Craft bakeries in Northern Ireland urged to seek growth in Britain

Oct 04, 2007

Consumers in Great Britain and the Republic of Ireland could soon be able to taste the quality of authentic, hand-made bakery and confectionery goods from Northern Ireland’s artisan bakers.

A major market report, commissioned by Invest Northern Ireland, has pinpointed opportunities for smaller bakeries developing in Britain and Ireland from the growing demand for indulgent, premium products that offer different taste experiences.

Invest NI has pledged a range of business development and marketing support to bakeries specialising in confectionery goods such as cakes, biscuits and buns, who wish to explore such export opportunities.

The report’s findings were detailed to bakeries attending special workshops organised this week in Belfast, Dungannon and Maghera. It highlights the rich heritage of local craft bakery products not readily available in other parts of the British Isles.  Some of the bakeries, the report points out, are already supplying to multiple retailers, including Tesco, Sainsbury and Asda, in Northern Ireland and should explore ‘own label’ opportunities. A number have already developed good business in the Irish Republic.

The report highlighted that as well as heritage, tradition and provenance, the small size of craft bakeries in Northern Ireland means they are “nimble and quick to respond” to market opportunities.

Another aspect of this strength is the ability to change product ranges quickly to renew interest. Small size also means that key customers, such as retail buyers, are able to deal directly with managing directors or owner-managers, enabling decisions to be taken quickly and implemented rapidly. In addition, several bakeries have demonstrated a commitment to innovation by developing new products including gluten-free and low GI.

Among opportunities pinpointed by the study is foodservices and in particular the growing demand in the ‘coffee culture’ sector for different cakes and other hand-made confectionery goods.

As well as opportunities, the report highlights a number of challenges facing bakeries seeking to develop business outside Northern Ireland. These include a lack of market knowledge, low levels of automation which led to an inability to handle volume business and a dependence on products with a short shelf life. Few companies have the facilities to supply frozen product and thereby to overcome shelf life issues, particularly in the foodservice sector, when targeting Great Britain in particular and the Republic of Ireland.

It urges more bakeries to work towards British Retail Consortium (BRC) accreditation as a minimum requirement for own-label supply into the retail multiples, a segment showing strong growth in both Great Britain and the Republic of Ireland.

Separation from Great Britain means that central distribution is essential for effective penetration of the foodservice market.

Maynard Mawhinney, Invest NI’s Director of Food, commenting on the report, says: “Market research has identified significant growth opportunities for companies prepared to take the steps necessary to compete in the GB and ROI markets. In the UK, according to Mintel’s “Cakes and Cake Bars – UK” report of June 2006, the sector will grow by an estimated 11 per cent to 2011. Furthermore, Datamonitor figures show that, in the UK, total expenditure per head on cakes and pastries has increased from £18.70 in 1999 to £19.30 in 2004.

“By seeking growth outside Northern Ireland and expanding their markets, the bakeries could help counter business threats that are developing from higher raw material and energy costs. Such costs cannot readily be passed on to customers because of the competitive environment in which they are operating. Invest NI is ready to help bakeries to develop strategies and implement measures that will enable them to bid for new export business.”

Developing trends in customer consumption, including a decline in frequency of purchase were identified as another challenge. While consumers are eating fewer bakery/confectionery products, they are prepared to pay for premium or indulgent products. Bakeries must also take account of healthy eating and convenience trends.

The report concludes: “Despite an increased awareness of the healthy eating agenda, based on the outputs of our primary and secondary research, we believe that bakery confectionery products will continue to be consumed, particularly by individuals purchasing a ‘treat’ for themselves, their families or their children.

“Opportunities do exist in both Great Britain and the Republic of Ireland markets, evidenced by the successes that some Northern Ireland companies have already had in these markets; these opportunities are likely to continue to exist and develop, given the positive growth rates forecast by analysts such as Mintel and Datamonitor and the trends towards indulgence and provenance that mesh well with the traditional nature of the Northern Ireland product range.”

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