(last updated July 2019)
What has been happening in the bakery sector
In recent years there has been:
- no increase in the amount of bread eaten in the home, but an increase in the amount of bread used in take-away sandwiches
- a trend towards artisan, speciality and continental breads and a shift away from sliced white bread towards brown and wholemeal loaves
- an increase in demand for bakery snacks such as rolls, teacakes, scones and so on
- a fall in demand for large, family sized cakes as individual items like cupcakes become more popular
- supermarket bread price 'wars' so that the average price of a white sliced loaf remained the same for many years before falling during the mid 2010s as competition increased
- a significant increase in the number of outlets with in-store bakeries
- a fall in the number of independent master bakers
- an increase in the costs incurred by bakers - margins were squeezed during the mid 2010s by high wheat prices and labour costs
- fluctuations in demand for bread and bakery products due to dieting 'fads', such as the Atkins, Dukan and other low carbohydrate diets
- pressure to reduce the level of salt in bread and the amount of sugar in sweet bakery items
The supermarkets have been very successful in cornering the lion's share of the bread market by selling wrapped bread made by major plant bakeries at low prices. They have been quick to introduce ranges of 'free-from' products as customers look to cut out things like dairy and gluten. They have also introduced in-store bakeries producing speciality breads, rolls and pastries.
Although the market for these speciality items and for bakery snacks appears quite strong, you will have to decide whether:
- your business will offer a different enough range of products to enable you to compete against the supermarkets
- demand will be high enough in your area to support your proposed business. If you plan to locate in a rural area there simply may not be enough customers, unless you are aiming at a seasonal, tourist market or able to supply bread and bread products to local retail or catering businesses or to an online fine food retailer
- your local economy is healthy - if your area has been unlucky enough to suffer from many business failures and factory closures recently your customer base will be looking for the cheapest possible source of bread
It may be that you can take advantage of demand for take-away sandwiches and either offer sandwiches yourself, or supply bread, rolls and baguettes to local sandwich bars. Bear in mind that people are still looking for good value options and many bakeries have introduced budget ranges of goods like sandwiches and pastries. Fierce price wars as the supermarkets compete against discounters like Aldi and Lidl have also forced specialist bakers to cut their prices.
Keeping up to date with developments
Joining a trade association is an excellent way of keeping up to date with developments in your industry.
The Craft Bakers Association (CBA) and Scottish Bakers represent craft bakers in Great Britain. Contact the CBA at 21 Baldock Street, Ware, Herts, SG12 9DH. Scottish Bakers are based at Unit 2, Halbeath Interchange, Kingseat Road, Dunfermline KY11 8RY. Both the CBA and Scottish Bakers produce a newsletter for members. The Federation of Bakers represents the interests of plant bakers and has useful information about the baking industry on its website. British Baker is a weekly trade magazine aimed at the whole of the bakery sector. You can subscribe to British Baker on the bakeryinfo website.
The Real Bread Campaign (part of Sustain) aims to support independent bakers who want to produce traditionally-made bread from wholesome ingredients. Visit the Real Bread Company website for information on setting up a Real Bread enterprise.
You will be able to obtain a lot of useful information if you go to a trade show or exhibition for the bakery or catering sector. You will be able to speak to specialist oven manufacturers and find out which type and size of oven would be most suitable for the type of business you have in mind.
If you are planning to offer sandwiches it is important to do as much market research as possible on the sandwich bar sector.