Corporate Profiles - 2023 - 10

GRAIN-BASED FOODS
Grain-based foods
Consumers put the brakes on 'buying up' in bread
F
or many years, " trading up " appeared to be an unstoppable
trend in the market for sliced packaged bread. Energized by the
growing popularity of artisan bread together with the blockbuster
successes enjoyed by brands such as Dave's Killer Bread and Sara
Lee Artesano, consumers increasingly were drawn to pricier loaves
while popular brands faded and demand for private label fell, rapidly
at times.
While the trend may still be in place over the long run, it has become
clear over the past year that the term " unstoppable " is no longer appropriate
for the premiumization of the bread category. Surging prices have
halted growth for many leading bread brands.
In the initial months after inflation reared its head in 2021, baking
executives (and other consumer packaged foods executives) said signs
were scant consumers were resisting higher prices. The upbeat attitude
dimmed in 2022 and largely had evaporated in 2023. More and more
consumers have been seeking value over the past year when shopping
for food and other products.
Overall sales of bread and rolls in the 52 weeks ended July 16 totaled
$18.31 billion, according to data from Circana, up 11% from a year
earlier. Unit sales were 11.85 billion, down 2.1% from the year before.
Channels covered by the data include grocery, drug, mass market, military
and select club and dollar retailers.
Boosted by higher prices, most bread baking companies in the United
States enjoyed strong gains in dollar sales over the past year, including
Grupo Bimbo SAB de CV, up 10%; Flowers Foods, Inc., up 7%; and
Campbell Soup Co., up 8%. Unit volume, though, was down - 5.3%
for Bimbo, 4.5% for Flowers and 4.5% for Campbell Soup.
On a dollar basis, private label bread sales were up 24%, and unit
volume was up 4.9%. With the increase, private label's unit volume
share rose to 26.1%, up 70 basis points from 25.4% the year before.
On a dollar share basis, private label rose 151 basis points to 24%.
On the question of whether the trend toward premiumization was still
in place longer term, A. Ryals McMullian, chairman and chief executive
officer of Flowers Foods, Inc., identified some hopeful signs during the
middle part of 2023.
" We found that sales metrics for Dave's Killer Bread among middleand
lower-income consumers improved compared to the prior year, with
increases in unit sales per buyer, product trips and repeat rates, " he said
in comments in August after Flowers issued its second-quarter financial
results. " Furthermore, DKB grew overall units by 7% in tracked channels,
which we believe is a decent barometer for consumer health given
the brand's premium positioning. "
He cautioned more time would need to pass before definitively " concluding
that consumer health is on a sustainable upward trajectory. "
10 \ October 2023
LEADING FRESH CENTER STORE SANDWICH
bread vendors
% change
from
Dollar sales
1 Grupo Bimbo SAB de CV
2 Flowers Foods Bakeries LLC
3 Campbell Soup Co.
4 Lewis Bakeries, Inc.
5 Aunt Millie's Bakeries, Inc.
6 United States Bakery
7 Martin's Famous Pastry Shoppe, Inc.
8 H&S Bakery
9 Pan-O-Gold Baking Co.
Private label
Total
LEADING
grain-based foods categories % change
from
Dollar sales
Cookies
Cold cereal
Fresh sandwich bread
Snack bars/granola bars/clusters
Crackers
Hamburger and hot dog buns
Pasta
Donuts (full-size)
Bar/finger snack cakes
$11,137,119,704
$9,862,526,813
$9,586,629,314
$6,872,409,830
$8,915,451,4229
$3,092,441,361
$3,014,889,002
$1,256,491,845
$943,374,140
year ago
13.7%
11.4%
10.6%
8.3%
13.0%
13.8%
15.0%
10.9%
16.7%
Data for 52 weeks ended July 16, 2023
Total US - Multi-outlet with C-Store (Supermarkets, Drugstores and Mass Market Retailers,
Gas/C-Stores, Military Commissaries and Select Club & Dollar Retail Chains)
Source: Circana OmniMarket Integrated Fresh
$2,919,949,898
$2,591,497,994
$729,663,857
$344,676,930
$211,706,476
$201,909,979
$144,101,166
$142,466,159
$106,936,695
$1,451,200,905
$9,586,629,314
year ago
9.7%
6.6%
7.5%
17.4%
5.9%
8.1%
8.6%
15.0%
7.7%
24.1%
10.6%
He also noted strength in private label was not an " across the board "
development across all channels.
" This private label phenomenon is playing out more in mass than
it is in grocery, and actually it lost share in grocery, " he said. " It
continues to gain in mass. We've talked about there's been a little
bit of channel shift as consumers seek bargains in mass, club, dollar,
that sort of thing. I do think also that it's important to note that the
private label share gains are generally confined to that loaf category,
the traditional products. In other words, those with the least differentiation.
Private label lost share in virtually every other category
where you tend to see more differentiation, so especially breakfast
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Corporate Profiles
INDUSTRY REVIEW: grain-based foods
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Corporate Profiles - 2023

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