Change is coming to the bread aisle

by Josh Sosland
Share This:
Search for similar articles by keyword: [Bread]
Dave's Killer Bread - White Bread Done Right
Dave's Killer Bread claims its new white bread has the most whole grains of any organic sliced white bread on the market.

KANSAS CITY — With simpler labels and complicated or at least clever names, change is coming to the bread aisle. In a mature industry in which stability long has been a trademark and growth in recent years has proven elusive, bakers are looking for ways to attract a new generation of sandwich makers.

At the vanguard of this new movement has been a baking company working hard to become part of the industry mainstream — at least as measured by geographic distribution.

Dave’s Killer Bread was introduced 10 years ago by NatureBake, a family-owned baking company with roots back to the 1950s. The organic product’s success prompted the Dahl family to adopt Dave’s Killer Bread as the Milwaukie, Ore.-based company’s name.

In introducing two new varieties in recent weeks, Dave’s has expropriated an innovation term that may be more closely associated with the high-tech industry.

“We’re on a mission to disrupt the bread category with the highest quality, most nutritious and best-tasting products in the marketplace,” said Michelle Hunt, vice-president of marketing at Dave’s Killer Bread. “Consumers want the nutritional value of whole grains, organic alternatives and clean ingredients, and Dave’s Killer Bread delivers boldly on all fronts. We’ve also found they’re looking for not only great nutrition, but great taste, something our loyal BreadHeads can count on us for, knowing we don’t settle until we kill it.”

The company is working toward a goal of gaining national distribution by the end of 2015. As of late 2014, the company was baking 400,000 loaves per week, which it said represented 87% growth from 2012. The bread, which is certified organic and G.M.O. free, carries a suggested retail price of $5.79 per loaf, more than double the average bread price nationally.

Even with that growth, the company was not yet in the tier of the 10-largest U.S. baking companies, accounting for less than a 1% share as measured by unit sales. Still, the approach of Dave’s Killer Bread has gained notice from some of the nation’s largest U.S. baking companies.

Overall fresh bread sales in the year ended Feb. 22 were $8,946,441,216, down 0.87% from a year earlier, as estimated by IRI Infoscan Reviews. The figures include sales at supermarkets, drugstores, mass market retailers, military commissaries and certain club and dollar retail chains. Unit sales of bread were 3,899,685,888, down 0.43%.

Essentially, the entire decrease in bread sales was accounted for by private label. Dollar sales of private label were down 3.89% and unit sales were down 1.92%.

Branded bread sales, as calculated by Milling & Baking News, based on the I.R.I. data, were $6,812,139,008, essentially unchanged from $6,806,841,593 in the year ended Feb. 22, 2014. Unit sales were 2,505,062,400, up 0.4% from 2,495,253,642.

Branded bread accounted for 76% of dollar sales over the past year and 64% of unit sales.

While overall bread sales were fairly flat, wide year-to-year swings were recorded from one brand to the next. Notable was the presence of Wonder Bread on the roster of top brands, at the No. 13 spot. With sales of just over $102 million, I.R.I. estimated the brand’s growth at 335%, from a year in which Wonder was not on store shelves for much of the time.

It was a year ago in February 2014 that Flowers Foods, Inc. first began reporting on results of the return of Wonder, Butternut and Merita to store shelves, during the final quarter of 2013. Flowers said combined company sales of the brands acquired earlier in 2013 from the bankrupt Hostess Brands was $22.8 million during the quarter.

Having broadened distribution, Flowers is selling three varieties of bread under the Wonder brand — white, made with whole wheat and 100% whole wheat. The company also is selling hamburger and hot dog buns under the Wonder brand.

“Currently our distribution network has access to over 80% of the U.S. population and we have substantial opportunity to grow share in our expansion markets,” Allen L Shiver, president and chief executive officer of Flowers, said in a January conference call with investment analysts. “For example, this past summer we expanded into northern Ohio, where the strength of the Wonder brand allowed us to increase sales of Nature’s Own, Cobblestone Bread Co. and Tastykake brands in those markets. Additionally, we have increased distribution on the East and on the West coast, where sales growth we expect in those large markets will be supported by the capacity that we have recently added in those regions.”

The Nature’s Own bread brand, for many years a principal growth driver at Flowers, has experienced challenges over the past year. While bread sales overall at Flowers were up 6% in dollar terms and a whopping 17% in units, Nature’s own sales were down 1.7% and 1.1%, respectively, according to the I.R.I. data.

Flowers, too, has made a move toward millennials with the introduction of Cobblestone Bread Co., a renewal of the company’s 1980s era brand, Cobblestone Mill.

Mr. Shiver said Cobblestone Bread was introduced to meet millennials’ “desire to create restaurant-quality sandwiches at home.”

Within the Cobblestone Bread line are three varieties: Brooklyn Rye, Million Dollar White and Knead for Seed Wheat.

He described Flowers’ as “pleased with the response from retailers and consumers” so far while cautioning, “We are still early in the introduction process.” He said the company is planning the introduction of additional C.B.C. products this year.

The brand’s web site features recipes, a testimonial from chef Nathan Lippy (host of “Grill This”) and streams of social media postings from Twitter and the Cobblestone Facebook page, which is gradually building a following.

Describing consumers as “increasingly more conscious of the foods that they’re eating,” Mr. Shiver said Flowers would invest to ensure Nature’s Own, and all of the company’s brands, remain “relevant with the changing needs of the consumer.”

Social media is also a mainstay of promotion at Dave’s Killer Bread, with a Facebook page boasting 166,000 likes. Daniel P. Letchinger, product manager at Dave’s, said the company is not marketing to any particular demographic group by design.

“It isn’t that we’re employing a specific strategy to appeal to millennials or baby boomers, it’s just who we are,” he said. “Bread is in 97% of households, and the bread category, seemingly forever, has been kind of boring in a way. It’s been a lot of the same. We really see D.K.B. as a brand that’s been disrupting the category by offering something that’s different. It’s not just the product. If you look at our branding, we really stand out on the shelf. Our logo — it’s a mustachioed, muscle-bound guy with a guitar. The name is provocative. We use color equity. The bread category has earth tones. We use bold red, blue and green. We use superlatives — high in fiber, high in protein, high in whole grains, high in omega 3s. We like to consider our products head and shoulder over other breads, but not at the expense of taste.

“We’re not just making bread that’s a carrier for lunch meat or peanut butter and jelly. It’s bread that’s really going to make that sandwich.” 

With the differentiation, Dave’s grew to become the largest baker of organic bread in the United States, Mr. Letchinger said. The company achieved this status with distribution in only 14 states, he said, while competing with national brands. Since then, the company has increased distribution to 41 U.S. states.

In announcing the introduction of its new bread varieties — White Bread Done Right and Sprouted Whole Grains — D.K.B. said it is scaling rapidly to meet demand from consumers across the nation. Kroger retailers in the Midwest and Fairway Market stores in New York City and the tri-state area are the latest additions. The company’s products also may be ordered on its on-line store and via Amazon Fresh.

The addition of white bread to its roster of more than 15 whole grain varieties was a carefully considered one for D.K.B., Mr. Letchinger said.

“We put a lot of thought into this introduction,” he said. “We wanted a white bread that was demonstrably different than others and was a D.K.B. product. We started with a white bread that had whole grains. Most have none. Ours has 10 grams. It has no bleached flour or HFCS.”

In addition to wheat flour, the D.K.B. white bread features flour milled from quinoa, spelt, rye, millet and barley. It contains 120 mg of omega-3 fatty acids per slice.

“Our whole grain breads have fans who are adults, teens and seniors,” he said. “We never had the white bread that a lot of the population eats. But our whole grain breads can be polarizing to some palates. Our new white bread is kind of a gateway bread for us. It’s an opportunity for mothers to purchase the loaf for them, and then the loaf for someone else.”

The other new variety — Sprouted Whole Grains — is made from four organic sprouted grains — wheat, barley, oats and rye. Both of the new varieties have a suggested retail price of $5.79.

This theme of healthfulness carried global echoes in recent remarks by Daniel Servitje, c.e.o. of Grupo Bimbo S.A. de C.V.

“It was an important year for health and wellness initiatives,” he said. “We launched numerous better-for-you and functional products across our 22 markets.”

He described better-for-you as a rapidly growing segment for Bimbo to address.

“Everything from whole grains, natural ingredients and high fiber, to low fat and less sodium and sugar,” he said. “It’s about new formulas, newer ingredients and alternative portion size all leveraging our brand equity. Our portfolio innovations started its transformations in this sense, and we are at an important milestone toward a bright future in this huge market.”

Toward the development and introduction of these products, Mr. Servitje described how Bimbo balances its global capabilities with a “highly localized” aspect to its research and development.

“Technologies, trends, guidelines, our new products benefit from our global scale and cross-market know-how,” he said. “But local flavors and preferences and obviously local marketing and advertising are critical to meeting the unique needs of our customers and consumers in all the markets we operate.”

While I.R.I. has yet to consolidate its vendor listings for Bimbo Bakeries USA into a single company, each of the Bimbo related companies experienced sales declines in the 52 weeks ended Feb. 22 — Earthgrains, down 4.4% in dollar sales; Bimbo, down 0.4%; Arnold, down 6% and Orograin, down 10%.

B.B.U.’s flagship Sara Lee brand recorded a dollar sales gain of 1.2% with unit sales up 4.3%. Its smaller Arnold brand was up 9% in dollar sales. Losing ground were Brownberry, down 10% (dollar); Oroweat, down 4.2%; Mrs Baird’s, down 7%; and Sara Lee Soft and Smooth, down 13%.

Over the course of the last year, Rudi’s Organic Bakery gained new ownership, when the Boulder, Colo.-based company was acquired in May 2014 by The Hain Celestial Group, Inc. Hain estimated Rudi’s annual sales at $60 million per year. Just before the acquisition, Rudi’s announced seven new products, including two gluten-free sandwich bread varieties — double fiber sandwich bread and deli style sandwich bread. The new varieties extended a gluten-free lineup that already included original, multigrain and cinnamon raisin.

The heightened importance the gluten-free line may be playing at Rudi’s was suggested in brief comments about Rudi’s offered by Irwin Simon, chairman and c.e.o. of Hain, in a recent presentation.

“We’ve spent some time getting the bakery up to speed,” Mr. Simon said at the 2015 annual conference of the Consumer Analyst Group of New York. The presentation was delivered in March at the Boca Raton Resort and Club in Boca Raton, Fla.

“We’ve put capital in the bakery,” he said. “The opportunity for frozen gluten-free, for fresh gluten-free products around the U.S., not only at retail but also food service, is tremendous, along with organic breads. Not just gluten-free products but organic products, too.”

Comment on this Article
We welcome your thoughtful comments. Please comply with our Community rules.

 

 


The views expressed in the comments section of Baking Business News do not reflect those of Baking Business News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.