The past year could hardly be characterized as uneventful for the bread market. Reacting to record high baking ingredient prices and stunning market volatility, baking companies strove mightily to keep bread prices in line with costs. Later in the year, the industry encountered a very different environment with ingredient costs retreating (though remaining far above historical averages) but the economy turning sour.

Looking back, a number of clear trends emerged in the macro bread market. Unit prices moved higher an average of 10% in the year ended Dec. 28, 2008, based on data from Information Resources, Inc. with private label up 13% and branded bread up 6% to 13%. Additionally, unit sales in outlets measured by I.R.I. declined for almost every company, while dollar sales were sharply higher.

Against this backdrop of turmoil, new product innovation in 2008 probably was the lightest in several years. In contrast to the veritable wave of products unveiled during the middle of the present decade, largely around a renaissance in whole grains, several major companies had no major new product introductions in traditional or premium bread categories last year. Many factors could account for this lull, and the reasons appear to vary from one company to the next. Still, a theme that carried from one company to the next was uncertainty over exactly what might resonate best with consumers. While consumers remain intensely interested in health and wellness, bakers appear to be moving forward gingerly, carefully assessing how to parlay that interest into successful new products with signature ingredients beyond whole grains.

Meanwhile, several baking companies remained confident in additional opportunities to build and mine consumer interest in whole grains.

"Whole grain is here to stay while we’re continuing to look for the next functional health benefit we can provide consumers," said Tim Zimmer, vice-president of marketing, Sara Lee Fresh Bakery, Downers Grove, Ill. "We continue to research. We won’t chase fads."

Also moving carefully in the health and wellness arena is Flowers Foods, Inc., Thomasville, Ga.

"You have to be careful you don’t turn bread into a medicine bottle," said Janice Anderson, vice-president of marketing. "Consumers can push back if it’s overdone. We’ve completed a research study to determine what consumers want in their bread, and while I’m not prepared to discuss the results, I can say we have solid data on what consumers want today."

Ms. Anderson said consumers are more actively pursuing healthful products, in contrast to a more passive, approach in the past.

Another company early in its work on taking health and wellness in baking beyond whole grains is Roman Meal Co., Tacoma, Wash. Gary Jensen, Roman Meal president, said the company is narrowing its development ideas to appeal to its principal demographic target.

"We’re working on as a concept the notion of what we call ‘grains-plus,’" Mr. Jensen said. "For instance, whole grains while also bringing in vitamin D and calcium. Bundling nutrients that way could be of interest to consumers, especially our target — the health conscious female who is 50 plus."

At Sara Lee, the lull in new product introductions by no means implies that the company is standing still or has even paused in its efforts to build the bread business through innovation, Mr. Zimmer said. Following a rush of new products in recent years, many of which have achieved great success, the company is looking differently at what it means to innovate in a way to help the company and the entire baking industry.

"We have the right products," Mr. Zimmer said. "Our opportunity was to make it easier for consumers to shop in the store and connect with our brands. We are working to build awareness and trial. We’re still a new brand (in fresh bread). And we are working to make it easier for consumers to understand the nutrition of bread."

First among these efforts is an initiative to reorient the bread aisle first previewed in December by Sara Lee Fresh chief executive officer James Nolan (see story in Milling & Baking News of Dec. 16, Page 17). While Mr. Nolan discussed how the industry should think about working together with retailers to encourage stocking bread on shelves by day-part category to make shopping easier for consumers, Mr. Zimmer focused on starting immediately with the Sara Lee varieties. The company has taken steps to make it easier to distinguish between the various Sara Lee varieties offered.

"We spent two years studying packaging in this section of the store to figure out how we can make it easier for shoppers to find our products," Mr. Zimmer said. "I think when you look at this section of the store, the number of brands on the shelf, the amount of duplication, its challenging for shoppers to find the products. They’ve been buying products they buy habitually. We want them to find variety and make it easier."

In particular, the company has "cleaned up graphics" to make it easier for consumers to find the bread they want.

"The whole package has been redesigned," Mr. Zimmer said of its Sara Lee line. "It isn’t just the gusset, which is extremely important. The point is to be sure consumers understand the distinction between products and identify the ones that fit their needs.

"With the graphics cleaned up, there is real separation between brands and sub-brands. It is easy now to

distinguish between Soft & Smooth and Classic. It is easy to see the benefits of the products."

Because of the limited amount of space on the gusset to communicate such benefits, Sara Lee queried consumers about which benefits are most important to see, Mr. Zimmer said. For instance, the Soft & Smooth line highlights the whole grain, calcium and vitamin D content. Also on packages is a Nutrition Spotlight graphic that highlights key nutritional benefits.

"The point is to have easy-to-read, call-out graphics with key nutritional information," Mr. Zimmer said. The objective is to help consumers better understand the overall health benefits of bread, keying in on nutrients of particular concern. For mothers, those concerns tend to be calcium, total fat, sodium and sugar."

To help consumers better connect with the Sara Lee brand, the company has launched what Mr. Zimmer described as "ground breaking programs and promotions." Most notable was the company’s High School Musical 3 promotion.

"We have the DVD hitting stores now," he said. "This piece of innovation relates to how we are connecting with the consumer in the store and out. It has people thinking differently about this category. I think it puts our products into a different mindset. It takes it from just thinking of it as bread to something more involving. With High School Musical, we connected with consumers in lots of different ways."

For example, Sara Lee conducted a public relations campaign in which school students were able to send in videos that encourage their peers to eat whole grain bread. Corbin Blue, a star of the movie, visited and served lunch at the school of the student with the winning submission.

"This kind of program is different than product innovation," Mr. Zimmer said. "We are looking for ways to innovate the category and change how people think about bread every day."

In selecting a promotion such as High School Musical, Mr. Zimmer said it is crucial to be sure the match is one in which the target audience will be reached so that the partnership is "leveraged to a maximum." Additionally, a multi-dimensional approach to marketing should be employed, ranging from Internet, public relations, packaging and television.

Mr. Zimmer declined to disclose how much the High School Musical promotion cost Sara Lee other than to say, "It is a significant spend."

The attention devoted in 2008 at the company to the Sara Lee brand was "a lot," Mr. Zimmer acknowledged, commensurate with its young age and need of nurturing as well as its promise. Other brands were not completely neglected, though, he added.

"We think EarthGrains is a wonderful brand," he said. "We launched a double fiber variety in 2008 and expanded distribution in November. It is available in two varieties: 100% multi-grain and 100% whole wheat. Some consumers with digestive health issues wanted those flavors with double the fiber."

More generally, Mr. Zimmer said EarthGrains consumers are a different target and lifestyle than its other lines, attracted to a 100% natural line of bread products.

Nature’s Own drives Flowers growth

While Flowers Foods is focused on looking for the "next best thing" in bread, the company continues to receive positive feedback from Nature’s Own, a time-proven brand.

"Nature’s Own breakfast bread has been our hero for this year," Ms. Anderson said. "We introduced it in April 2008."

Ms. Anderson noted that the Nature’s Own brand had focused on soft varieties of bread and buns and specialty products. The latest move is a natural extension, she said.

"If you think about where Flowers is with Nature’s Own, we serve the market with soft variety bread, better-for-you white bread, sandwich buns and premium specialty breads, but we had a void in the breakfast category," Ms. Anderson said. "We thought it was a great place for Nature’s Own to extend and cover all eating occasions for the day."

Anchoring the entire breakfast line is a flavor that has helped propel Nature’s Own for years — honey wheat, Ms. Anderson said.

"Our honey wheat flavor has been a winner since the late 1970s," Ms. Anderson said. "We extended it into buns and into our light and premium specialty loaves. Wherever we’ve taken honey wheat, it has done well for us. Now it has been extended into our English muffin and bagel lines."

In moving into the breakfast bread category, Ms. Anderson said the company was mindful that "Nature’s Own" stands for "healthy choices and outstanding quality."

"We couldn’t put the Nature’s Own brand on just anything," she said. "All products in our new breakfast line are excellent sources of vitamins A, D, E and calcium. Some are good sources of whole grain, which is somewhat unique across the breakfast category."

If breakfast is a niche category in the bread universe, Flowers stayed with that theme with another introduction in 2008 — ciabatta sandwich rolls introduced under the Cobblestone Mill brand.

"This product reflects a trend we’ve observed in the food service category," Ms. Anderson said. "It is difficult to walk into many quick-service restaurants and not see a ciabatta roll sandwich on the menu. We thought this bread would be a natural for Cobblestone Mill, our premium line."

As part of introducing the roll, Flowers had simple sandwich recipes developed that are posted on the brand’s web site. Based on "nice kudos" registered by Flowers’ consumer relations staff, the product has been well received.

"They’ve said ‘thanks’ and ‘please don’t let that product go away,’" Ms. Anderson said. "Consumers are turning to brown bags and more at-home eating. Our ciabatta rolls give them the opportunity to have an away-from-home eating experience at home."

Texturally, ciabatta is a distinctive product in the bread and rolls category.

"We’ve got the process down," Ms. Anderson said. "I can’t speak for manufacturing, but baking a ciabatta roll is different than baking our usual type of roll and we had to overcome some challenges. I think we have an excellent product."

The market for whole grains bread and the focus on health and wellness continues to grow, though "perhaps at a slightly slower pace than a couple years ago," Ms. Anderson said.

Nature’s Own has been Flowers’ principal vehicle for this market since its introduction in the late 1970s and has done well, she said. Some Nature’s Own products have in excess of 20 grams of whole grains per slice, and many have additional call-out benefits, such as more fiber, sugar-free, omega-3 fatty acids, and added calcium and vitamins.

In 2006, Flowers took Nature’s Own into the premium specialty category with a line of all natural, whole grain bread.

"The premium specialty category already existed, and when you move into a category with well-established brands, you have to work hard to build awareness for your brand in that category to generate sales, and loyalty," Ms. Anderson said. "We supported Nature’s Own specialty premium with a television spot, and sales continue to build gradually."

Broader approach at Roman Meal

Building around its whole grains heritage, Roman Meal has continued to broaden its approach in line with evolving trends. For example, Roman Whole Grain, introduced in 2007, was rolled out in additional markets in 2008. With a taste modeled on the original Roman Meal bread, Roman Whole Grain offers even higher whole grain content with 50% to 90% of daily whole grain recommendations per two-slice serving.

Mr. Jensen of Roman Meal said the product has continued to enjoy "good success in many markets."

In 2008, Roman Meal moved into a very different space in the whole grains spectrum introducing a made with whole grains white bread, principally in California.

"It’s a departure from the brown bread of Roman Meal," Mr. Jensen said. "It is certainly in tune with other offerings in the marketplace."

Other new product introductions from Roman Meal in 2008 include a Golden Flax and Honey variety with whole grains, omega 3 fatty acids and fiber. The company also is offering a double fiber bread with bran from wheat, oats, corn and rice.

"We’re becoming more interested in grains like rice, and we’re taking a hard look at barley too because of the nutritional properties of that grain," Mr. Jensen said.

On a sweeter note, Roman Meal has introduced a Muesli loaf, a blend of whole grains, fruit and honey.

Stretching even further beyond its traditional footprint, Roman Meal has added to its non-bread product line of snack bars and hot cereals with a co-branded, refrigerated biscuit dough. The product has been introduced by Sara Lee, the nation’s leading private label refrigerated dough company, made with whole grains from Roman Meal. It will be offered at The Kroger Co. stores.

"We’re very excited to be partnering with a great company like Kroger and a great baker like Sara Lee," Mr. Jensen said. "There is a lot going on. We have big ambitions in terms of whole grains not only in the bread category but several aisles of the supermarket."

What’s next for I.B.C.?

Among the more intriguing questions going into 2009 is the degree to which Interstate Brands Corp., Kansas City, newly emergent from bankruptcy, will make its presence felt in the marketplace.

The company wasted no time with regard to new product introductions. Only days after coming out of bankruptcy, the company unveiled its first new line of bread products to be introduced in several years. Nature’s Pride bread is being billed by I.B.C. as the "first 100% natural brand of bread available across the country." The bread contains no artificial flavors or colors, no high-fructose corn syrup, no trans fats and no artificial preservatives. And while widely available, the bread is not available in the Pacific Northwest, southern California and Texas — markets where I.B.C. does not have bread bakeries.  

"The popularity of natural food products continues to increase as more and more consumers look for wholesome and healthy foods that they can feel good about feeding their families," said Stan Osman, vice-president of marketing for I.B.C. "Nature’s Pride promises to deliver what these consumers want — a 100% natural brand of healthy, great tasting breads. Consumers can be sure that if the label says Nature’s Pride it must be 100% natural."

The Nature’s Pride bread is available in Premium Hearty Bread and Traditional Soft Bread and will sell for between $2.99 and $4.29.

The Premium Hearty Bread is packaged in 24-oz loaves in eight varieties: 100% Whole Wheat, 12-Grain, Healthy Multi-Grain, Country White, Double Fiber, Stone Ground Whole Wheat with Honey, Country Potato and Butter Milk.

The Traditional Soft Bread is packaged in 20-oz loaves in the two varieties: 100% Whole Wheat and Honey Wheat.

I.B.C. said it will support the new product launch with a national advertising campaign that touts the brand’s promise of "Nothing less than 100%."

The new I.B.C. product launch is not without controversy.

Last July, Flowers Bakeries sued I.B.C. in connection with the Nature’s Pride launch for alleged "trademark infringement, unfair competition, trademark dilution and injury to business reputation and deceptive trade practices."

Flowers Foods has offered bread and other baked foods under the Nature’s Own trademark since 1976. Flowers alleged that I.B.C.’s intended use of the Nature’s Pride and Nature’s Choice names "is likely to cause confusion and to deceive consumers and the public."

A spokesperson at Flowers declined to comment on the I.B.C. introduction other than to say that litigation is ongoing.

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