St Pierre Groupe – the international branded bakery business with St Pierre, Baker Street and Paul Hollywood bakery brands in its portfolio – has experienced phenomenal growth over the past 12 months.
Its flagship brand, St Pierre, is quickly becoming a household name in the UK and America, whilst all of its brands have enjoyed double-digit growth in the past year. Such rapid growth and success – particularly in the UK’s major multiples – have seen its UK commercial team double its headcount.
Chris McLaughlin, Commercial Director, joined the business in 2019 to accelerate distribution across the UK. Previously, McLaughlin spent eight years as Sales & Marketing Director at All About Food and prior to that was responsible for 25 per cent of Kellogg’s’ UK business as part of the senior leadership team there. In his role as Commercial Director, McLaughlin leads a team distributing St Pierre Groupe products throughout the UK’s retail, wholesale and foodservice sectors.
McLaughlin tells Grocery Trader how the past 12 months has impacted the bakery sector, the St Pierre Groupe business and how building retailer relationships through insight has helped its brands to thrive with a post-pandemic audience.
What are the key products in your range that supermarkets should be stocking?
Since joining the business, I’ve worked hard to ensure we are clear on which products form the core range. By identifying these key products for each brand, we are able to offer retailers a range with proven potential to increase their margins. This streamlining of our product range gives our customers the best chance to sell our highest performing products – and that works for everyone.
St Pierre Brioche Burger Buns are the UK’s number one burger bun, growing at 150 per cent year on year. St Pierre Brioche Hot Dog Rolls do a similar job in offering premium upgrades to the category. Retailers can offer St Pierre products from £2 per pack and upwards, which carries huge appeal in a category that averages less than £1 per pack. The St Pierre range caters to an audience who have been elevating at-home meals throughout the pandemic and won’t now compromise on the quality they’ve become accustomed to. It’s provided great opportunity for our brand. Most recently, we launched the St Pierre Sliced Brioche Loaf – again to capitalise on the premiumisation trend. Co-Op launched the product on-shelf in April this year and secured the highest value rate of sale of any new launch in the range review.
Baker Street is vital for retailers because it offers a long-life alternative in the bakery category. As a category, bakery poses a perennial challenge for retailers in forecasting stock and reducing wastage – both problems that Baker Street offers a solution to. It’s not just retailers who benefit, either. Research shows that consumers are more open to longer life products than ever before – 68 per cent of people place importance on buying foods that help to reduce food waste and 51 per cent of consumers claimed they are more likely to purchase a product that is long-life.
The Paul Hollywood brand also benefits from extended life, but more than that it allows customers the luxury of fresh-baked bread at home. Part-baked bread is in growth, creating a sub-category worth more than £47million and the brand is driving that growth as category leader.
All three brands offer longer-life. It’s always been a feature of our brands, but we communicate it in a much more accessible way now. Consumer attitudes towards long-life are changing and retailers understand how our products can help them manage availability on-shelf and wastage, too.
What is the value of the UK bakery market?
The entire UK bakery market is now worth £5.9 billion, growing by 1.5 per cent. As part of that, the packaged bakery category value stands at £3 billion, but it’s growing faster at 2 per cent year on year. The impact of the pandemic shouldn’t be downplayed; the increase in at-home dining saw the ‘flight to carbs’. Everyone was looking for comfort food during a really uncertain time and bakery ticks that box. Everyone loves a good sandwich. It’s still the most popular meal in the UK and we all know a great sarnie starts with good bread. You then combine that with the drop in pre-packed sandwiches and people working from home driving an uplift in other parts of the category and suddenly, you have a sector thriving with new product development and a new audience to cater to. 2020 was the year that Britain fell back in love with bread.
What trends are driving the market?
Last year saw the packaged bakery category hit record levels of growth. Families were stuck at home and seemed to remember that bakery is versatile. Everyday loaves were up, but families were also introducing bread into more meal occasions – bread as a carrier, as an accompaniment, as another course, a snack or a dessert. Cooks were more creative in the kitchen and actively looking for inspiration to liven up their at-home menus.
The year ended with Bread seven per cent up, Morning Goods eight per cent and Rolls growing at 25 per cent vs 2019. Whilst sales have slowed for Bread, both Morning Goods and Rolls are still in substantial growth. As a supplier, we were prepared for growth to slow, but our product range has continued to appeal. We are actively highlighting the usability of our products for all meal occasions, and it stands us in good stead with shoppers who are more adventurous and willing to spend on quality.
What is St Pierre Groupe’s market share and how has the company been performing?
St Pierre Groupe is the fifth largest bakery supplier in the UK and the fastest growing supplier in the top 10. Whilst our share of the market is still small at under two per cent, our growth is rapid and our plans over the next few years are ambitious. St Pierre is the number one brioche brand in the UK, America, Ireland and the UAE. All of our brands are now available with at least one of the UK’s major multiple retailers and the industry is seeing what we are doing and the speed with which we are driving category growth – particularly in buns and rolls. It’s that category growth where we know we can do more than any other supplier and we are working with retailers so that they can benefit too.
What effect has Covid-19 had on the bakery market?
The immediate impact has been well-documented; lockdown was announced and stock piling ensued with Bakery category sales jumping from £50m to £70m in the first week alone. The Bakery category normally grows in line with inflation, but 2020 saw growth of +10 per cent vs 2019.
Once stock-piling slowed, new consumer habits started to emerge. Suddenly shoppers were buying for increased meal occasions – now to be eaten at home – and for versatile products that meant they could try new dishes, but also ensure trips to the store were quick and efficient. People were escaping the boredom of the pandemic and as a result, some sectors experienced incredible growth.
These included Part-Baked Bread (+56 per cent), Bagels (+24 per cent), Flatbreads (+21 per cent) and Croissants (+15 per cent).
What were previously ‘on the go’ opportunities moved into the home and whilst the repertoire of working lunches changed, breakfast was transformed. Every meal became a chance to try something new and bakery products are central to that. Equally, bread rolls saw a jump in demand growing by a quarter on 2019, whilst Burger Buns and Hot Dog Rolls emerged as key to driving growth, with a sub-category value up 50 per cent.
With bread being the most wasted household food item, how can consumers waste less bread?
Today’s consumers lead busy lives. There’s also an increase in the number of people living alone and those factors mean that food waste continues to be an issue. Whilst it’s a lot to ask of the consumer to plan and monitor their waste, we are talking about an audience who are more conscious of food waste than ever before. As brands, we need to communicate our long-life credentials clearly and retailers can also play a part in this. Merchandising solutions that help consumers to forward-plan and encourage them to buy only what they need is a great first step.
Baker Street, in particular, is designed with precisely this in mind. Not only does every Baker Street product benefit from a longer shelf-life, our range of sliced loaves come in smaller pack sizes and without a crust. Immediately, we’re removing some of the risk of any being thrown away.
How has Baker Street’s Drive Thru range of Classic Hot Dog Rolls and Original Burger Buns been performing since launching earlier this year?
So far, so good! We developed the product packaging in collaboration with retailers. The design really delivers cues of a fast-food restaurant experience, which was timed perfectly during a pandemic where people couldn’t get their usual fast-food fix.
In the 18 weeks since launching into Tesco’s main estate both products feature in the Top 25 Rolls sold. Meanwhile, the wholesale sector has seen customer numbers increase to 100,000 in the 18 weeks since launch, which is 18 per cent up on last year.
It’s a quality product and we know when we can drive trial, we can increase sales. A lot of suppliers are looking at 2019 figures for their benchmark, but we’re not. Yes, 2020 was a challenging year, but we are driving growth and will continue to do so. Our growth and collaborative approach to working with retailers means that they grow strongly and also reduce their waste.
What advice do you have for retailers on merchandising the bakery category in store?
We’re coming out of the other side of the pandemic now – hopefully – and that will bring new challenges for retailers in terms of merchandising. The shopper psyche has changed. We’ve spent almost two years trying to limit trips to the shop and when we’re there, it’s all very functional. Consumers want what they want, to find it quickly, pay and leave again. However, as attitudes adapt again, consumers will relish in the experience of shopping. Shopping will become interesting and retailers will need to merchandise to deliver an experience.
Branded propositions can help that. St Pierre, for example, helps transport shoppers to Paris with Eiffel Tower stands that have been proven to increase sales by more than 50 per cent in the US and Ireland.
My other piece of advice for retailers is about streamlining their offering. Good, better, best. Allow your customers the upgrades they’re looking for and focus on the top-sellers. The Top 10 products in any retail setting usually provide 80 per cent of sales, so don’t just give everything a single facing instore. Ensure the top-selling products have at least two facings each to keep them on sale.
Finally, I think for many, the temptation is to merchandise stores based on COVID sales, but savvy retailers will look where the growth is – and continues to come from – and pay close attention to those sectors. Morning goods and rolls are driving margin – as a retailer, it makes more sense to highlight these areas and set yourself apart from the competition with merchandising solutions driven by insight.
How do you work with retailers to improve sales?
The bakery category is fast-moving and ever-changing. We invest a huge amount in research and insight so that we can be helpful to retailers and we take notes on what the competition is doing. As a sector, it’s dynamic and we are leading the way, trying new things and working in partnership with our customers to get the best results.
Our work with Tesco is a great example of our collaborative approach. We focus on understanding seasonality, key purchase drivers and the wider objectives for the category. We take feedback on branding and packaging – the Baker Street Drive Thru range is testament to this. These are St Pierre Groupe brands, but we invite retailer input. Our customers have data and consumer insight, which we can combine with our own to harness the opportunity together. As an agile business, we have the capability to develop products quickly, but we do it with a real customer focus, which is key.
We’re also transparent with our findings. The team are in the stores every week, reporting back on trends, NPD and merchandising. We are producing independent bakery reviews that we share with our retail partners. Insight is central to everything we do, and we share that because when our customers do well, we do well.
Do you have any NPD on the horizon?
The short answer is yes – and it’s coming thick and fast. Some of what’s coming down the track is linked to pack sizes. Consumption habits have been transformed by the pandemic and this affects everything from the frequency of shopping trips to basket spend and portion size. We are looking at smaller pack size options for St Pierre Brioche Burger Buns to cater to the UK audience.
Increasingly, bagels have become a recognised part of the UK bakery repertoire – even securing a spot on last year’s Great British Bake Off. In the last 52 weeks, bagel sales have contributed £143mn to the bakery category, up nine per cent on last year.
That growth started pre-pandemic but continued throughout and new lunch ideas – prompted by lockdown – will continue as we return to ‘normal’. St Pierre is a leader in brioche and combining the two growth areas makes good sense for a consumer more open to trying new things.
NPD is also informed by usage of products. There’s a growing trend in what Americans would call ‘dinner rolls’, so we are reviewing the St Pierre product range in the UK, offering retailers an opportunity to tap into this market.
Finally, one of the key trends in FMCG is the impressive growth in vegan and plant-based foods. As a dietary choice, it’s now much more accessible thanks to great strides in NPD. A much broader base is now looking for plant-based alternatives and so we’re watching that sector with great interest.
What marketing activity do you have planned for this year?
Our next key time of year, following natural uplifts for BBQ season, occur around Halloween and bonfire season.
The two weeks covering the Halloween and Bonfire Night period in 2020 saw total burger buns and hot dog rolls sales jump from £0.9mn to £1.2mn – so clearly there is opportunity in this occasion for retailers. In the same period, St Pierre Groupe’s St Pierre and Baker Street lines in the sector increased 26 per cent compared to the previous two weeks.
As such, we are looking at how we can activate to maximise the opportunity for our brands this year – offering unique in-store marketing materials, new brand creatives and consumer-facing campaigns planned for the season.
Beyond that, we have plans to support Christmas. For Baker Street, this means an extension of the hugely successful Christmas markets range. This year, we’re adding a new Stollen Bites SKU and Stollen Cookies to make Stollen more accessible, in familiar formats, for the family audience.
St Pierre will be supporting retailers in maximising festive sales, with updated on-pack creatives and new recipe suggestions to highlight usability of the product at a key time of year. Christmas for Paul Hollywood and the part-baked category is always a key moment. We will be upweighting consumer marketing activity around Paul Hollywood from November to support sales.
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