mature markets� Trading down� Increasing health concern� Declining artisans & in-store scratch baking

Opportunities Threats

� Target both ends markets• Answer to the still big standard markets• Add value to bakery products and flours

� Branding• Opportunities for differentiation

� New ingredient formulations� ISB in hard-discount

• Opportunities for bake-off volumes

� Rising cost and raw material prices• Volatility

� Pressure on selling prices / on quality� ISB in hard-discount

• Threat for bake-off margins

Is bake-off now at a turning point?

25© Gira 2014

Bake-off at production level: sustainability will b e the key

� Trends are moving towards clean-label products

� New formulation and new ingredients

� Carbon footprint: bake-off is energy intensive

� Upgrade bakery processes

Bake-off at consumer level: "Defrost" labelling reg ulation?

� Positive impact of "freshly baked" or "baked in-store"

� Emphasizing scratch baking whenever possible

� "Freshly baked" a misleading label?� UK, Slovakia, Czech Republic, Greece� Aldi (DE) and Coles (AU) taken to court� It is a still ongoing legal battle…


Thank you for your [email protected]

© Gira 2014IAOM MEA, 3-6 December 2014 26

Documents

New Market Trends in the European Bakery Sector - IAOM MEA · New Market Trends in the European Bakery Sector ... (2015) Bakery in Russia (2014) ... IAOM MEA, 3-6 December 2014