Report: Manufacturers Must Innovate to Keep Bread Relevant

<p>Retail sales of packaged breads totaled $13 billion in 2012, but challenges do persist for this mature food market segment.</p>

ROCKVILLE, Md.Packaged bread endures as a staple of the American dietnotwithstanding the culinary conflagrations of low-carb and gluten-free, virtually all U.S. consumers eat some form of bread, and the market enjoys a high household penetration. According to Packaged Breads: U.S. Market Trends, a new report by market research publisher Packaged Facts, retail sales of packaged breads totaled $13 billion in 2012, but challenges do persist for this mature food market segment.

Consumers are eating bread less frequently, and they are consuming it in less quantity. Health and diet concerns, changing eating patterns and ethnic influences on food are making standard breads less important to consumers. Packaged Facts forecasts that retail dollar sales of the packaged breads market will essentially be flat, growing marginally between 2014 and 2017. Manufacturers must innovate to keep bread relevant in American diets as consumption of packaged breads, particularly sliced bread, declines, according to Packaged Facts research director David Sprinkle. 

It would be foolhardy to throw in the towel on what has long been known as the staff of life, particularly in this sandwich-loving nation," Sprinkle said.

Product trends in packaged breads generally revolve around two themes: health and nutrition, and taste and experience. The themes often overlap as many new products deliver different tastes and experiences that are also healthier and more nutritious.

U.S. consumers remain attentive to health and wellness across virtually all product categories, and bread manufacturers have responded for years with products that are more nutritious. Breads are being fortified with healthier and trendier ingredients that deliver benefits many consumers have to come expect, and help differentiate one brand from another. Products have been formulated to reduce sodium, sugar and fat, to be free of high fructose corn syrup and trans fats, and to be more natural, organic, fresh, and even gluten-free.

Whole wheat now outsells white bread at retail stores, factoring out foodservices hamburger buns and pizza crusts. And whole grain products are filling shelves, thanks in large part to the fast-growing older population that has helped propel the trend toward healthier breads and higher fiber. Because more than half of Americans say they are watching their diets, and a large percentage look for more fiber in what they eat, healthier breads will help drive sales in the years to come.

Consumers arent just looking for healthier products, but also for breads and rolls that offer different experiences in terms of taste, texture and food adventure. They seek more variety beyond white and whole wheat, and multi-grain and seeded breads provide such experiences for many, along with international options. Hispanic and Mediterranean influences are key drivers of sales for tortillas and flatbreads. Artisanal manufacturers are introducing new flavor combinations, using ingredients like olive oil, garlic and jalapeno flavors in breads and rolls.

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