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The appearance of more specialty breads spells challenging times for the Western European baguettes market, writes Jonathan Thomas.

Baguettes remain a central feature of the bread industry in Western Europe. However, if their home market of France is any sort of indicator, their strong position is coming under increased threat from the emergence of more specialty products, many of which are inspired by greater consumer exposure to ethnic cuisine.

The baguettes sector is also coming under increased pressure from health concerns, which have led to falling consumption of bread across much of the Western European region within the last few years. The health trend can be illustrated by the growing demand for bread featuring ingredients such as seeds and grains, as well as the fact that more bakery goods are catering towards gluten-intolerant consumers.

Baguettes in the bread market

France has long been recognized as the European home of the baguette. This heritage is reflected in the fact that the country has a very strict definition regarding what can be used in the manufacture of baguettes – only four ingredients are permitted, namely wheat flour, salt, water and yeast or some other rising agent, and the usage of preservatives and other additives is strongly discouraged. In France, approximately 10 billion baguettes are consumed per year, or 320 per second.

Despite this strong heritage, demand for traditional baguettes in France has fallen in recent years. One reason for this has been the decline of traditional bakeries in the country – their number has dropped from around 50,000 in the 1950s to approximately 30,000 today. Another reason is the rising cost of baguettes, since their average price has increased by almost a quarter (24%) within the last decade, as well as greater competition from other forms of specialty breads such as tortillas, flatbreads, bagels and pita bread.

Sales of baguettes in France have also suffered due to the decline in bread consumption. Per capita consumption has fallen from almost 55 kg in the early years of the current millennium to 44 kg in 2015, due to factors such as the decline of traditional mealtimes. That said, baguettes still account for around 70% of overall consumption of bread in France, and many consumers retain a strong loyalty to their local bakeries, which bake fresh on the premises.

Similar trends exist elsewhere in Western Europe, where overall consumption of bread has been hit by the perception that it is high in salt, calories and carbohydrates, although growth has occurred within sectors such as specialty breads. In the UK, for example, this sector grew by more than 4% to GBP463m during the 2015/2016 period, and equates to almost 13% of the total bread market. UK consumers continue to display a greater interest in more specialist forms of bread, much of which is marketed on an artisanal platform. As is the case in France, however, competition from other forms of specialty breads (e.g. ciabatta, naan, pita and tortillas) remains strong.

Foodservice/food to go

Baguettes are ideally positioned to capitalize on the continued growth of the European food-to-go (FTG) market, and this is where many future opportunities for the sector are likely to arise. Consumers in many parts of Europe now demand an ever greater choice of foods suitable for portable eating occasions, for both breakfast and lunchtime occasions, as well as for between-meals snacks. Not only are consumers increasingly time poor, but growth within the FTG market is being driven by the emergence of new ordering and payment technologies, which can be accessed from devices such as smartphones.

Although most sources agree that the FTG market is growing across much of Europe, obtaining a precise estimate of the sector’s size is complicated by the wide variety of food and beverages which make it up, as well as the differing array of locations through which they are consumed. The UK market, for example, was worth an estimated GBP16bn in 2016, a figure expected to increase by over 31% to GBP21bn by 2021. Almost three-quarters (73%) of UK consumers buy into the sector at least once a week, with food choice, quality and taste all important consumer drivers. 

Major suppliers

Many of Europe’s leading industrial suppliers of bakery goods are active within the baguettes market. One company which recently increased its presence in the baguettes sector was Lantmännen Unibake, which operates 36 bakeries in 15 countries worldwide and produces 585,000 tonnes of bakery goods per year. Early in 2017, the company acquired Anderson Bakery, a Swedish manufacturer of baguettes with an annual turnover worth SEK75m. The acquisition of Anderson, which had focused upon bake-off baguettes since 2002, enables Lantmännen Unibake to continue its expansion within the Nordic countries. In 2016, the company announced it was to invest EUR100m into rebuilding its Londerzeel bakery in Belgium’s Flanders region, which had previously been destroyed by fire. Lantmännen Unibake accounts for up to 70% of demand for baguettes in this part of Europe.

You can read more in our print magazine European Baker & Biscuit (March/ April 2017)! 

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