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The Bakery Market: A closer look at the key trends in the Bakery category

12th October 2016

Matthew Verity Business Unit Director – Kantar Worldpanel [email protected]

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The largest shopper panel in Great Britain

Geographically and demographically representative of the

population of GB

30,000 Households in GB

KANTAR WORLDPANEL SERVICE AND METHODOLOGY

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Take home

purchases scanned

by Palm Pilot and

Clicker technology

Data retrieved

automatically and

processed on a 4

weekly cycle

Panellists send us

their receipts

which are matched

to their purchases

Clients receive

databases, reports

presentations

and insights

KANTAR WORLDPANEL SERVICE AND METHODOLOGY

The largest shopper panel in Great Britain

Geographically and demographically representative of the

population of GB

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1 Bakery in Context: Key Trends in Grocery

2 Understanding the Performance of Bakery

3 Where next for the Bakery Category

AGENDA

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DEFLATION HAS SLOWED BUT REMAINS NOW AT -1.1%

-4%

-2%

0%

2%

4%

6%

8%

10%

J M S J A A D M J N F J O J M A D A J N M J O F M S J A A D M J N M J O J M S

Grocery inflation Grocery growth

2006 2005 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: Kantar Worldpanel – RT43 (Grocery) 12 we 11 Sep 2016

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A RETURN TO CHEAPER PRODUCTS AND VOLUME GROWTH

-5

-4

-3

-2

-1

0

1

2

3

4

5

J S N D F A M J S N J M M J A O D F A M J S N J M A J A O D F M M J S N J M A J A O D F A M J S N J F A J A

Volume HH Store Choice Promotion Choice Product Choice

2008 2009 2010 2011 2012 2013 2014 2015 2016


Co

ntr

ibu

tio

n to

Va

lue

Ch

an

ge

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SOME STAPLE MARKETS GOING UP IN PRICE

1.90%

1.80%

1.60%

1.50%

1.20%

0.90%

0.80%

0.70%

0.70%

Wet/Smoked Fish

Skincare

Frozen Potato Products

P/P Fresh Meat+Veg+Pastry

Fresh Lamb

Total Milk

Fruit

Chilled Desserts

Chilled Ready Meals


LFL inflation

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YET VEGETABLES, BUTTER, PORK & POULTRY STILL DECLINE

-6.50%

-5.70%

-5.00%

-4.90%

-4.30%

-4.30%

-4.10%

-3.80%

-3.10%

-3.10%

Machine Wash Products

Fresh Bacon Rashers

Savoury Snacks

Fresh Poultry

Fresh Pork

Fresh Sausages

Butter

Eggs

Yoghurt

Vegetable


LFL inflation

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FREQUENCY

BASKET SIZE

REPERTOIRE

MISSION

SLOW

CHANGE

256 2011

259 2015

9.9 2011

9.9 2015

60.6% 2011

62.4% 2015

5.1 2011

5.1 2015

(Annual FMCG)

(Annual FMCG)

(12 we Till Roll Grocers)

(Annual % Spend from Top Up Trips)

SOME CHANGE IN SHOPPING HABITS BUT SLOW CHANGE

Source: Kantar Worldpanel – Till Roll & RST (Grocery)

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% spend on deal

PROPORTION OF SALES ON DEAL NOW SHIFTING DOWNWARDS

0

5

10

15

20

25

30

35

40

45

38.5

2016

39.4

2015

39.6

2014

38.7

2013

39.8

2012

38.3

2011

37.3

2010

33.2

2009

30.9

2008

30.2

2007

30.1

2006

On promotion


RT43. 2016 08. 2006-2008 numbers

realigned consistent with improved post 2009 promotional read.

* year to August 2016, unlike other calendar years

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3.8% September 2006

10.7% August 2016

10.8% September 2016

ALDI & LIDL MARKET SHARE

Source: Kantar Worldpanel – Till Roll 52 we 11 Sep 2016

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0

5

10

15

20

25

N D J F M M A M J J A S O N D J J F M A M J J A

Supermarket

High street

Convenience

Discounter

Internet

% spend growth

2015 2016

ONLINE GROWS STRONGLY BUT HAS SLOWED

Source: Kantar Worldpanel – RT43 (Grocery) 52 we 14 Aug 2016

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0

10

20

30

40

50

60

Retired Empty Nesters Older

Dependents

Family 10+

Years

Middle Family

5-9 Years

Young Family

0-4 Years

Pre-Family Total

Sep 16

Sep 15

% penetration

POTENTIAL QUESTION OF SATURATION FOR YOUNG FAMILIES?


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AGENDA

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5.6% of Total

Grocery

£5.9bn 52 we 11 Sep 2016

10.7% August 2016

-0.8% 52 we 11 Sep 2016

TOTAL BAKERY IS WORTH ALMOST £6BN BUT DECLINES

Appears in 40%

of Baskets Purchased 107

times per year

Source: Kantar Worldpanel – Total Bakery – 52 we 11 Sep 2016

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Source: Index Mundi - Wheat Monthly Price - US Dollars per Metric Ton

THE AVERAGE PRICE OF WHEAT HAS CONTINUED TO FALL

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-250,000

-200,000

-150,000

-100,000

-50,000

0

50,000

100,000

150,000

200,000

250,000

300,000

Contr

ibution

Frequency Trip Packs Price per Pack Penetration (%) Total Contribution (£000s)

LOWER AVERAGE PRICES PAID THWART MARKET GROWTH


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-120,000 -100,000 -80,000 -60,000 -40,000 -20,000 0 20,000 40,000 60,000

Wrapped Bread

Rolls

Speciality Bread

Morning & Bakery Snacks

Chilled & Frozen Breads

Bread ISB

Cake BI

Cake ISB

Chilled Cakes

Penetration % Purchase Frequency Trip Packs Price per Pack

-6.6%

-2.6%

+3.3%

+5.8%

+5.5%

+3.9%

-0.2%

+1.2%

+6.6%

WRAPPED BREAD CONTINUES TO SEE SIGNIFICANT DECLINE


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2012 2013 2014 2015 2016

Value £000s Volume (Packs 000s)


WITH VOLUME SALES DOWN OVER THE PAST FIVE YEARS

£1.63bn

£1.38bn

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Morning & Bakery Snacks

Chilled Cakes

Speciality Bread

Chilled & Frozen

Breads

ISB Cake

Wrapped Bread

ISB Bread

Rolls

BI Cake

INCREASINGLY SHOPPERS MOVE TO MORNING & SPECIALITY


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Total Breakfast (IH+CO)

In Home Lunch

Evening Meal

(IH+CO)

Carried Out Lunch

Total Snacks

(IH+CO) Teatime

(IH+CO)

Decline more than

-3%

Decline between -3

and 0%

Growth between 0

and 2%

Growth between 2

and 5%

Growth more than

5%

BREAKFAST AND LUNCH KEY TO BAKERY AND INDEED BREAD

Source: Kantar Worldpanel Usage

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YET BREAKFAST IS CHANGING WITH HEALTH TREND EVIDENT

+13% +18%

+47%

+13% +17%

+10% +65%

+6%

+39%

+14%

+36%


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TRADITIONAL ITEMS STILL THE BIGGEST BUT SUFFERING

-10% -3%

-2%

-4%

-1% -3% -2%

=%


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4000

4500

5000

5500

6000

6500

D J F M M A M J J A S O N D J F M M A M J J A S O N D J J F M A M J J A

Sandwich

Occasions

Occa

sio

ns (

m)

2016 2015 2014

WHILST THE DECLINE OF IN HOME LUNCH HITS SANDWICHES


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AGENDA

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-5

0

5

10

15

20

25

52w/e15

Sep13

52w/e10

Nov13

52w/e05Jan14

52w/e02

Mar14

52w/e27Apr14

52w/e22Jun14

52w/e17

Aug14

52w/e12Oct14

52w/e07

Dec14

52w/e01

Feb15

52w/e29

Mar15

52w/e24

May15

52w/e19Jul15

52w/e13

Sep15

52w/e08

Nov15

52w/e03Jan16

52w/e28

Feb16

52w/e24Apr16

52w/e19Jun16

52w/e14

Aug16

Total Bakery Free From Bakery


FREE FROM REMAINS A BIG GROWTH AREA – POSITIVE HEALTH

2.4m

+15.4%

£2.26

(£0.82)

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FOCUS ON ONE PERSON OCCASIONS – BIGGEST OPPORTUNITY

65% of UK

Households now

contain 1 or 2

people compared

with 35% that are

3 or more people


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5.7 5.3

4.6 4.9

5.4

6.3

7.6

0

1

2

3

4

5

6

7

8

Weekly frequency

Total Bakery

Maturists

(65+)

Baby Boomers

(55-64)

Gen X

(35-54)

Gen Y

(25-34)

Gen Z

(16-24)

Children Average

Consumer

An accelerating

growth in the

importance of the

over 55 age group

One in 6 people in

the UK are over 65

A 26 fold increase in

the past century.

Most population growth

will come from the over

65’s – 3,000,000 more in

the next decade

REMEMBER THE OVER 55’s – KEY BAKERY CONSUMERS


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OUT OF HOME AND ‘ON THE GO’ BOOMING

£45bn +4.5%

22

8

7

5 3

Meals Snack Foods

Hot Beverages Sandwiches

Soft Drinks

OOH Value £bn Source: Kantar Worldpanel Out of Home

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32.3

0

5

10

15

20

25

30

35

40

2010 2012 2013 2014 2015 2016

Sandwich Thins

KEEP THE NPD PIPELINE FOCUSED ON CONSUMER NEEDS


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Thank you…

Matthew Verity Business Unit Director – Kantar Worldpanel [email protected]

the bakery market - british society of baking › wp-content › uploads › 2016 › 0… · the...

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