Josh Sosland
The recent release of Corporate Profiles from Sosland Publishing Company offers an important annual opportunity for a high-level insights into the health of the baking business measured against other sectors of the packaged foods industry. The special edition offers a look at several food processing industry sectors together with profiles of companies in the midst of growth or change.

Dollar sales of bread were flat in the year ended July 7, according to data from Information Resources, Inc., a Chicago-based market research firm. Sales edged up a modest four-tenths of a per cent the previous year. While no one in grain-based foods will be satisfied unless product sales are growing at a pace in line with or faster than population growth, measuring retail sales trends against those of other leading categories is critical for executives seeking a more comprehensive picture of the industry’s health.

When measured against overall supermarket sales, flat bread sales may be viewed as less disappointing. Overall supermarket sales across all departments totaled $836 billion in the year ended July 1, versus $835 billion the year before, according to Nielsen Answers. A sustained lack of growth has been even more apparent in unit sales. Aggregate unit sales of all tracked products have been within a tight range between 253 billion and 255 billion each of the past five years (unit sales of bread during this period have been eroding from one year to the next), according to Nielsen.

Among 37 food and beverage categories tracked by I.R.I., bread’s performance over the past year fell at about the middle of the pack. A number of grain-based categories, mostly indulgent, did better than bread, including bakery snacks, pies and cakes, pastry and donuts, snack bars and granola bars, cookies and salty snacks. Measured against other staples, bread looks more impressive. Sales of luncheon meats fell 3.22 per cent; ready-to-eat and hot cereal, down 2.2 per cent; yogurt, down 2; salad dressings, down 1.8; milk, down 1.7; pasta, down 1.6 per cent; and soup, down 0.6. Tortillas were an exception, up 2.8 per cent.

While the fastest growing category over the past year was refrigerated tea/coffee, up 11.3 per cent, snack categories vied with beverages for the top growth positions, including ready-to-eat popcorn, up 11.3 per cent; dried meat snacks, up 7.4 per cent; and salty snacks, up 2.9.

Nicely simplifying the position of commercial bakery within the supermarket overall was Todd R. Hale, a former Nielsen executive and currently principal, Todd Hale, L.L.C. Mr. Hale tapped Nielsen data looking at how each supermarket department has been growing over the last several years and assigned index numbers to each, with 100 representing overall store growth. The commercial bakery, at 114, was 14 per cent greater than would be expected, measured by sales gained between 2013 and 2017. The 114 index number for the commercial bakery segment compares with 90 for grocery, the catchall category encompassing most of the center of the store.

“It’s a challenge for bakery,” Mr. Hale said. “The growth in the perimeter of the store, demand for fresh — gotta have it now in terms of meals and snacks — is a major factor. Prepared meals and snacks are in greater demand than ever before. See-through packaging gives the impression that it is fresher, whether or not that is the case. It isn’t necessarily better for you, but it is convenient and tastes good.”

It is no surprise bakers have responded to these trends by making a play toward the faster growing perimeter, particularly near the deli section. While certain companies have enjoyed considerable success in these efforts, others, including some ranking bakers, have found the perimeter a tough nut to crack.

In an environment in which snacks, indulgent products and beverages seem to have a near monopoly on growth, realistic expectations are a must. Still, finding ways to take advantage of how bread is a great complement to certain faster growing categories remains an avenue that beckons with considerable promise.