Bread gets sliced-up

Speaking at last month's Federation of Bakers annual conference as news emerged about the sale of failed plant baker Rathbones Bakeries, Wilkinson suggested part of that company's problems could be attributed to inadequate skills and poor management. "I doubt Rathbones could put their hand on their heart and say otherwise," said Wilkinson. "The plant bread industry is categorised by the weakest not the best and we are not owning up to the reasons why."

But, while own-label plant bakers such as Rathbones, which supply bread to the likes of Morrison and Tesco, have been having a torrid time others, such as Warburtons, have achieved considerable success by following the added value, branded route and launching new products tailored to changing consumer demand away from bog standard white loaves to speciality breads.

Administrator KPMG Corporate Recovery first sold Rathbones Bakeries' factories at Wigan, Wakefield and Middlesbrough early last month in a reported £15.5m deal to Rathbone Kear, a new company owned by Morrison. It then sold the remaining factories at Walsall, Leicester and Peterborough, trading under the Harvestime and Fresha Bakeries names, as well as a distribution centre in Carlisle -- which suffered a fire in February -- for an unknown sum to a new company, Harvestime (2005), set up by two former directors John Bridson and Phil Taylor. Both deals provided a lifeline for over 1,400 jobs -- 400 in the first and 1,000 in the second.

However, overcapacity in the plant baking sector -- which some put as high as 10% -- remains an unresolved issue. And while complaints of below cost selling of bread by retailers are more muted these days, the industry will never gain a stronger negotiating position until supply and demand are more closely in balance.

Further challenges

More recently bakers have also had the problem of some consumers moving away from bread as they adopted various low carb diets. While the threat from the Atkins diet may have peaked, if consumers buy into low glycaemic index diets -- as is being widely predicted -- then standard white bread could be in for a further bashing.

There are also concerns about moves to a traffic light food sign posting scheme, which would result in most bread falling within the 'amber' category.

While the Food Standards Agency (FSA) has yet to report back on its preference from the various options under consideration, Tesco's recent decision to abandon plans for traffic lights in favour of guideline daily amounts (GDAs), as advocated by the Food and Drink Federation, will provide some relief.

And then there is the salt issue. Plant bakers have made big strides in reducing the salt content of bread over recent years and have even won the recognition of the Food Standards Agency (FSA) and organisations such as the National Consumer Council (NCC) for their achievements. But the FSA and others still want further reductions, and this is causing some concern in the industry on issues of consumer taste and shelf-life.

"The 5% reduction by the bread industry is important and we would like to see further reduction," says NCC chief executive Ed Mayo.

Inevitably new challenges will face plant bakers in the years ahead, to join those that remain unresolved. The question is: 'Is the industry up to meeting those challenges?'

Not everyone is yet convinced.

"A lot of skills in food are generic," says Wilkinson. "The objective is to build a UK baking industry populated by a highly skilled workforce." FM

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