European Bakery Trends

ASB Conference Melbourne, 14th

April 2010

Overview

• Who are we?

• Facts & figures from Europe

• Bakery trends in Europe

Overview

• Who are we?

• Facts & figures from Europe

• Bakery trends in Europe

Our Mission

Puratos aims to help

bakers, patissiers and chocolatiers

around the world

to be successful with their business

Puratos at a glance

• 90 years of experience in bakery and patisserie

• Over 50 years of mastering bread improvement technology

• 84 companies spread over 56 countries

• 53 plants in 39 countries

• 5,000 employees

• 1 billion EUR turnover

Facts & figures

Puratos in the world

Headquarters

Production subsidiary

Commercial subsidiary

Distributors

Direct sales

Bakery technology

IMPROVERS - MIXES

– O’Tentic - …POWDER / PASTE / LIQUID

Emulsifiers Enzymes Bread flavours Hydrocolloids

Overview

• Who are we?

• Facts & figures from Europe

• Bakery trends in Europe

We are not talking about biscuits and

cereals today!

BreadBread

Fresh breadIndustrial prepacked

long life bread

Industrial prepacked

part-baked bread

Consumer

products

What do we mean by "bakery"?

Gira uses the more precise term "BVP" to cover all bakery products - that relates ONLY to the following products:

• Bread

• Viennoiserie

• Patisserie

Differentiation by product and production method

"Artisanal"

Made from scratch

on the premises

"Industrial"

Bought fresh from

industrial bakersBake-off

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0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

Germ

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Fra

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Italy

Pola

nd

Spain

United K

ingdom

Rom

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Czech R

epublic

Neth

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Hungary

Gre

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Bulg

aria

Port

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Belg

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Austr

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Slo

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Sw

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Denm

ark

Lithuania

Irela

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Fin

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Latv

ia

Slo

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Cypru

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('000t)

Per capita consumption (kg/year)

Source: Gira

xx

The EU-27: 39 million tons and EUR 120 bn in

2008

Total BVP Consumption, 2008

Overall, consumption

should grow by an average of just

0.3% pa until 2013

Romanians and Czechs eat mostBVP

Germany and France rank first in BVP consumption

The UK eats the least

Bread and fresh products dominate consumption

BVP consumption volumes

by product, 2008

BVP consumption volumes

by technology, 2008

Bread and fresh BVP consumption should remain stable through 2013 viennoiserie and patisserie will show higher growth rates as well as prepacked products

Modern retailers dominate BVP distribution channels

BVP Distribution Channels, EU-27 - by volume, 2008

but the artisan segment has resisted well in many countries

and the importance of catering grows

Artisan bakers will continue to sufferfrom modern retailers

Volumes and growth by distribution circuit – EU-15 & NMS-12, 2008/2013

-5,0%

-2,5%

0,0%

2,5%

5,0%

0 2 000 4 000 6 000 8 000 10 000 12 000 14 000

% v

olu

me

gro

wth

pa

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Source: Gira Market volume 2008 ('000t)

EU-15 Catering

NMS Catering

EU-15 Artisan

NMS Artisan

EU-15 RetailersNMS Retailers

EU-15 Chains

NMS Chains

BVP production methods per country

BVP Production Methods: Craft versus Industrial

Bake-off will more than compensate for the decline in craft production

Growth in BVP Production Methods, EU-15 & New Member States-12

2008/2013

Artisan bakers

Artisan bakers

Prepacked

PrepackedRetailers

in-storeRetailers

in-store

Bake-off

Bake-off

Fresh

finished

Fresh

finished -800

-400

0

400

800

1 200

2008-2

013 g

row

th (

000t)

EU-15 NMS- 12

Source: Gira

Overview

• Who are we?

• Facts & figures from Europe

• Bakery trends in Europe

Our vision

“We believe that people will attach more and more importance to

the quality of their food in the future.”

Health

Wholegrain

Digestive Health

Free From

Low Fat

Salt Reduction

Wholegrain

USDA Nutrient Database, release 2007

Less Energy

5x more Fiber

More Protein

More Minerals

More Vitamins

More Antioxidants

REFINED UNREFINED

Whole Grains and Fiber Take 3 of Top 6 Spots

Consumer survey, 2007 (IFIC)“name a specific food or component with health benefits”

2007 Consumer Attitudes toward Functional Foods / Foods for Health. International Food Information Council, October 2007

1. Fruits and vegetables2. Fish, fish oil, seafood3. Milk4. Whole Grains5. Fiber6. Oats, oat bran, oatmeal

CVDIntestinalHealth

But, Whole Grain consumption is Low!

www.healthgrain.org

No whole grain foods at all!1/3 of Adults

27% of children

9/10 Americans ≠ RDI

Avg. Intake = 14g fiber/day

Scandinavians eat more whole grain compared to USA and UK

1/3 of Adults 27% of children

9/10 Americans ≠ RDI

Avg. Intake = 14g fiber/day

Wholegrain Bakery Products

Consumers choose “natural” Minimal processing

Wholegrain is a natural choice

Digestive Health

• Deaths from diseases of the digestive system in 2008

More digestive diseases in male population than in

female population, while digestive health products

have been targeting the female population so far

Source: Euromonitor

Prebiotics & Probiotics

• The use of prebiotics is in its infancy in most countries, but this is

likely to grow along with the rising awareness of their potential health

benefits.

• Probiotic started in the Yoghurt market and now is moving in different

sectors

Source: Innova, New Nutrition Business

Free from

• Move toward more “gluten-free” and other “free-from

products”• Major players interested and focused more on taste and

quality of these products

• High-quality brands are emerging positioned as “easy to digest,” “easy on the stomach” or “mild.”

Milk

Eggs

Fish

Soy

Shellfish

Wheat

Peanuts

Tree Nuts

24 million people suffering from Celiac

• Estimated, one in every 250 people suffering from Celiac disease

worldwide, though it often goes highly undiagnosed.

• On the other hand, number of launches is much higher considering

number of people actually suffering from food intolerance diseases:

• Consumer fidelity toward the whole brand

• Consumers positive perception of “free froms”

Low Fat

• The Global Obesity Epidemic is leading to a growth in the slimming

and low fat products market.

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Obesity Rates (BMI>30)

2003 2008

Source: Euromonitor

Low Fat

• Growth in the number of low fat

product launches.

• Increasing consumer awareness

on weight issues.

United States: Mission Whole Wheat Flour Tortillas. Premium

quality. Heart healthy. 96% fat

free. With added omega-3 fatty

acids. 0g trans fat. No lard. No cholesterol.

Source: Innova, New Nutrition Business

Italy – milk breads: A new line of

soft bread snack with reduced

content of fats (less than 80%). A

balanced aliment for all the family,

particularly for students. Enriched

with vitamins and calcium

Puratos - Puraslim

Puraslim is a smart alternative for traditional margarine, butter, oil & shortening in rich bread & cake applications. It allows improving the nutritional values of breads and cakes by

reducing the fat levels while being cost competitive with traditional

fats and being in line with consumers’ expectations.

Data from European Nutrition Health Report 2009

Salt reduction

• Recommended sodium intake: 2,4 g/day

Contribution of salt to our diets

Cereals & Cereal

products (bread, cakes,

pastries)38%

Meat & Meat products

21%

Other (soups, pickles, sauces)

13%

Processed Vegetables

9%

Milk & Cream5%

Fats & Oils5%

Cheese4%

Fish3%

Eggs1%

Fresh Vegetables1%

Fruit0%

Main sources of Sodium from foods

Launches in low sodium bakery products

Salt Reduction

Portugal: Dan Cake Tostas de Luxo Baixo Teor de Sal: Premium Whole Wheat Toasts. Source of fiber.

Low-salt. No sugar added. No cholesterol.

Italy: Grissini Iposodici: Low Sodium Breadsticks.Very low sodium content.

• Salt Reduction As a High Priority For Health is becoming

more and more popular among health conscious consumers.

Source: Innova

Netherlands: Traditional recipe, as

bread is meant to be. Deliciously fresh, tasty bread with a crispy

crust. Skilfully made according to

old traditions without additives,

only for Jumbo. Crispy crust, less salt, no E additives..

PuratosSapore Nabucco

A natural sourdough for salt reduction

• A ready to use sourdough

• Nabucco is a natural sourdough that enhances

salty flavour.

• Consumers have confirmed the great taste; the

majority of consumer taste panels cannot taste the

difference.

• It can be used in a wide range of bakery products.

Convenience

Time-saving

Individual Packaging

Simplicity

Convenience trends in W-Europe

Time-saving

• Changing lifestyles have tended to limit bread buying occasions to the

weekends, favoring packaged/industrial bread, which tends to stay fresh

longer”. (Euromonitor 2008)

Longer shelf lives are also interesting

for waste reduction:

• Bread waste levels of 17% post

bakery, have led to a cooperation

between WRAP & Premier Foods to

discover why consumers throw away

bread. (Bakery and Snacks – 2009)

Time-saving trend leads to longer ShelfLives

Convenient Packaging

Saving space & packaging

Single serving

Easy opening of

airtight fresh packs

Increased use of simplicity

• The downturn is making people nostalgic for simpler times,

and simpler foods. The interest in “back to basics” has driven interest in natural foodstuffs and less sophisticated

food labels.

Source: Innova

Consumers pay closer attention to the ingredients list

during their purchase.

Consumers are more and more concerned about what they eat

The trend comes from UK

Source: INNOVA - 2010

No additive food products UK No additive Bakery products UK

Market insights in the all natural trend

• With the recent negativity in the press associated with E

numbers, consumers have become increasingly sceptical about

exactly what is in their food.

• The consumer’s reliance on labelling has never been so important.

The “no additives/preservatives” types of claims on packagingprovide instant communication with the consumer of a better,

more “natural” choice.

• Packaging in a transparent fashion also gives the impression of food that is more natural, and has not been “tampered with” too

much.

• Short ingredient lists without additives and preservatives,

natural looking food and packaging has appeal to the E-consciousconsumer.

www.innovadatabase.com

Pleasure

Authenticity

Indulgence

Pleasure trends in W-Europe

Authenticity

• With consumers getting the chance to travel more and more It

is no longer enough to simply create a product with a regional

positioning; the product should be based on ingredients from

that region and ideally even produced there.

Italy: traditional flat breads made with a.o. lard

Source: Innova

O-tentic Origin

• O-TENTIC ORIGIN

A bread with a unique taste of the good old days. Intense and complex flavour, typical of long fermentation, with a nice acidity.

O-tentic Durum

• O-TENTIC DURUM

A bread with a typical Mediterranean

flavour profile characterized by woody

and milky notes. A unique durum flavour!

Indulgence

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Breakfast Lunch Afternoon Snack Dinner

Health Territory

Occasions where Routine, Self-

Consumption and Guilt is more likely

to take place

Indulgence Territory

Occasions where Craving, Treats &

Social activity is more likely to occur

+

Source: innova/TNS

Taste

• touch

• see80% to 90% of what we perceive as “taste” is due to the sense of smell.

Datamonitor 2007

• smell

TASTE

= the combination of the senses of

smell and touch,

which together receive a sensation

of a substance in the mouth

Source: Datamonitor

Taste

• More than 90% of the consumers think taste is the most

important purchase driver for bread

Source: “What’s your Flavour” Puratos survey

Puratos Sapore,A Broad Range of Flavours

• Sapore are flavours from around the world

• We ferment selected starter cultures and regional flour

varieties from around the globe.

• Each Sapore product reflects the trends, tastes and

traditions from their country of origin.

• Additional unique processes to create different

flavour profiles.

• Toasting, drying …..

• Sapore is built around

6 flavour profiles

Thank you for your attention