The bread and bread roll market in Germany

Who, where, what, why, when and how – if you don’t ask you’ll never know. Little children watching “Sesame Street” already know that, and adults should also remember it occasionally even if the head-in-the-sand position is more comfortable.

According to an analysis by the AMI of the Household Panel* of the German Consumer Research Society (GfK), German citizens spent EUR 4.372bn for bread in 2013, and in return received 1.905bn kg of bread, corresponding to an average price of EUR 2.30/kg, which is a total of 6 cents more than in the previous year. In other words the average price of bread in Germany through all sales channels rose by 2.5%. On the other hand the amount purchased fell by 1.16% compared to 2012, and when this is all added together the price rise of 2.5% brought a mere 1.29% more turnover into the coffers.

© AMI Analyse des GfK Haushaltspanels

A breakdown of the figures by distribution channels shows that the various suppliers had very different degrees of success in achieving a real increase in turnover by passing on the prices. The discounters, who raised their prices by 4.2%, were able not only to increase the amount of bread sold by “only” 0.32%, but also drove up their total sales by an amazing 4.51%, which simply means that they succeeded in extending their volumes while at the same time passing on the price increases 1:1.

As a comparison, the bakeries with no checkout zone increased their prices by 1.95% but lost 1.35% of their volume, so ended up with a turnover increase of only 0.57% compared to the previous year. Although the checkout zone bakers raised their prices by only 1.24%, they lost 2.58% of their volume and thus also lost 1.37% of total turnover.

However, the bakers were not the only ones who were forced to hand over bread sales to the discounters. Conventional full-range retailers also had no success story to tell about their bread assortment. They increased prices by 1.85% but lost 2.1% of their volume and finished up with a turnover reduction of 0.29%.

© AMI Analyse des GfK Haushaltspanels

Sales of bread rolls: checkout zones in free fall
In this case the migratory movements of volumes and turnovers by the baking industry and full-range retailers are similar. Here again it was the discounters who were able to increase their prices, but nevertheless obtained an enormous increase in trade and ultimately also succeeded in gaining quite massive growth in their turnovers in the bread roll product range. Although here again the bakeries lost slightly in volume terms, they were able to more than compensate for it through increased prices. On the other hand the checkout zone bakers fared quite differently. They suffered a double-digit loss of volume and thus ultimately also of turnover, although they had also attempted a double-digit price rise. Anyone who has no exit strategy in this game won’t have to suffer much longer.

© AMI Analyse des GfK Haushaltspanels

© AMI Analyse des GfK Haushaltspanels

Finally a glance at market shares.
© AMI Analyse des GfK Haushaltspanels

© AMI Analyse des GfK Haushaltspanels

Bread rolls turnover: half belongs to the bakers
Of course in quantitative market share terms the discounter’s gains look considerably more modest. With fresh bread rolls they gained a 3.65% share of the market, mainly at the expense of the checkout zones. The bakers and full-range retailers lost a few feathers and the other shopping centers also lost one or two, and only the natural food retail held firm.

In value terms the discounters’ market share gain turns out to be even smaller. It amounts to barely 2.13%, the gains here being mainly at the expense of the checkout zones. Bakeries are still able to hold onto half of the bread roll turnover in the German Federal Republic, albeit with a slightly declining trend.

In the case of bread, the shifts in market shares in both categories are below 1%, and the pattern shown by the movements is different to that for bread rolls. In volume terms the full-range retailers have actually lost just as much as the checkout zones, and are in second place among the losers in turnover terms. Here again the development in the natural food retail obviously remains positive and completely unaffected in all cases.

*The 13,000 households who participate scan all their purchases at home. It is possible that purchases will be forgotten in this process. This affects especially purchases on the move or for the office. Therefore the stated quantities must be understood as minimum amounts.

This Country Report was researched by our baking+biscuit international“ editorial department. A collection of recent market profiles was published in the European Bakery Market Review.

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