Summary of functional bread and bakery products market
- Following news of a potential Hovis and Kingsmill merger, bread is back in the spotlight
- The market for bread with functional health is thriving
- As well as functionality, clean label bakery products are also seeing demand
- Sourdough in particular still retains its popularity
- However, sliced bread has seen a downturn in the UK
Rumour has it that British bakeries Hovis and Kingsmill could merge. The two bread-making giants have both been market staples for decades, and their union could change the bread market substantially.
The market for bread and bakery products, however, is moving towards health and functionality, tapping into the all-encompassing trend for healthier products.
Functional health and bakery
Functional bakery ingredients are on the rise, according to Grand View Research, with the market expected to grow at a CAGR of 6.9% from 2025 to 2030. Consumers are increasingly interested in products with health benefits.
Ingredients that provide enrichment for bakery products are on the up, particularly in countries with ageing populations. Fortified bakery snacks targeting specific groups, such as athletes and children, are also popular.
Nutritional fortification was the largest segment of functional bakery products in 2024, in part due to growing awareness of vitamin and mineral deficiencies such as iron. Many consumers see bakery products as a convenient way to get such nutrients.
Furthermore, the free-from bakery market has been boosted by the rise of allergens among consumers. Demand for gluten and dairy-free products is growing.
Along with health and functionality, demand for clean label products is also on the up among consumers. This is giving rise to an increase in demand for encapsulated ingredients, which can provide some of the benefits of additives without the need for them.
The rise and rise of sourdough
The rise of sourdough is not new. Growing sourdough starters was one of the biggest trends of the past five years, its pre-eminence as a COVID-19 lockdown hobby being such that it became almost a cliche.
Yet the bakery staple remains a consumer favourite, in part because of heightened interest in health and functionality.
Grand View Research reports that the beloved bread is still growing in popularity, particularly in Germany, because it is valued for its functional benefits.
Sourdough is often considered a gut-friendly bread, and the fermentation process with which it is cooked can improve bioavailability for the product’s vitamins and minerals.
To be considered proper sourdough, bakers suggest, no additives or raising agents should be added. Products that do not adhere to this rule are often accused of being “sourfaux”.
Thus, genuine sourdough could make a claim of tapping into the trend for clean-label products as well.
Is sliced bread declining in the UK?
Sliced bread has, historically, been so popular that the phrase “best thing since sliced bread” was coined to describe ideas that had the potential to be useful, practical or innovative.
Nevertheless, it is now on the decline, reports the Grocer, with major manufacturers facing tough sales and consumers seeking more variety in bakery.
Perceived as an ultra-processed food, it is being shunned by some consumers in favour of healthier, more functional foods and ingredients, as well as other bakery products like flatbreads and bagels.
A recent FoodNavigator survey found that sliced bread often contains more additives than plant-based meat.
