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Traditional Bread Sales Falling as Gluten-free Sales Rise

Celiac.com 06/01/2012 - Even as gluten-free bread continue to rise, sales of traditional wheat-based bread are falling across the globe.

Photo: CC--rprataAccording to Paul Hetherington, a 20 year veteran of the Baking Association of Canada, the plunge is driven by numerous factors, including recent dietary shifts away from wheat and toward gluten-free diets by people who are not adverse to gluten.

One example, major Canadian baked goods manufacturer, Maple Leaf Foods Inc., recently reported first quarter adjusted earnings of just 11¢ per share, down from 18¢ last year, and well below the 16.8¢ predicted by analysts.

Maple Leaf president and CEO, Michael McCain, says that the decline was due to a 73% drop in adjusted first quarter earnings by the company's Bakery Products Group, which fell from $12.2-million in 2011 to $3.3-million this year.

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McCain said that his company is experiencing a fate shared across the industry as “fundamental bread consumption is down.”

Maple Leaf’s net earnings decreased to $800,000 compared with $10.5 million last year, as the company’s adjusted operated earnings dropped 20% to $40.5 million.

To counter the trend, Maple Leaf plans marketing initiatives to grow sales and to focus on the health benefits of bread and target growth categories, such as English muffins and bagels, he said. The company also expects to benefit from lower commodity costs, including wheat, to improve margins later in the year.

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5 Responses:

 
Rick
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said this on
02 Jun 2012 11:28:24 AM PDT
Funny, so instead of changing to meet market demand, as more customers shift away from wheat based breads, Maple Leaf is going to double down on wheat and increase advertising expenses. Brilliant strategy. Usually this kind of short sightedness is only found in Wall Street beholden US companies.

 
dappycharlie
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said this on
04 Jun 2012 2:56:07 PM PDT
Bravo. Nail on the proverbial head !!!

 
phil
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said this on
04 Jun 2012 3:17:53 PM PDT
Could it be that folks are buying from smaller, local bakeries because of the better product instead of conglomerates like Maple Leaf. Even if it means buying less?

 
Stu
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said this on
05 Jun 2012 12:25:37 PM PDT
Being gluten intolerant myself, I welcome the growing popularity of gluten-free products even if it's only a forced byproduct of the latest diet fad. That being said, I agree with Rick. Corporate merchandising philosophy isn't about selling whatever product the customer wants, but about making the customer *want* whatever product you sell. Big Pharma is a great example of this, with TV ads for the latest Happy Pill causally warning of "possible DEATH" as nothing more than a potential "side effect", far outweighed by the benefits of using their latest product.
In time, the "fad" aspect of a gluten-free diet will wane, but expect the population of people who discover their own hidden gluten intolerance in the meantime to increase dramatically. This is very bad news for businesses like Maple Leaf.

 
seante
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said this on
08 Jun 2012 8:12:08 PM PDT
As more and more are being diagnosed with celiac disease, if they dont change their ways, it's gonna be buh bye maple leaf.




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