Ten years ago, a few wholesale bakers decided to take a new look at whole grains, introducing a range of products they hoped would resonate with consumers in a way the category had not in the past.
Because previous attempts to push whole wheat bread into the mainstream had foundered, the move 10 years ago was anything but a guaranteed success. Indeed, this annual Bread Product Perspective’s 2001 headline ended with a question mark underscoring the uncertainty: Whole grains — The dawning of a new era?
For bakers of bread and rolls, the results are in and the move toward whole wheat has been an unquestioned success. Whole grains may account even today for a small percentage of overall U.S. flour use at about 5%, but bakers of bread and rolls have achieved numbers far higher than the modest niche this figure would suggest.
“In 2001, we generated 2% of our business from whole grains,” said J. (Bohn) Popp, vice-president of marketing at Aunt Millie’s Bakeries, Fort Wayne, Ind. “Today, 38% of the bread and rolls we sell contain at least some whole grain flour.”
Even with 10 years of dramatic share growth, Mr. Popp said increasing whole grain intake remains a major priority for consumers.
“Whole grain and fiber are probably the two most important health attributes you get from baked foods,” he said. “It fits the category. If you have a whole grain, you have fiber.”
Flowers Foods, Inc., Thomasville, Ga., also has experienced dramatic growth in demand for whole grain products. Over the past five years, sales have climbed 75%, the company said, noting that 100% whole wheat Nature’s Own variety bread has been a top seller for decades.
At Sara Lee Fresh Bakery, Downers Grove, Ill., the share of products with whole grain nearly doubled to 45% in 2010 from 24% in 2005, the company said. Sara Lee estimated overall share growth for the category at 27% in 2010 from 15% in 2005.
Fueling the growth in whole grains has been a complex mix of developments, many of which were unknown 10 years ago. For instance, while the Dietary Guidelines for Americans have promoted whole grains by tightening the vise on what it calls refined grains, the guidelines were not the principal inspiration for the push in 2001.
Instead, credit may go to a move by a company better known in grain-based categories outside of bread. Responding to a petition by General Mills, Inc., the Food and Drug Administration in July 1999 approved a health claim for products containing at least 51% whole grain ingredients:
“Diets rich in whole grain foods and other plant foods and low in total fat, saturated fat and cholesterol may reduce the risk of heart disease and certain cancers.”
While the health claim may have been beneficial to the industry over the past years, many of the whole grain containing products have not qualified to use the claim. Indeed, a whole category of “made with whole grains” products introduced in the middle of the decade has helped fuel the sector as part of a range of baked foods from milled wheat products aimed at offering whole grain flour with taste and texture that consumers associate with white flour. Other disparate factors contributing to strength in whole grains have been the creation of supportive groups such as the Whole Grains Council and the introduction of the Whole Grain stamp, the rise and fall of low-carb dieting, which ultimately cast a positive light on whole grains and fiber and even glycemic index dieting. While the glycemic index for whole wheat and white bread are nearly identical, many consumers may believe otherwise.
Still sees chance to build awareness
In agreement with Mr. Popp’s assessment that considerable growth opportunity remains for whole grains ahead was an executive with the company perhaps most closely associated with the revival of the category — Sara Lee Fresh Bakery, currently a division of Sara Lee Corp.
Jeff Dryfhout, director, Sara Lee North American Fresh Bakery, said consumer awareness of whole grains has increased tremendously over the past decade, but considerable further opportunity remains, especially in the white bread category.
“Ten years seems like a lot of time, but it isn’t so much time,” he said. “There is still a disparity in the knowledge of whole grain. Whole grain accounts for about 9% of the white bread market, which is a $1.5 billion to $1.6 billion market.”
Mr. Dryfhout said with the first highly successful wave of whole grains marketing completed, bakers must segment the marketplace to identify consumer groups representing the ripest opportunities. Beyond what he called “hard core” whole grain buyers, Mr. Dryfhout identified other segments with dramatically different views of whole grains.
“There are consumers who see whole grains as ‘nice to have,’ and consumers who perhaps will buy it when it is on sale and others who don’t know much about whole grains at all,” he said. “We have quantitative and qualitative data. There isn’t one blanket statement you can make about what it is consumers want when it comes to whole grains.”
After a decade of intensive new product introduction, Mr. Dryfhout said the company’s efforts in 2010 were focused principally on building awareness. The company’s data indicated Sara Lee’s bread stood out positively for its nutrition credentials, Mr. Dryfhout said.
He explained, “But we want to bring out the other benefits as well, which is at the heart of our recent ad campaign, ‘You know what they like.’”
When it comes to nutrition, whole grains increasingly have become the starting point for what many consumers require, Mr. Dryfhout said. He described this statement as fundamentally different than the situation in 2001.
“Whole grains are becoming the ante in new products,” he said. “It was a new thing. Now it is the must have. Not having it becomes problematic.”
Sara Lee addresses the variety of consumer interests with a range of products that could be characterized as “whole grains plus.” The addition of extra fiber, calcium or the exclusion of high-fructose corn syrup are different ways Sara Lee has tried to reach a wider range of consumers, he said.
New products, per se, have not been the chosen approach, he added.
He explained, “From a new products standpoint, we are stepping back and saying, ‘Does the market need another new product?’ We are focusing
a lot on what we see on shelf. Our portfolio spans the breadth of whole grains on one side, as well as classic white and classic 100% whole wheat.”
Mr. Dryfhout challenged the idea that removing high-fructose corn syrup does not reflect genuine consumer trends. The Corn Refiners Association has publicized data showing converting from sugar to HFCS is expensive, is not what consumers want and does not result in sales gains.
“We want to be insight led,” he said. “As we hear consumers tell what they want or don’t want in their breads, one of the things we hear is HFCS. You have a varying degree of knowledge among consumers about what it does in their bread. There is debate on both sides. We know that if we pull HFCS out, consumers prefer it. We wouldn’t put anything on the package that we aren’t hearing from the consumers they want. We do deep research. Making formulation changes is not easy. When you give consumers a choice between HFCS or no HFCS, they have a preference.”
Looking at the bread market overall, Mr. Dryfhout characterized it as “dynamic,” benefiting from increasing consumer awareness of the benefits of bread in the diet.
“Even the white bread category has been evolving from the negative stigma to one with positive nutritional elements,” he said. “We see consumers getting more into the wheat market because of the nutritional benefits.”
Perhaps one of the more promising emerging trends relates to how children have responded to innovation in the bread market.
“Kids are open to more types of bread than in the past,” he said. “It is one of our largest findings. I started on the lunch meat side. So now I’ve seen the whole sandwich. Looking at the wheat category, 10 years ago it wasn’t nearly the size of white. Today it is neck and neck. The key has been the emergence of varieties that are more family appealing. Historically a lot of the wheat items had a significantly different texture than white. It was a turnoff for kids. Toppings were a turn off. Mom wouldn’t buy it. Wheat products have softer textures. Smoother textures.”
Ten years ago, the Earth Grains brand was the vehicle for Sara Lee’s predecessor, the Earthgrains Co., to explore the possibilities for whole grains. Mr. Dryfhout said more recently the brand has enjoyed success with thin buns. The company also has focused on touting the brands sustainability credentials and core ingredients. He added, though, that the company still thinks considerable potential exists to take Earth Grains in new directions.
“Earth Grains is a name that evokes with consumers certain things,” he said. “We continue to leverage equity with consumers and push it even further. We will put more effort behind this brand.”
Whole grains factor in thins/rounds
While whole grains have and continue to be a driver of change in the bread aisle of supermarkets, other innovations have emerged as well. Indeed, over the past two years, portion control products such as thinner sandwich bread or bagels have become a true sensation. Still, even in this segment, whole grains played an important role, according to Flowers Foods.
“By far, our biggest success story this past year has been our line of Nature’s Own Sandwich Rounds,” the company said. “This line made its debut in early 2010 with 100% Whole Wheat and Health Multi Grain varieties, which quickly became consumer favorites. In July 2010, we added 100% Whole Grain to the lineup and will be introducing Nature’s Own Whitewheat Sandwich Rounds in February 2011.
“This thinner take on a traditional bun has impacted the bakery category more than any other new product we can recall in recent memory. They are a lower-calorie replacement for sandwich breads and buns and consumers who are health-conscious or watching their weight understood the concept very quickly.”
Similar interest has been demonstrated in thinner bagels, Flowers said. The company introduced
Nature’s Own White and 100% Whole Wheat Thin Bagels also in early 2010, and Flowers said the products are “contributing nicely” to breakfast category sales.
More recently, the products have been reintroduced with new formulations and an 8-count, resealable package.
“Consumer response to the zippered, resealable package we use for our sandwich rounds has been very positive,” Flowers said. “It made sense to move our thin bagels to the same packaging style.
“While white bread is still the largest segment in the South market, which is our core market, sales are declining as consumers switch to wheat bread or sandwich rounds.”
A disappointment for Flowers last year was a gluten-free product the company tested.
“The recipe we developed got rave reviews from people on gluten-free diets, but we could not make the economics work,” Flowers said.
While consumers may be switching to Flowers’ sandwich rounds and other thins as a substitute for sandwich bread or buns, the company said the net effect on the bread category has been positive.
”We’ve found that consumers are using thin bagels and sandwich rounds for breakfast, lunch, dinner, and snacks — and many households are purchasing both items,” the company said. “Because of their popularity, we expect to see some growth in the flatbread category since it presents yet another way to make a ‘thin sandwich.’”
Flowers said it expects further growth in the tortilla category as well, in part because of the qualities they share with thins — particularly versatility and convenience.
Segments showing strong unit growth in addition to sandwich rounds/thins are soft variety bread, and dinner and breakfast items, such as bagels and English muffins, Flowers said.
While the Whitewheat brand for several years was the vehicle Flowers used for products targeting consumers who want the taste of white bread and the nutrition of whole wheat, the company has entered the made with whole grain category as well, through its Nature’s Own brand.
Recently, the company introduced Cobblestone Mill 100% Whole Wheat bread in a smaller package.
“In response to consumer demand for more whole grain bread options, Cobblestone Mill is now offering a 100% whole wheat loaf packed with 16 grams of whole grain in a smaller, 16-oz size,” Flowers said. “With less slices per loaf, this bread is also perfect for consumers in smaller households who want to enjoy restaurant-quality premium breads.”
Widening range of health concerns
Expanding on the current atmosphere for whole grains, Mr. Popp of Aunt Millie’s said the company conducts health surveys annually, probing consumer interest in categories such as gluten free (growing but small) and low carbohydrate (shrinking but still not gone).
“We keep adding more categories to ask about,” he said. “Certainly interest in reduced calorie intake has grown. There is residual low carbohydrate interest. Young families are looking for ways to get more whole grains for their children. It will continue to be strong.”
Mr. Popp said varieties of made with whole grain white bread have done well as have whole wheat bread made available to consumers dependent on the WIC (Women, Infants and Children program administered by the U.S. Department of Agriculture).
That whole grains have grown dramatically over the past decade hardly means the market for white bread is disappearing, Mr. Popp of Aunt Millie’s said.
“We do well with white bread,” he said. “Consumers say they are consuming less white bread, but our numbers don’t necessarily show that. They are flat. We are getting growth from variety.”
Mr. Popp’s view of the bread market may be colored by the regional markets served by Aunt Millie’s, some of the toughest hit by the economic slowdown. In particular, he said Michigan has been very difficult.
“I just did population analysis of the primary states we serve,” Mr. Popp said. “Over the past decade, the population of Indiana was up 6%, Ohio was up 2% and Illinois was up 4%. All the states were beneath the U.S. average of 10%, but Michigan actually was up just 0.3%. Michigan just isn’t growing. It’s No. 1 in the country in unemployment. The economy is driving just about everything.”
Among the effects of the weak economy on Aunt Millie’s has been a shift in the company’s customer base, Mr. Popp said.
“Dollar stores, all of them, are just doing so well,” he said. “With the economy, value in the Midwest is just very critical. We address it by attacking it the way any customer would. It has increased importance and I think it is here to stay. Dollar stores have risen to a level of importance comparable with some of our larger customers.”
Beyond whole grains, Mr. Popp said new products that have done well for Aunt Millie’s include a line of natural bread varieties and a swirl bread. The company has had success with a line of Hawaiian roll and bun introductions, allowing the company to leverage its direct-store delivery capabilities in a way national competitors are unable, Mr. Popp said.
Mr. Popp said Aunt Millie’s is working on ways to reduce sodium content further in bread, recognizing that the problem is one with no instant fix.
“If you eat as much bread as recommended, sodium can be an issue, which is why we are working on it,” he said. “With sodium, you have to go on and off the gas very gently. If you cut it all at once, it won’t taste good. If you cut it gradually, palates can adjust. We have reduced sodium in certain products. We’re using sea salt in one product.”
Focus on fermented dough products
Even at companies where other new product initiatives may be a higher priority, whole grains still is not being neglected. For instance, Harvest Time Bread Co., which recently announced plans to expand its Mount Airy, N.C., baking plant, has focused over the past year or so on a broad platform of specially fermented dough-type products, offered to customers, mostly in-store bakers, in a wide variety of formats.
Still, Connie Holston, vice-president of sales for Harvest Time, said whole grains are being addressed by the company in a variety of ways.
“We have added several items with additional whole grains and flax,” she said. “We’ve also had some items with fruit and nuts. On the whole grains, we are trying to meet some of the guidelines for healthier options. Whole grains seem to be one of the buzz words as a better, healthier option. We’re looking to find a way to grow in the institutional markets of schools, health care and military. They each tend to lean more toward whole grains.”
Originally based in Woodbridge, N.J., Harvest Time will close its Woodbridge baking plant when the North Carolina project has been completed. The company, which was established in the 1980s, owns a sister business in the New Jersey area called Portuguese Baking Co. The entire business is owned by a Boston-based private equity group.
The company offers customers a wide range of products, including artisan and European specialty bread to sturdy ryes, soft rolls, gourmet buns and dinner rolls.
Discussing the specially fermented dough products, Ms. Holston said the line is meant to help differentiate Harvest Time in the market place.
“We want to bring to market products that are unique from other bakeries,” she said. “It has been very successful. We make bread dough, sandwich rolls, different shapes, sizes and flavors as needed. The products are sold in in-store bakeries and on bread shelves.
“The process of fermenting the dough and being able to work with it at different production stages sets us apart from our competitors. It is a different process and style of dough. It takes longer. There are a few more steps we are able to do because of our size and capabilities.”
Several of the bakers interviewed offered observations about difficult conditions at present in the bread market, referring both to consumer demand and ingredient market developments.
“The market is very mature in the bread industry,” said Ms. Holston of Harvest Time Bread Co. “Right now what we are seeing is stable and very small growth. We’d like to see greater growth. The category itself will be interesting in the coming year. Commodity markets are rising and are projected to continue rising through the summer months. It will be interesting to see how much of that can be passed on to the consumers. Many of us will be cautiously making changes where needed to remain competitive and continue to grow.”
Marrying whole grains, specialty bread
Finding ways to bridge traditional specialty baked foods with current health and wellness issues also has been a focal point for Turano Baking Co., Berwyn, Ill.
Giancarlo Turano II, national sales manager at Turano, said the company is introducing a rustic baguette made from a blend of enriched and whole wheat flour.
“The product requires a lot of fermentation but still has a very crispy crust,” he said. “With quite a bit of development time, we found the right mix of whole wheat and white flour that would still give us the cell structure that makes a baguette special. We were able to incorporate a substantial amount of white whole grain flour into the product. It’s amazing. It still has a very crispy crust.”
Three months since its introduction, Mr. Turano said the product is meeting or exceeding expectations. The product has a one-day shelf life typical of baguettes and is packaged in paper bags.
Ken Cotuno, vice-president of sales and marketing, said the baguette is part of a larger area of emphasis at Turano.
“As a trend, we are working on a range of products that work and eat like white bread but contain whole grains,” he said.
Other new products at Turano include focaccia flats offered in herb, tomato and olive oil varieties, which represents Turano’s answer to the growing popularity of thinner bread options. The products are sold as thin, 4½-inch rounds. The Turano
executives described the products as targeting a premium market in contrast to the sandwich thins/rounds offered by other companies.
Turano has benefited from the gradual expansion in demand for artisan products, interest that continues apace, Mr. Cotuno said.
“We are not seeing any abatement of the artisan trend,” he said. “We see quick-service restaurants taking a hard look. A bun is a bun doesn’t cut it any more, and many customers and restaurant chains are demanding a bolder profile. The Food Network has been a factor in this, really changing the marketplace.”
Mario Turano, operation manager at Turano, added, “Ciabatta has become its own category. It lends itself well to food service and has grown rapidly there.”
While maintaining a low profile on its work in this area, Turano is mindful of increasing concerns about sodium content in bread, Giancarolo Turano II said.
“With all our new products, we were trying to develop them with less sodium, more fermentation and ingredients with more flavor,” he said. “For example, we are using starters to build new flavor. Traditionally, bakers have added flavor with salt. We’re trying to be cognizant, but the real change will come when our customers begin demanding lower sodium. We’re not touting it because customers aren’t asking for lower sodium.”