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By Diane Toops, News & Trends Editor | 08/26/2008
Campbell’s Pepperidge Farm outpaces the competition
Campbell’s Soup Co. (www.campbellsoup.com), Camden, N.J., maker of Pepperidge Farm breads, outpaced all of the other major bread suppliers from 2005-07, achieving sales growth of over 16 percent in FDMx. Notably, the brand’s volume sales increased strongly as well; Campbell’s fresh bread volume sales climbed over 8 percent from 2005-07, significantly higher than the other leading suppliers. Similar to Nature’s Own and Oroweat, Pepperidge Farm’s inherent healthy image among consumers has no doubt helped its performance, along with product innovation including new whole grain extensions and products geared to weight-conscious consumers like Pepperidge Farm’s Light Style and Very Thin breads.
Consumers want it all: nutrition, quality and a reasonable price. According to Mintel’s custom consumer research, the three qualities most important to bread shoppers are: “made from whole grains,” “texture of the bread” and “bread is on sale.”
Over half of respondents agree with the statement “There are too many nutritional claims for me to keep up with these days.” There is a clear need for consumer education about these claims. Even more troubling, 50 percent agree that “a lot of bread products appear to be much healthier than they really are.” Not only are many consumers confused, many of them are cynical about nutritional claims in bread. In spite of these concerns, 47 percent value nutrition more than price when they buy bread and 42 percent read the nutritional label before buying bread.
Consumers tend to be ambivalent about the difference between private label and name brand bread in taste. Some 48 percent of respondents say they can taste the difference between store brand and name brand bread. However, when listing important attributes in choosing bread, flavor and taste are not among the top five preferences. Store brands have an opportunity to steal share from branded players by improving taste and quality because half of survey respondents say they can taste the difference between store brand and name brand bread. Target and Wal-Mart are ahead of this curve and have both launched premium-quality private label breads. Quality of the ingredients is considered by 26 percent of respondents when buying bread; another 18 percent want bread to taste like homemade.
Consumers are well aware of the rising cost of bread: 82 percent of respondents say they’ve noticed bread prices go up this year, while 77 percent say they are actually paying more for bread than they did last year. It is likely that some consumers have switched to less expensive brands like private label or are buying whatever brand is on sale. Consumers know that they can save money buy choosing private label over brand name breads, and with consumers pinching pennies in this troubled economy, 45 percent admit they are buying more store brand/private label bread than they did last year. There is a huge opportunity for companies that make healthy, better tasting, and yes, less expensive bread, since 60 percent of respondents say they would “eat healthier bread more often if it weren’t so expensive.”
Private label brands have an opportunity to steal share from branded breads. Consumers are paying more for both branded and private label bread: since 2005, the retail price of each has risen about 11 percent on average according to IRI/Mintel. Private label still represents a significant savings over brands, for example, the average retail price of a loaf of private label fresh sandwich bread is $1.56, compared to $2.84 for name brands. Consumers can save $1.28 per loaf with private label, a significant savings for a family that consumes several loaves per month. Consumers are likely to switch among bread brands and “trade down” from premium brands to buy bread that is on sale.
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