Two months ago, we were presented with a health and economic crisis caused by Covid-19. We have therefore set out to identify the emerging trends and share the first industry forecasts. But first, let's rewind to early March. At that time, we were in a continuity scenario in the context of a bread product distribution model that had been undergoing a deep restructuring process for some years. With the food service channel as the main growth engine for the industry, home consumption was still determined by the transfer of consumption to the organised distribution channel, which, over the 12 months preceding the end of June 2019, had gained a 0.8% share in volume, reaching 58.7% of total household bread consumption. The bakery channel, meanwhile, continued to decline, losing 31% of its share of consumption.
This continuity context in multichannel distribution was part of the likewise continuous decline in the consumption of bread and pastries at home which, according to the data provided by the Ministry, fell by 0.8% for bread and 1.7% for cakes and pastries. Data regarding consumption of bread in organised distribution provided by Nielsen also shows a downward curve, with a decline of 0.1% in 2019, less than in previous years.
Aldi and Carrefour ring in the new
In this context, the most noteworthy initiatives aimed at accelerating value propositions in bakery distribution are being pursued by Aldi, which has been consolidating an assortment of fresh and packaged bread and pastries with more than 75 products under its brand in recent months under the 'El Horno de Aldi’ brand, This was launched on the Spanish market in 2019, and includes everything from traditional bread sticks to freshly baked and packaged pastries. In the case of Carrefour, the bakery section houses some of the most outstanding new additions to stores in recent months. The French group has been testing a new self-service format, which includes an assortment of 56 types of of breads and sweet and savoury pastries. Carrefour explained that "one new feature of the pilot is the self-service furniture, the bread slicer, which allows the customer to select their bread and slice it to their preference, and the payment system that charges by unit and model at the cash register".
El Corte Inglés, meanwhile, stood out in terms of sustainability, incorporating new sustainable packaging in all its store models, including FSC (Forest Stewardship Council) certified paper bags, both at the cash register and in the fruit, vegetable and bread aisles, as well as compostable trays for French toast in the bakery. In the second half of the year, Eroski also presented new packaging in its pastry section, made entirely with 100% recycled and recyclable PET.
The day after, safety and accelerating trends
Now, and in the throes of this new, unexpected health and economic crisis, we can see how during the first stage, with the country's residents confined to their homes and the food service channel closed, all food spending has focused on the home supply channel. In organised distribution, according to data provided by the Ministry, bread consumption increased from the first weeks of the state of alarm, reaching 35.7% -32.3% in weeks 15 and 16. In the case of unpackaged pastries and confectionery, the industry has reported a notable decrease in sales since the start of the crisis, "with very tough times in the month of April", conditioned by its particular supply dynamics and the priority given to basic foodstuffs. There are also reports that consumption has been stabilising since the end of April.
In this consumption context, distribution has ramped up security measures in stores. In terms of the baked goods section, in addition to cross-cutting measures to limit capacity and establish the use of gloves, several chains have simplified their assortments of baked goods, particularly pastries, or have stopped using the famous bread slicers.
Along these lines, major industry players, with greater room for manoeuvre, and also some regional operators, say that they are currently promoting and expanding ranges that do not require handling at the point of sale and packaged products, individually, but primarily in multi-unit packs, meeting the demand for safety and consumer confidence.
Beyond this, the industry says that bulk sales “can continue, under stringent safety conditions, such as allocating personnel to assisted sales, using masks, gloves and disinfectant gels, installing perspex screens, etc".” There is also talk of need to develop " “communication plans to support and increase consumer confidence"”.