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  • Hugo Walker

British Baker’s end of year bakery Reflections and Predictions for 2024



As the end of 2023 approaches, British Baker in partnership with Lesaffre has released a comprehensive guide of the trends we can expect in the UK baking industry and beyond in 2024, from the state of the economy to pioneering sustainable practice, to how digital media drives bakery sales. 


Economy


First up, finances. It’s no secret that inflationary pressures are hitting UK consumers' pockets, and many bakery businesses fear a fall in sales due to prices being driven up. For example, the price of an average 800g loaf of wholemeal bread has increased from £1.19 to £1.37 in only a year.


However, John Lindsay, CEO of Baker & Baker, speaks with optimism about inflation slowing to a more manageable rate short of deflation: “There remains a clear undercurrent of value within UK bakery that we expect to continue into 2024. Although the majority of the inflationary headwinds appear to have passed, there are rising costs for commodities such as cocoa and sugar. This, together with significant wage inflation, means that whilst the rate of inflation may slow, we do not expect to see any deflation any time soon”. 


The state of the economy has caused a common trend among bakers’ 2023 financial results, with market leaders such as Baker & Baker, Hovis, Krispy Kreme and Warburtons all posting increased revenues but lower profits due to rising costs.


Nevertheless, while consumers face higher costs and lower disposable income, there is reason to believe the baked goods market has a particular resilience during squeezes - as many baked goods function as a substitute for evening dinners out which tend to be the treat that gets forfeited.


As George Tatlow, head of NPD at Wright's, points out: “As consumers look for cost-effective ways to treat themselves and socialise, we’ll see people trading down from restaurants to more affordable sandwich and bakery outlets, coffee shops, cafes and dessert parlours. All are key areas for baked foods and with these outlets forecast to grow at an even faster rate than the wider market, there are plenty of opportunities in bakery.” 


Marketing manager at British Bakels, Michael Schofield, makes a similar observation:

“Having less cash available for discretionary spending is likely to mean people prioritising weekend treats rather than weekday ones in the out-of-home market.” In other words, when evening dinners out become too expensive, a Saturday morning pastry and coffee seems to be a cheaper alternative to quench the need for that weekend treat. 


Digital media


Social media and other forms of digital media drive sales in all sectors, including the bakery industry.


“Social media plays a key role in shaping consumer perceptions and expectations of bakery products. It can both influence and amplify trends, generate excitement around specific products or flavours, and contribute to the overall image of businesses. There’s a real opportunity for bakers to utilise social media to showcase their offerings, engage with consumers, and gain insights into their preference, all of which can positively impact brand awareness, perception, and reach,” said Philippa Knight, marketing director at Puratos UK.


A particular trend in the bakery industry is pimped-out pastries — think the viral cube croissant or the spiral stuffed pastry and other camera-happy baked goods. The social media presence and viral potential of these products have driven sales and redefined the coffee shop standard from a simple cinnamon swirl to a showstopper. 


Read the full report from British Baker here.

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