By Andy Janes
By Andy Janes
A case study on malted wheat flakes in the U.K. bread market – and what a similar market (the Canadian one) can learn from the experience.
It was the ancient Egyptians who first cultivated cereal production along the fertile banks of the river Nile as long ago as 5000 BC. Grain became a staple food and spread throughout the Balkans, mainland Europe and eventually became cultivated in Britain. By the year 3000 BC, following the development of tougher wheat varieties, the baking of bread became a skill in Egypt along with the brewing of beer.
By 1050 BC, the South of England became a centre of agriculture with barley and oats growing freely and by 500 BC, wheat had become important in England. In 55 BC, the Romans invaded England and introduced their sophisticated milling techniques – including the watermill.
It is believed that the first malt was probably made by accident, with stored barley seeds sprouting after becoming moist. There has been much debate over whether the malt was first used in bread or in beer brewing, but either way there is a long history of the use of malt in baking.
Bread-making in the U.K. probably dates back as far as 40 BC, when the Roman authorities decreed that bread should be distributed free to all adult males.
The growth in towns and cities throughout the Middle Ages saw a steady increase in trade and bakers began to set up businesses. By Tudor times bread had become a real status symbol, with the nobility eating fine white loaves, the merchants and tradesmen eating wheaten cobs and the poor just satisfying themselves with bran loaves. By 1307 white bread bakers and brown bread bakers had formed separate guilds and it was not until 1569 that they were united by Queen Elizabeth I to form the “Worshipful Company of Bakers.”
It was the Benedictine monks of Burton Abbey in the mid 1700s who are rumoured to have first introduced malted wheat flakes into bread. There is also the suggestion that this malted bread formed the basis of the very first ploughman’s lunch and was the bread taken by farmers into the field along with their cheese and ale.
Bread made with malted wheat flakes was popularised throughout the U.K. in the first half of the 20th century with the launch of the “Hovis” Granary loaf. The rich, tasty flavour of the Granary loaf and the development of the Hovis Granary brand combined to bring this style of bread to the attention of the consumer at large. Clones of this bread style soon appeared, offering the consumer a wider choice and enhancing the shelf space devoted to this healthy alternative to the traditional white and brown loaf.
In spite of the introduction by Hovis of their malted wheat flake-based Granary loaf, consumers still preferred to stick to their old habit of buying their daily bread – which was mainly white. But progress continued and sales of malted breads continued to grow year after year. Consumer focus on nutrition, digestion, allergies, obesity and many other health-related topics have raised issues over the health status of bread. In general though, bakeries have still maintained a healthy halo and consumers have tended to switch to healthier variants such as malted breads rather than switching out of the bread category completely.
Changes in lifestyle and eating habits made convenience a key driver in the buying decision. Consumers were seeking snacking-on-the-go solutions, meal replacements and easy preparation meals. Toasting became the number one snack preparation method and sandwiches dominated lunchboxes. This made bakeries well positioned to take advantage of these trends and stimulated product innovation as well as the marketing and development of healthy and convenient options such as malted breads. Indulgence and pleasure are still key drivers in spite of the move toward healthier eating and this has led to a growth of continental and ethnic products and a desire for more premium, higher quality, tastier products.
There are now more that 200 varieties of bread available to U.K. consumers and there is a growing trend toward non-white breads as consumers increasingly buy into healthier and premium alternatives (wholemeal, malted and seeded). Bread with bits (malted and seeded) is up GBP31.8 million (USD 52 million) – that’s 34 per cent on last year – and is the biggest source of yearly growth. This growth trend is completely the opposite of the overall bread demand curve, where during the period between the 1950s and the 1980s bread volume was consistently in decline.
The period following the 1980s saw some stabilization of demand and in the 1990s, sales started to increase due to increased consumer awareness of the health benefits of bread and the increased variety of bread on offer. Demand from the mid 1990s into the early 2000s saw another downward trend driven by low carbohydrate and faddy diets. However, more recently there has been a revival, as consumers have become aware that these faddy diets are not good for their health.
The U.K. retail bread market is regarded as one of the biggest “grocery” markets and is currently estimated to be worth GBP 1.6 billion (note, a U.K. billion is 1,000 million) (USD 2.6 billion). It is growing at 2.7 per cent in retail value, driven by bread made and marketed by the huge plant bakeries but in unit terms the market is in decline, down 2.4 per cent. This serves to emphasize the growing trend toward premium, interesting breads. The in-store bakery market sector is in decline, largely due to retailer trading patterns, down 1 per cent in retail value, 9.5 per cent in unit terms.
Despite being a mature market, the value of the bread market is expected to grow steadily over the next few years, driven by macro trends of health, convenience and the trend toward premium products. It is “bread with bits,” such as bread with malted wheat flakes, that is driving the overall market growth.
The majority of bread sold in the U.K. is produced here, mainly due to short shelf life. The three main manufacturers (Allied Bakeries, British Bakeries and Warburtons) account for nearly 75 per cent of the plant bread market by value. Plant bread itself accounts for 84 per cent of the total bread market by value.
In addition to the bread market, the rolls and baps (similar to a hamburger bun) and breads of the world sectors are worth collectively another GBP 800 million (USD 1,300 million), with rolls and baps accounting for 62 per cent of this value. As with the bread market, it is sales of premium branded rolls, specialty and luxury rolls, which are triggering sales growth.
Ethnic breads such as naan, pita and ciabatta are also seeing growth, attracting new product development opportunities such as convenience wraps designed to appeal to the younger consumer. Traditional bakery snacks such as teacakes, muffins, currant buns and hot cross buns are in general decline, mainly due to the aging consumer profile for these products, yet this sector is still worth an estimated GBP 526 million of the U.K. bakery market.
To summarize, the U.K. bakery market is evolving toward premium, healthier products, all of which can benefit from ingredients such as malted wheat flakes, which will assist in satisfying recognized consumer demand for health, convenience, indulgence and pleasure.
Andy Janes works for Muntons, a large malting company in the U.K.