Much to consider in A.B.A. analysis of demand trends

by Josh Sosland
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The question of why demand for bread and rolls has been under steady pressure in recent years has been as consistently troubling during this period as a simple answer has been elusive. Bakers have pursued a clearer understanding of this weakness both to be able to devise strategies to counter the downtrend and to gain a clearer view of what the future holds.

During the annual meeting of the American Bakers Association last week in Florida, the question of exactly what is happening with regard to demand hovered over most of the presentations during the general sessions. The somewhat frustrating conclusion from the talks is that, indeed, no single explanation exists for the weakness. One speaker characterized the current environment as “death by 1,000 cuts,” citing 17 different plausible contributors to the soft demand trends, ranging from aging population, delayed family starts and smaller households to gas prices, a poor job market and the increased popularity of prepared foods.

Perhaps the most surprising explanation for the weakness was offered by Todd Hale, a senior vice-president at Nielsen. He shared Nielsen data tracking bread and baked foods demand by household income showing that middle income households indexed significantly higher (119-123) as bread buyers than high-income (116) or low-income households (as low as 101). The figures suggest that for baking, the much discussed shrinkage of the middle class in the United States may be “the most unkindest cut of all.”

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