The "Atkins effect" could turn out to be the best thing for the baking industry since sliced bread, Mike Marcucci, CEO of Chicago-based Alpha Baking Co., announced at this year's American Society of Baking conference.
"Wholesale bakers will sell more profitable whole grain, low-carb, variety breads and less white bread, especially private label, which is almost impossible to make money on," Marcucci was quoted by the Food Institute Newsletter. "It's much healthier for the consumer, and it's much healthier for the baker."
Hopefully, that will be the case. There's no doubt sales of fresh bread, particularly white bread, have steadily declined for the past four years. Obesity concerns and the interest in health and wellness, especially among the increasing numbers of baby boomers, is changing diet behaviors. Consuming less bread is one of them, particularly for those on the low-carb Atkins and South Beach diets.
According to a study conducted by the Shapiro Research Group and commissioned by the National Bread Leadership Council, 40 percent of Americans are eating less bread now than a year ago. That reality led to a number of bakery closings by industry leaders.
Interstate Bakeries Corp., Kansas City, Mo., maker of Wonder bread, closed five facilities this year and made news recently after it hired turnaround firm Alvarez & Marsal. The company delayed filing its annual report with the Securities and Exchange Commission and outlined possible credit concerns, sending its shares and analyst ratings down. Chicago-based Sara Lee Corp. shuttered 10 plants and cut 43 regional bread brands since its acquisition of Earth Grains in 2001.
A panel of doctors and scientists issued final recommendations in August about what advice should be included in the new Food Guide Pyramid. They said people should eat at least three 1-oz. servings of whole grains each day, preferably in place of refined grains or white bread. This was more bad news for an already struggling sector.
The good news is fresh strategies are dampening the death knell for bread bakers who are not ready to give up their slice of profitability. Turning trends and challenges into opportunities, bakers have developed low-carb, whole-grain products and reformulated existing products for carb watchers.
Flowers Bakeries, Thomasville, Ga., launched 7 Gram Carb Nature's Own Wheat 'n Fiber bread; Wheat n Soy; and Sugar Free 100% Whole GrainWheat. Weston Foods U.S., Horsham, Pa., teamed with Atkins Nutritionals, Ronkonkoma, N.Y., to roll out new low-carb offerings. Interstate Bakeries debuted Home Pride CarbAction and fiber-enriched super-premium Baker's Inn brand. Pepperidge Farm, Norwalk, Conn., introduced Carb Style breads and rolls.
Bimbo Bakeries USA, Fort Worth, Texas, is targeting Hispanic consumers with Bimbo Multicereal and Bimbo Double Fiber breads and Mrs. Baird's Harvest Selects multi-grain breads. Meanwhile, Sara Lee's low-carb, low-calorie Delightful Bakery Breads are bringing in delightful bottom line results.
Marcucci may be correct in his assessment. The Atkins challenge has become an opportunity for flexible companies that innovate and move products to market quickly.
Top Vendors of Fresh Bread (for year ended July 18)
$1,489.7
(-5.7)
26.4
784.5
(-3.7)
13.9
600.1
7.8
10.7
585.3
0.1
10.4
400.4
2.4
7.1
310.1
4.4
5.5
299.4
6.3
5.3
105.1
(-8.2)
1.9
68.2
3.7
1.2
66.7
2.7
1.2
Total fresh bread
$5,632.3
(-1.2)
