Bake-off Bakery Markets in the EU 2001 - 2004 - 2009/10 - 2014 Mini Market Report June 2011

© Gira 2011

1

Consumer products and production methods


This Mini Market report contains information drawn from the "Bake-off Bakery Markets in the EU" programme, published in December 2010 and covering 16 countries, representing probably 90% of all bake-off production in the EU & Switzerland




Products covered are all bake-off products in the areas of bakery: bread, viennoiserie (morning goods), patisserie (cakes) and savoury pastry snacks




We analyse all distribution channels: artisan bakers, modern retailers (hyper- and supermarkets), discounters, “other retail sectors” (small grocery stores, c-stores and gas-stations), catering (commercial and institutional/social)




Production methods:

Bread Bread

 From scratch baking: bakery products prepared and baked freshly from base ingredients on site  Re-selling: buying fresh bakery products (to artisan or industrials) and selling as they are in the outlet  Bake-off: bakery products produced at industrial level, then chilled or frozen and finally re-baked (finished) at the outlet where they are sold


Production methods

Bake-off technologies:

Fresh bread

Consumer products

 RTP / Ready to Prove: to prove and to bake in store  RTB / Ready to Bake: to bake in store  Fully baked: to thaw (in an oven or at ambient temperature) in store © Gira 2011

"Artisanal"

Made from scratch on the premises

Industrial prepacked long life bread

Industrial prepacked for homebaking

"Industrial"

Bought fresh from industrial bakers

Bakeoff

2

Key findings


The fresh bakery market is mature but has recently been showing contrasting trends:  Viennoiserie and patisserie products have been hit by the economic crisis and by increasing health concerns  Bread has somewhat benefited from the crisis as it is generally a "commodity", low price product  Savoury pastries are surfing on the snack and food on-the go trends. This is in most countries a young market compared with the other bakery products




Bake-off bakery products accounted for 21% of fresh bakery consumption in 2010




Bake-off prospects will vary depending on the products:    

Bake-off viennoiserie is approaching saturation in some markets There are still very good prospects for bake-off bread – but not in all sectors The development of bake-off patisserie is limited to just some product categories Bake-off is perfectly suited to savoury pastry supply in all sectors (quick and warm)




Bake-off technologies definitely facilitate the trend towards more convenient products




Modern retailers are the largest channel for bake-off bakery products:  But there are also opportunities in a number of other segments, by product and by technology  The growing involvement of hard-discounters in fresh bread sales and bake-off will probably have considerable effects on retail competition as well as on the supply side




Concentration is ongoing at the industrial level:  With fierce competition between the multinational operators  While some national players are becoming bigger and bigger. © Gira 2011

3

Bakery consumption overview Bread and fresh products dominate consumption Total consumption in EU-16: 33.7 mio tonnes in 2010 Viennoi serie 7%

Patisserie 9% Savoury pastry 3%




Total bakery consumption was assessed at 33.7 mio tonnes in 2010 and EUR 113.5 bio




Total consumption has decreased by 0.2% pa between 2004 and 2009, but is expected to grow by +0.2% pa until 2014.

Trends in bakery products consumption by country, 2009/2014

Bread 81%

2.0%

CH

Source: Gira

Fresh 73%

Prepacked homebaking 4%

1.5%

% volume growth pa 2009/2014

Prepacked Long-life 23%

DK 1.0%

BE 0.5%

FR

SE FI

PT

UK

NL

DE

0.0% 0

1,000

CZ -0.5%

PL PL

2,000

3,000

ES

4,000

5,000

6,000

7,000

8,000

9,000

IT

HU

Market volume ('000t)

Source: Gira -1.0%

© Gira 2011

(Size of bubble denotes value in EUR mio)

4

Fresh bakery consumption dynamics France and Germany are the biggest markets Fresh bread: 20.7 mio tonnes in 2010 PT

Fresh viennoiserie: 1.6 mio tonnes in 2010

Others

BE

CZ NL

DE

BE

Others FR

AT

NL

UK

UK

HU ES

PL FR

DE

IT

PL IT

ES

Source: Gira

Fresh patisserie: 1.7 mio tonnes in 2010 HU

AT

Fresh savoury pastry: 0.5 mio tonnes in 2010 Others

Others

DE FI

DE

CZ BE

Source: Gira

PL HU

PT UK

IT

FR

ES PL

FR ES

IT

NL

Source: Gira

© Gira 2011

UK Source: Gira

5

Fresh bakery products distribution channels Modern retailers will become the number one circuit by 2014 Fresh bakery distribution by volume – 2010, EU-16

Trends in fresh bakery distribution 2009/2014, EU-16

% volume growth pa 2009/2014

3.0%

2.0%

Modern retailers

Commercial catering Social catering

1.0%

Other retail

Bakery chains

0.0% 0

1,000

-1.0%

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000 10,000

Artisan bakers

-2.0%

-3.0%







Source: Gira

Market volume 2009 ('000t)

Artisan bakers' share in fresh bakery distribution will be 30% by volume in 2014, against 33% in 2010 This will be mainly to the advantage of modern retailers Whereas bakery chains & other retailers' market share will remain steady Commercial catering will be the other winning channel towards 2014.

© Gira 2011

6

Operators in fresh bakery products production Industrial production will overtake artisanal production Trends in fresh bakery supply structure – 2009/2014, EU-16

Fresh bakery supply structure – 2010, EU-16 5%

Artisan bakers 46%

Retailers instore 6% Others* 1%

Bake-off

4%

% volume growth pa 2009/2014

Artisanal supply

3%

Fresh

2% 1%

Fresh finished 26%

In-store scratch

0% 0

2,000

4,000

-2%

*: other retail and catering Source: Gira

Bake-off 21%

Industrial supply

6,000

8,000

10,000

12,000

14,000

-1%

Artisan

-3% -4% Source: Gira

Market volume ('000t)




In 2010 "artisanal" supply accounted for 53% of EU-16 fresh bakery product consumption, against 47% for industrial manufacturers




Respective shares will be inverted by 2014 with 52% industrial production  Growth will mainly come from bake-off  Retailers' in-store scratch production is set to remain almost steady.

© Gira 2011

7

Fresh bakery products production methods Bake-off holds high share for viennoiserie and savoury pastry EU-16 Fresh bread supply - 2010

EU-16 Fresh viennoiserie supply - 2010

EU-16 Fresh patisserie supply - 2010

EU-16 Fresh savoury pastry supply - 2010

© Gira 2011

8

Bake-off bakery products market Bread and ready-to-bake products dominate consumption Bake-off bakery products consumption in 2010: over 6 million tonnes* in EU-16 By product

By technology Fully baked 12%

Ready to bake 66%

Ready to prove 22%

Source: Gira

By sector Catering 20% Other retail sectors 8%

Artisans 9%

Modern retailers 49%

Bakery chains 14% Source: Gira

*: raw weight

© Gira 2011

9

The market for bake-off bakery products Germany and France are the biggest markets EU-16 Bake-off bread consumption – 2010 AT

EU-16 Bake-off viennoiserie consumption 2010

CH Others CH

PT

DE

SE

HU

Others

UK

BE

FR

AT

IT

BE NL

NL PL

DE FR

UK

IT

ES

Source: Gira

Source: Gira

EU-16 Bake-off patisserie consumption – 2010 AT

EU-16 Bake-off savoury pastry consumption – 2010

UK NL Others

HU

SE

Others

FI

FR

PL

NL

SE AT

CH

BE

BE ES

DE

ES

PT Source: Gira

ES

UK

DE

FR

Source: Gira

© Gira 2011

10

Bakery products production methods 2010, EU-16 average Artisan bakers

Modern retailers

Re-selling 6%

Bake-off 6%

Source: Gira

Scratch baking 20%

Re-selling 47%

Scratch baking 88%

Other retail sectors Scratch baking 0%

Bake-off 33%

Source: Gira




Bakery chains

Re-selling 60%




From scratch baking is the main production method in the artisan sector

Re-selling 68%

Reselling fresh bakery products dominates in the other channels:

Bake-off 36%

Source: Gira

Catering

 And accounts for 20% of modern retailers’ bakery products sales Bake-off 32%

Scratch baking 4%

Scratch baking 2%

Bake-off 20%

Re-selling 78%

 And is still highly important in catering (78% of supply)
Source: Gira

Bake-off now exceeds 30% of supply in modern retail, bakery chains and other retail sectors

Source: Gira

 Still very low in the artisan sector (6% of supply). © Gira 2011

11

Industry structure Concentration is accelerating Typology and market shares of bake-off producers - 2009

Integrated 14%

Multinational 26%

Small sized 33%

Source: Gira compilation

Medium sized 7%

Large companies 20%

% market value

100%

0%

EU- DE 16 Source: Gira compilation




FR

ES

CH

Multinational

PL

NL

IT

BE

Large companies

AT

SE

UK

Medium sized

PT

DK

Small sized

FI

CZ

HU

Integrated

The over 200 bake-off producers analysed by Gira may be classified into five main categories:  Multinational bake-off producers: Aryzta/Hiestand (CH), Vandemoortele (BE), Lantmannen Unibake (SE), Nutrixo/Délifrance (FR), CSM (NL), La Lorraine (BE)…  Forward integrated producers (bakery chains), e.g. Kamps (DE), Muller Brot (DE), Bridor (FR), Ankerbrot (AT), Fornetti (HU) … and backward integrated retailers, e.g. Edeka (DE), Rewe (DE), Mercadona (ES), Intermarché (FR)…  Large independent companies (over EUR 100 mio turnover), usually with a high presence on exports markets  Medium and small sized companies are, however, surviving by producing a small range of specialties




The Top 10 bake-off producers accounted for about 35% of EU-16 bake-off market value in 2009. © Gira 2011

12