Organic Bread on the Rise

According to a new report from multinational banking and financial services company Rabobank, while U.S. bread consumption is growing at a marginal rate, packaged organic bread sales have increased by double digits.

Rabobank Consumer Foods Analyst J.P. Frossard explained in the report, “The Greatest Thing Since (Organic) Sliced Bread,” that the category can still attract new audiences and generate significant profits, with a substantial focus on innovation and top-line growth.

The report noted that at retail, packaged sliced bread has lost share to artisan-style products such as those from supermarkets’ in-store bakeries. Although the organic segment’s performance is remarkable, ongoing innovation is necessary to encourage repeat purchases of packaged bread.

Rabobank’s report further noted that consumer preferences are increasingly influencing the entire value chain. Innovation to boost top-line growth and grow margins should center on new, functional and clean ingredients; attractive and sustainable packaging; and proper display at the point of sale.

Additionally, the report pointed out that such differentiated products could even win coveted space in the supermarket perimeter.

“Understanding store traffic and promoting new, differentiated products in the perimeter are fundamental to matching new audiences to differentiated products,” Frossard wrote. “Products with superior ingredients and packaging can only benefit from a more visible location in stores – moving away from the center aisle, where you’ll find several other old-style and lower-priced breads, rolls and buns. Using their influence over retailers, big bakeries should advocate to – if not merge – at least move the center toward the perimeter and avoid placing fresh products inside a freezer."