- High-end bread is getting even more upscale with single-origin loaves made with heirloom wheat, according to Bloomberg.
- La Brea Bakery’s $8-per-loaf Reserve line, which uses Fortuna wheat grown by Wheat Montana Farms & Bakery in Three Forks, Montana, has been a hit for the company. But La Brea pays roughly double the commodity price for the better-quality wheat, despite global wheat prices experiencing a multiyear slump.
- Larger bread producers usually avoid this type of specialty sourcing, as bad weather can wipe out an entire crop, leaving them with insufficient flour to meet consumer demand for artisanal loaves.
For farmers and bread companies, there's a lot to like about a hot-selling $8 loaf. But growing and sourcing all the necessary ingredients can be a headache for all parties, underscoring the trade-offs that come with selling high-end bread and other premium items.
One major issue is finding a farm like the one La Brea has tapped for its upscale line. Wheat farmers are often reluctant to enter niche agricultural markets because of the time needed to transition their crops, and because these markets can quickly become flooded with supply. La Brea worked with its Montana grower for two years to get just the right supply of Fortuna wheat.
Large food companies also typically avoid relying on a small number of farmers because bad weather or pests can either wipe out an entire crop or drastically diminish its quality. La Brea Bakery told Bloomberg they have no contingency plan if their wheat farmer has a bad year.
But despite risks like these, manufacturers continue to roll out premium products to meet consumer appetites for high-quality ingredients. Wine, yogurt, chocolate candy and beer, all of which carry strong ingredient messages, have the highest premium product share among product categories, according to IRI data published last year. Outside of grocery and natural food stores, convenience stores saw the highest premium sales in the wine and energy drinks categories, while natural cheese, yogurt and wine drove premium sales in drug stores.
As demand for premium products grows, grocers are introducing more specialty private label lines. A growing number of retailers — Southeastern Grocers and Kroger among them — have introduced tiered selections that range from value brands to premium ones. Kroger's recent lawsuit against Lidl over supposed similarities between the two grocers' premium brands highlights how important these products have become (Kroger dropped its suit in September).
Is there a limit to just how far the demand for premium products will stretch? Certainly, though retailers and manufacturers have become adept at pushing the boundaries. High-end mayonnaise was laughable a few years back, but now Sir Kensington is proving there is a market for it. As long as consumers are willing to pay more for these upscale items, manufacturers will be more than happy to meet demand.