Flat bread?

KANSAS CITY– No matter how you slice it, times are challenging for fresh packaged loaf bread as the classification stays beset by uninspired sales.

Simply ask A. Ryals McMullian, chairman and ceo of Flowers Foods Inc., the second-largest gamer in the United States center-store sandwich bread sector. The Thomasville, Ga.-based business’s packaged bread brand names consist of Nature’s Own, Marvel, Dave’s Killer Bread and Canyon Bakehouse, amongst a host of others.

” If you look, the total classification has actually been down 2.5% to 3% approximately,” McMullian stated at the Barclays Global Customer Staples Conference. “However if you drill down a level even more and take a look at the sub-segments of standard loaf– which indicates the 20-oz honey wheats and other white breads– that part of the classification has actually been down 5% to 6%, and we’re rather exposed to that. So that’s the problem. Fortunately is that we are innovating around that and have great deals of development in the portfolio, whether it’s our (Nature’s Own) keto items or Dave’s and Canyon, which continue to do actually well.”

Up until now in financial 2025, Flowers has actually published top-line declines in fresh packaged bread, with retail sales down 3.2% in dollars and 2.9% in systems for the 2nd quarter after particular declines of 2.3% and 2.5% in the very first quarter. The business’s dollar share stood at 16.6% for the 2nd quarter, about even with 16.7% in the very first quarter and up from 15.9% in the financial 2024 4th quarter.

” The difficulty for us is, how do we attend to that soft range of white bread classification?” McMullian stated. “That’s the part that I stated on our second-quarter call that I believe is a generational shift. And I might be incorrect– I do not believe I am– however I do not believe it’s returning. I do not imply to state that standard loaf and white bread are disappearing; they’re not. There are lots of that offered in the United States, which’ll continue. I do believe, with time, it will end up being a smaller sized part of the classification. So once again, our task is to find out how to innovate around that and change that with more separated products that have qualities that customers are searching for.”

Grupo Bimbo SAB de CV, the biggest gamer in packaged sandwich bread, indicated standard loaf bread as a factor to The United States and Canada sales declines of more than 4% in each of the very first 2 quarters of 2025, driven primarily by softness in the United States market. Bimbo Bakeries U.S.A. bread brand names consist of Sara Lee, Arnold, Bimbo, Rustik, Beefsteak, Nature’s Harvest, Stroehmann and Freihofer’s, amongst numerous others.

” In the United States, we’re seeing a bifurcation of customers, where the financially stressed out customers are moving down to personal label, or other worth offerings, while more wealthy customers are transferring to more superior items,” Mark Bendix, executive vice president of The United States and Canada for Grupo Bimbo, stated in a teleconference on second-quarter outcomes. “So that difficulty, as the biggest gamer, we have an extra-large direct exposure in the biggest sector of that classification in the middle, which is where the bulk of the classification decreases are taking place.

” We do not have sufficient momentum yet to balance out the losses. However what we’re now concentrated on is broadening our offerings in the worth sector. We have actually presented half loaves, which are doing exceptionally well, and Bimbo bread in the worth sector, and the circulation is broadening throughout the whole nation. We’re seeing Bimbo buns likewise presented into the worth mainstream. And in the premium sector, we’re broadening circulation of Rustik and the intro of protein-focused items, which have actually actually resonated with health-conscious and GLP-1 customers.”

Searching for gains

In general, United States dollar sales for center-store sandwich bread fell 2.3% to $10.52 billion in the multi-outlet retail channel for the 52 weeks ended Aug. 10, according to Chicago-based marketing research company Circana. System sales were down 3.4% to 3.07 billion, as cost per system edged up 1.1% to $3.42.

” Within the center-store sandwich bread sub-category, the 3 biggest tastes are all revealing dollar sales reduces: white, about 31% of the dollar sales of center-store sandwich bread, is down 4.9%; wheat, the 2nd biggest taste, with a 21% dollar sales share, is down 6.5%; and grain, the 3rd biggest taste, with a 12% dollar share, is down 1.4%,” stated Dawn Aho, principal of customer insights for the pastry shop vertical at Circana.

” White sandwich bread has actually likewise lost nearly a point of dollar share over the in 2015,” she included. “Nevertheless, it is generally the biggest gamer. In this case, white/plain taste loses when brand-new tastes or special bread choices get in the market. Customer patterns are most likely affecting this shift, as they try to find much healthier choices, brand-new and special tastes or types, or smaller sized bundle sizes.”

Throughout the 52-week duration, 8 of the 10 biggest sellers in center-store sandwich bread, consisting of personal label, knowledgeable dollar sales reduces, while 9 of the 10 published system decreases, Circana information revealed. Personal brand names increased in both dollars and cost per system.

” Bread is considerably down; we’ve in fact been justifying SKUs,” stated Tony Martin, president of Martin’s Famous Pastry Shoppe Inc., the Chambersburg, Pa.-based maker of the Martin’s potato rolls and bread brand name. “So we’re taking an action back. In a couple of years, possibly we’ll include some (SKUs) back, however from a bread viewpoint, we’ve in fact cut the better-for-you bread, which injures my pride. It was my preferred bread, however entire wheat, we left it.”

Lots of buyers have actually gone with healthy options aside from wheat or left the bread classification, Martin kept in mind.

” The main factor is we believe the customer of that (entire wheat) item either transferred to a high-premium natural bread, or an excellent part of them simply stopped purchasing bread completely,” he stated. “Since if they’re on the health side, simply listen to the news– go keto, or head out. I believe that’s a substantial part of that customer base. They simply left eating bread completely.”

Ryan Paterakis, co-principal and senior vice president of sales and marketing at H&S Bakeshop Inc., concurred that bread is a classification in shift. Based in Baltimore, the H&S Household of Bakeries consists of H&S Bakeshop, Schmidt Baking Co. and Northeast Foods.

” The classification is progressing,” Paterakis stated. “I believe white bread usage is down due to the fact that individuals are taking a look at more ranges, particularly better-for-you items. And I believe they’re lured by various, ingenious items that are brand-new and interesting and getting individuals to attempt the bread rack once again.”

Of the leading 10 sellers in center-store sandwich bread over the 52 weeks, 5 saw both their dollar and system sales fall by 4% or more. Personal label was up 3.7% in dollar sales however down 2.7% in systems.

” If you take a look at the numbers, system volume is down,” Paterakis stated. “Generally, if you take a look at personal label which’s down, possibly branded sales are up. Or if branded sales are down, possibly individuals are going shopping more personal label. However there were some cases where both were down, and we were attempting to find out why that was, not simply for us however as a market in general.”

Remarkably, cost per system for personal brand names in center-store sandwich bread climbed up 6.6% to $2.28 for the duration however stayed the most affordable amongst the leading 10 gamers. All the other sellers had price-per-unit modifications of around 1% or less, with 6 revealing declines and 3 publishing boosts.

Source: Sosland Publishing Co.

” We’re attempting to play in the low and high,” Bendix stated in an expert get in touch with Bimbo’s very first quarter. “And after that through RGM (income development management), we are doing selective promos, due to the fact that things are a lot various now in regards to marketing action from customers in the United States after the pandemic.”

Lower flour expenses have actually been a double-edged sword, Martin stated.

” The decrease in expense for flour is great and bad,” he stated. “When need is down and costs for products are down, there’s a rush to decrease the expense of the item. Among the biggest merchants in the nation, which is doing incredibly well and putting a great deal of pressure on local grocery stores, they’re ending up being a lot more aggressive and wishing to run lower discount rates to offset their loss in volume in general.”

On the other hand, brand-new low-price rivals have actually shown up the heat in packaged bread, McMullian stated.

” This has actually constantly been a competitive classification; that’s not brand-new,” he stated. “Margins are thin in this organization. It has actually constantly been quite hard sledding. I pointed out personal label trade-down, that’s completely typical and not amongst the important things I need to stress over. The lower-price entrants are a bit of a modification, and definitely we’re attending to that with little loaves and some other things. However that’s most likely the greatest distinction, top quality products that are priced at or perhaps often a bit listed below personal label.”

Behind the patterns

For August, center-store packaged bread sales fell 3.1% to $1.1 billion, with systems down 3.7% year over year, based upon Circana United States multi-outlet information mentioned by 210 Analytics.

” While the sales patterns have actually pointed down for a couple of years, we have actually likewise resided in a world of continuously modification since March of 2020, and the group moving pledges another years of modification ahead,” stated Anne-Marie Roerink, president of 210 Analytics, a San Antonio-based grocery store research study company.

Roerink mentioned a “range of underlying patterns at play” that have actually slowed sales of packaged bread, particularly standard loaves.

” Primarily, we need to take a look at the widening competitors for sliced/packaged bread,” she stated. “Generally, (center-store loaf) bread took a look at other types or brand names of breads, and possibly buns and rolls, as their primary competitive set.”

And while customers are believing more with their wallets, the buyer base likewise is altering, Roerink kept in mind.

” We have actually seen a switch to personal brand name products, typically cost a lower cost point, which is going to impact sales,” she stated. “We have actually seen individuals change in between classifications to stabilize their costs or possibly even bake their own bread, similar to Taylor Swift. However there’s a similarly extensive group shift occurring. For thirty years, boomers have actually held the bulk share of grocery dollars. In reality, they are still the bulk buyer today. However when you turn to development versus existing sales contributions, millennials represent in between 50% and 60% of all development throughout many classifications in the shop. That indicates millennials are quickly acquiring share, and they prepare, store and consume really in a different way from boomers.”

That group shift is displacing loaf bread from its standard area in meal celebrations.

” We’re seeing that amongst Gen Z and millennials, tortillas, naan, covers, and so on, are changing a few of the standard sliced/packaged bread celebrations,” Roerink stated. “They remain in essence making the very same precise sandwich that generations before them made with bread, however they’re utilizing a various base. Other consuming patterns– such as the appeal of bowls, ramen, pho, tacos, and so on– likewise cut into the standard sandwich celebrations. Next, think of the appeal of Uncrustables and comparable developments that likewise take on a conventional PB&J utilizing sliced up bread.”

Although Circana information suggest the overall center-store bread classification was down 1.9% in dollar sales and 2.9% in systems over the 52 weeks through Aug. 10, a variety of sectors showed development. They consist of crusty/meal bread (up 6.1% in dollars and 4.6% in systems), panini/ciabatta/focaccia bread (up 9.5% in dollars and 8.1% in systems) and Hispanic bread (up 11.5% in dollars and 8.8% in systems).

” Looking one level much deeper programs there are lots of winners in the bread aisle,” Roerink stated.

Within center-store sandwich bread, ranges producing dollar sales development consist of sourdough (up 25%), Italian (up 9%), Hawaiian/sweet (up 5.9%), keto (up 2.1%) and natural (up 0.8%), Circana’s Aho stated. Center-store sandwich bread with natural claims now represent almost 10% of the sector’s dollar sales, and products with carb or keto claims represent over 2%, she stated.

” Lots of big classifications have actually revealed sluggishness in the last couple of years,” Aho stated. “As the economy affects acquiring power, diet plan patterns consisting of keto and GLP-1 medications, the still-pending impact that HHS (United States Department of Health and Person Solutions) might have on dietary guidelines and limitations, and the development in alternative sandwich providers to standard sliced up sandwich bread are all aspects. There are pockets of development from keto, gluten-free and natural products, along with half-packs driving sales for some brand names.”

Packaged bread producers are “all in tune” with customers’ growing affinity for better-for-you offerings, H&S Bakeshop’s Paterakis stated.

” If you take a look at the bread rack now versus a years earlier or twenty years earlier, you have a lot more range out there, and it’s not even simply healthy/better for you,” he stated. “You have actually got numerous other various ranges, even in the wheat bread classification. So the customer is looking more knowingly at, what is healthy?”

The Schmidt Old Tyme brand name is targeted at conference several dietary requirements with its 647 line, that includes white, wheat, multigrain, rye, Italian and potato sliced loaves plus rolls, English muffins and bagels.

” With Schmidt, we brought out our 647 bread that resolved the need for a lower-carbohydrate bread, however we likewise included low calories and high fiber to attend to more than one location, instead of simply attempting to cut carbohydrates in basic,” Paterakis stated.

Likewise under the Schmidt Old Tyme label is the Omega Me Crazy! line, consisting of Awesome White (with 3 times the protein of standard white bread), 21 Grain, Ancient Grain and 100% Sprouted Whole Wheat ranges. Similarly, the Schmidt Old Tyme Craftsmen’s Option line addresses need for premium products and more range and worth.

” What we did there was attempt to concentrate on some patterns with individuals who desired the healthy/better-for-you or artisan-style breads, and half loaves to think of food waste and smaller sized parts,” Paterakis stated of Craftsmen’s Option. “Similar to we made with 647, we did an artisan line in a half loaf that provides healthy/better for you. There are ancient grains and seed bread because line, however we likewise do the indulgent side. We have a brioche loaf and a rustic Italian, too.”

Flowers continues to control in natural fresh packaged bread, holding a 73.9% dollar share over the 52 weeks through completion of its 2nd quarter. On the other hand, its dollar share in gluten-free fresh packaged bread increased to 38.2% in the duration from 37.9% at the close of financial 2024.

” Organics will continue to be a brilliant area,” McMullian stated. “We were informed for several years that gluten-free was a trend and was going to disappear. Well, it never ever has. It has actually continued to grow and succeed once again.”

Customers likewise are welcoming the worth provided by smaller sized loaves under the Nature’s Own and, more just recently, Wonder brand names.

” They’re doing extremely well,” McMullian stated. “Market shifts in the nation and individuals simply seeking to decrease their usage of carbohydrates or they do not require as much and do not wish to be inefficient by throwing away half a loaf of bread– possibly it fits that expense completely. I believe we began with 3 SKUs and have 6 now. We’ll continue to construct on that.”

Keeping an ear to the ground

Even as customers shift in between sectors and brand names in center-store bread, many families are still purchasing approximately the very same variety of systems (more than 30 systems each year) and making the very same variety of bread purchase journeys (over 23 journeys each year), Aho stated.

With its premium packaged sliced up bread, Berwyn, Ill.-based Turano Baking Co. has actually held its own in the middle of altering customer habits. Turano’s ranges consist of rustic grain, rye and Italian loaves along with a round pane loaf and a broad range of rolls.

” Our breads are superior, so our volumes are really constant,” stated Joseph Turano, president.

” As all of us understand, the economy has really little development going on, however we have actually discovered client bases that are growing,” he described, including that the business is “constantly introducing and establishing brand-new items each quarter to stay special and competitive for our consumers.”

In Grupo Bimbo’s second-quarter call, CEO Rafael Pamias highlighted the “durability and breadth” of the business’s bread portfolio.

Picture: Circana Omnimarket

” Our just recently introduced price-value bread portfolio is efficiently attending to moving usage characteristics, while our ongoing growth in artisanal breads supports our premium offering,” Pamias stated. “At the very same time, we have actually gotten market share in crucial classifications such as top quality buns and rolls, treats and mainstream bread, which had actually experienced numerous quarters of decreases however is now supporting for us.”

Eric Mayerchak, vice president of retail method and classification management for Fort Wayne, Ind.-based Auntie Millie’s Bakeries, kept in mind the standard long loaf market is experiencing a shift in customer engagement, driven by tighter budget plans, progressing dietary choices and increasing quality expectations– even as total usage decreases.

” Better-for-you items and smaller sized loaves have actually valued increased interest; on the other hand, standard loaf breads are working more difficult to keep their share of customer costs,” he informed Baking & & Treat, a sis publication of Milling & & Baking News. “Makers need to continuously check out brand-new methods to distinguish themselves from the competitors, not simply through item type and function, however likewise through rates methods, marketing efforts and customer engagement techniques.”

The difficulty, Mayerchak stated, is that the classification is filled with comparable designs and tastes, all completing for restricted rack area that isn’t broadening.

” Standard loaf bread use for sandwiches and toast is slowly losing significance, as progressing at home dining routines, school meal programs and out-of-home usage continue to improve buyer habits,” he stated.

For some customers, bread has actually ended up being less of a fit in their diet plan. Increasing usage of GLP-1s might be having some effect, however executives see the weight-loss drugs as impacting the wider food market, not simply bread.

” I’ll state the indulgent buyer, somebody who simply desires actually taste, they’re staying,” Martin stated. “However those on the edge, from either a financial viewpoint or a dietary viewpoint, have actually actually selected to not consume bread, in basic. They still need to have a bun for a hamburger. There’s actually not a replacement– lettuce does not work. Bread is simply among those things that utilized to be a staple, and I’m uncertain it’s as much of a staple as it was.”

McMullian stated he sees “the entire health and health concern” as something bread business require to much better harness, mentioning the “make America healthy once again” motion and greater examination of processed foods.

” Bread is type of getting a bum rap today,” he stated. “However among the important things that’s incumbent upon us as a market, and particularly Flowers as a business, is to retake that story, which I believe in numerous methods we have actually sort of delivered to the impact of celebs. Which’s our fault as a market. However we are bent on regaining that due to the fact that there’s a great deal of false information out there, a lots of false information, and we have a portfolio of items that are mainly much better for you.”