Pepperidge upbeat on buns, sandwich bread

by Josh Sosland
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CAMDEN, N.J. — Describing fiscal 2014 as “a very strong year” for the fresh bakery business at Pepperidge Farm Inc., Irene Chang Britt, president, said strong demand for buns and sandwich bread have provided significant boosts.

Ms. Britt spoke about the Pepperidge business July 21 as part of a 3½ hour investor day meeting with Wall Street analysts hosted by parent company Campbell Soup Co. While her remarks focused principally on plans to enhance the company’s Goldfish and other products aimed at the snacking segment, Ms. Britt spoke briefly but positively about how the Pepperidge baking business is faring in a tough marketplace. Campbell Soup’s fiscal year ended July 28, a week after the presentation.

“Our fresh bakery business has had a very strong year to date,” she said. “Retail sales are up about 7% versus the previous year to date, and we have gained market share. Despite increased competition in the category, we maintained a steely focus on delivering the fundamentals, outstanding customer service, and great quality product. This ensured we retain space in stores, continued to delight consumers, gained while Hostess Brands were absent from the market and helped build additional distribution in growing channels such as drug.”

Buns and rolls were cited by Ms. Britt as a contributor to the growth.

“Grilling is increasing in popularity across America,” she said. “More than 60% of grill owners say that they grill year round, and the buns and roll segment is currently the fastest-growing segment within the bakery category. We have been able to capitalize on this trend through a program of quality improvements, effective marketing and improved distribution to drive strong double-digit growth of our range.”

Strength in Pepperidge’s “core range of breads” was attributed by Ms. Britt to “the growing popularity of sandwich behavior.”

She said consumption of bread in sandwiches over the past year has grown 4.5%, given new energy by what she described as one of the hottest trends in eating — macro snacking.

“Macro snacking in the United States is a $102 billion market growing at about 3%,” Ms. Britt said. “This is being driven by Americans snacking more frequently across all day parts. These eating occasions are increasingly replacing more traditional mealtimes as people look to mini-meals to keep them going during their hectic days.”

She highlighted data indicating more people are eating snacks or mini-meals than what traditionally are defined as meals during certain day parts. 

“Within these mini-meals, people are seeking a variety of food to address different needs from nutritious foods that will get them going, sustain energy and control hunger to more indulgent treats, and in all cases, people are looking for convenience, flavor and excitement,” Ms. Britt said.

Sandwich bread has been a vehicle for satisfying this demand, she said, adding that successful innovation and marketing are being aggressively pursued at Pepperidge.

“We will work to continue to build the appeal of our premium sandwich bread selection by stepping up consumer investment and in-store activity focused around inspiring sandwich ideas,” Ms. Britt said. “We will also continue to push the boundaries in the premium segment with new artisan breads that are currently in test market in selected Northeast markets.”

A steadier contributor to growth at Pepperidge has been the company’s Swirl bread brand. Recent successes for this line include limited-edition seasonal flavor varieties such as blueberry, strawberry and caramel apple, Ms. Britt said.

She said these introductions helped attract younger families to the brand even as core consumers were retained with permanent varieties such as cinnamon.

“We will continue to leverage our baking and flavor credentials to grow the business building trial and repeat among young families looking for a wholesome start to the day,” Ms. Britt said.
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READER COMMENTS (2)

By Belisario Caicedo 8/12/2014 3:00:10 PM
Excellent article! Glad that Pepperidge Farms will focus on its bread business and its innovation! A long desired process, and with positive expectations. By far the best quality in the bread industry! Cheers...

By Georgette A. Person 8/12/2014 4:55:42 AM
In the article above it was stated that successful innovation and marketing are aggressively being perused. If you would contact me, I believe I have something innovative that may be of interest to you. Thank you.