First some statistics: Per capita consumption of wheat flour (excluding durum wheat flour used in pasta production) is down almost 10% since 1997, writes Rabobank senior analyst Nick Fereday in his new report: ‘Breaking Bread: Cooking Up Success in US Bakery'.
“Since 2000, the US population has grown by 12%, but flour consumption has only risen by 3%... Since the start of the century, average retail volume of baked goods as a whole has fallen 1.3% per annum and almost 2% per annum for retail bread sales.”
In dollar terms, retail sales of baked goods rose by 2% per annum over the same period, but only because prices have risen, he said.
There are lots of factors explaining the decline, from carb avoidance to changing lifestyles (Millennials are as likely to grab a Greek yogurt for breakfast instead of toast, or choose a salad at lunch instead of a sandwich; while bread also plays less of a role as an accompaniment in many ethnic cuisines).
But this doesn’t mean the sector is doomed, he said, citing four key areas of opportunity for the sector:
INDUSTRIAL ARTISANAL: In the past three years, sales of unpackaged and artisanal bread and cakes/pastries have grown twice as fast as their packaged counterparts, noted Fereday. Meanwhile, growth in demand for artisanal-style unpackaged baked goods from Starbucks and Panera has “counter-intuitively increased demand for their large-scale commercial production - hence the rise of ‘industrial artisanal production”, he added.
And this requires a more responsive supply chain capable of supplying instore bakeries with more uncooked dough or par-baked products, he said.
ANCIENT GRAINS: While the gluten-free trend “may be approaching its sell-by-date”, it has “opened consumers’ eyes to a world of alternate grains and pulses”, said Fereday, who urged bakers to “embrace a broader portfolio of flours beyond wheat”, from amaranth to buckwheat, chia, quinoa, sorghum, millet, flax, rye spelt and teff.
WRAPS & FLATBREADS: Indian flatbreads and Mexican tortilla wraps meet consumer demand for greater convenience, portability and ethnic foods.
NON-GMO: Consumer demand for non-GMO products could give the wheat-based bakery industry a boost, said Fereday.
Ardent Mills: Sales growth in the in-store bakery breads is well out-pacing the fresh bread aisle
David Sheluga, director of consumer insights at flour milling giant Ardent Mills, told FoodNavigator-USA that more retailers are grasping the in-store bakery opportunity: “In one Midwestern grocery chain, we've observed them actually replacing an entire shelf of packaged sliced breads with their own, in-store bakery breads.”
But innovative packaged bread makers are also growing, he said. “Just last week, Dave's Killer Breads announced plans to go national, bringing high end, premium ingredient breads to broader areas of the country."
As for ancient grains, he said: "Bread makers will continue to embrace ancient grains given they are gluten-free, non-GMO, high in protein and nutrients. Grain-based products have been slow to incorporate added-protein. But I believe we will see more use of non-GMO, plant based proteins added to wheat-based breads in the future."
On wraps & flatbreads, the ongoing “shift to a multi-cultural population suggests that traditional sliced bread sandwiches will trend down, and flatbread sandwiches will trend up”, he predicted. Meanwhile, more restaurants are offering wrap sandwiches and ethnic flatbreads, which are “quickly becoming the sandwich of choice for younger consumers”, he added.
The wheat-flour-bread industries have got to get the word out that wheat is not genetically modified
But what about the non-GMO factor?
"The wheat-flour-bread industries have got to get the word out that wheat is not genetically modified, and nor are the ancient grains” said Sheluga.
“While some critics may say it is disingenuous to state that wheat is non-GMO, when in fact all wheat is non-GMO, we believe that we have to tell that story. There has been a rise in the misperception that wheat is genetically-modified in recent years, and we have to correct that misperception."