Authentic, affordable luxury sells

David Wagstaff, the managing director of St Pierre Groupe, discusses how the cost-of-living crisis is impacting the industry. He also talks about emerging trends, new products and advice to stay one step ahead in FMCG.

+Catalina Mihu: St Pierre entered a distribution agreement with ASDA in 2022, for three brioche ranges. Why were the Brioche Burger Buns, Seeded Brioche Burger Buns and Brioche Hot Dog Rolls selected to be sold at ASDA supermarkets?

David Wagstaff: The past few years have driven real shifts in consumer behavior and increased desire for premium, restaurant-quality products that can elevate at-home dishes. As such, ASDA and other major multiple grocers increasingly recognize the need to engage shoppers – and drive revenue – by ensuring their bakery department offers something ‘magnifique’. These are currently three of our biggest ranges and are enjoying growing distribution and sales in both grocery and convenience, with sales up by more than 100% compared with last year’s values and a 48% share of the brioche market, outpacing the growth of the category, which is up by 34% 1

In the last six months, the brand has secured increased distribution on its core and morning goods ranges with Tesco, Sainsbury’s, ASDA and Morrisons.

The first half of this year has proven busy for the brand in UK retail, as we steadily introduced innovative merchandising solutions, successful in the US, where St Pierre is the leading brioche brand, to UK supermarkets.

In January 2023, ASDA installed branded bays into 100 of its superstore formats, adding listings for St Pierre’s Mini Brioche Buns, Brioche Bagels, Brioche Baguettes, Brioche Loaf and Vanilla Brioche Tear & Share.

Then, in Q2 this year Morrisons followed suit, adopting new display solutions with our Eiffel Tower racks. St Pierre’s striking

Eiffel Tower displays are now driving footfall to the bakery aisle of 300 stores across the UK, with plans for further stores to introduce them in the coming weeks. After six weeks of testing, early results demonstrate that stores with the Eiffel Tower racks have seen a volume uplift of 31% 2

The branded bays and Eiffel Towers have already created significant uplift in sales for the brand but are also helping drive footfall to the category – assisting retailers in increasing basket spend. Shopper data from Tesco and ASDA shows that we are over-indexing with higher-value shoppers and we know that we are delivering category growth for our retail customers.

St Pierre is all about the experience – we prioritize the quality of our authentic products in order to deliver a brilliant experience with the brand. That experience starts in store and, through the consistent quality of our products, continues at home.

Mihu: Which consumers are you targeting with each of the three brioche ranges?

Wagstaff: St Pierre is all about affordable luxury. Our target consumer base is broad thanks to a diverse product range that caters to all meal occasions. This versatility attracts everyone, from family shoppers to young professionals and empty nesters. We have seen, though, that we are bringing higher-value shoppers to the fixture for UK retailers.

David Wagstaff is the managing director of St Pierre Groupe. He previously held high-profile commercial and management roles with some of the world’s biggest food brands. He had been running the US operation of St Pierre Groupe for two years before taking on the role of managing director in December 2022. The St Pierre Groupe portfolio includes the St Pierre, Baker Street and Paul Hollywood ready-to-bake brands and is headquartered in Manchester. The company also has offices in Ohio, US. The business joined the Grupo Bimbo family in October 2022.

St Pierre’s Brioche Bun and Hot Dog Roll sales continue to increase – and that growth isn’t just driven by people eating burgers. We know that consumers are enjoying our products for breakfast, lunch and dinner, because we are offering an affordable luxury. Despite recent challenges, consumers are still opting for quality products from trusted brands like St Pierre, to treat themselves at home. What happens when consumers ‘feel the pinch’, is not that they spend less money necessarily, but that they become more discerning with where and how they spend that money. That means that brands and suppliers offering quality goods have an opportunity.

The financial difference for consumers between buying ‘good’ or ‘best’ is marginal – therefore, shoppers are more likely to opt for the better quality, or premium offering in a low-value category. It’s different if you’re talking about cars or high-value purchases, but everyday grocery brands are subject to a different purchase journey – and knowledgeable brands – and retailers – should be ready to highlight quality goods to shoppers.

This also creates an opportunity for St Pierre specifically. Because we win out in independent hall tests on taste, texture and flavor, along with the versatility of our core items, we understand that driving trial is key. Whilst inflation might create a more risk averse consumer, perceived quality and multi usage is so important. Inflation is being felt across the board, in every sector. There will be two camps of shoppers, those who spend a little extra knowing they’re getting a better-quality product and become brand loyal; and those who don’t spend the extra, but consequently don’t have an experience that keeps them coming back. With St Pierre, retailers – and their customers – can make sure they have that positive experience every time.

Mihu: St Pierre products are now present in all of the UK’s top supermarkets. What is the distribution strategy for each of the chains (Tesco, Sainsbury’s, Morrisons and ASDA)?

Wagstaff: We are experiencing phenomenal growth in the top UK supermarkets, and that has stemmed from our core range of grilling season products – they were the first to be listed in the big four multiples. Our focus now is on driving the depth of distribution, making sure we are present across the full estate of the big four, and on broadening the range available through each of the major multiples. Our breakfast goods and recent listings there are a great example of how we are doing that. And as we’ve done that, we’re able to drive brand presence too, with the major UK supermarkets now trialing branded bays and our innovative Eiffel Tower displays.

Just in: St Pierre Brioche Bagels

Mihu: What are some of the most requested ranges and what new offerings have been introduced?

Wagstaff: One major new offering we recently introduced was St Pierre Brioche Bagels. These were launched in America first and were a product of many years of development. Bagels are an American staple and elevating and bringing some French flair to an American classic is a formula that has worked well for us so far, to make St Pierre the leading brioche brand in America. Equally, in the UK, breakfast is a booming market, with Brits eating an extra half a billion breakfasts in recent years 3 and consumption of breakfast staples like eggs and bacon on the up. 4 The appeal of a bagel is two-fold though; increasingly part of the UK bakery repertoire, bagels are on the rise and used more and more for lunchtime occasions too. We can help to further drive that growth through innovation and by offering a different experience, again tapping into multiple meal occasions. We have a unique proposition with our soft brioche bagel, that offers something different while combining two growing markets.

At St Pierre Groupe, any new product development is born of research and insight that demonstrates our products will meet consumer demand. In the US, we have a pipeline of new products to introduce over the next few months. Often, we see US trends cross the pond to the UK. If that happens, we’ll be in a strong position to meet consumer demand here with a product range that is ahead of the curve. That was certainly the case with our Brioche Bagels. We have launched a number of other new products in the UK over the past 12 months, including a new vegan range of morning goods under the St Pierre brand, and so now, rather than focusing on new products, we are looking at pack sizes and how best to cater to changing consumer habits.

Mihu: The burger bun and hot dog category reached GBP 38 million (180% growth) in the last two years. How was this growth achieved?

Wagstaff: St Pierre is driving category growth by 39% by bringing higher-value shoppers into the store and encouraging premiumization in the bakery category. Our growth is down to our stellar team who continue to listen to consumer feedback, share insight with our partners and then deliver products to meet needs.

Grupo Bimbo acquisition

Mihu: What are the biggest changes since Grupo Bimbo acquired St Pierre Groupe? And what remains unchanged?

Wagstaff: Grupo Bimbo’s acquisition of St Pierre Groupe presents us with a fantastic opportunity to further our brands, globally. As part of the world’s biggest bakery business, we now have access to incredible resources and insight. The opportunity, particularly in America, is still phenomenal. We are steadily increasing distribution, but the market is huge, and so the potential for growth is unmatched. Our entrepreneurial spirit and our drive remains unchanged, and we continue to operate as an independent business, but with the impressive backing of Grupo Bimbo. It’s a very exciting time for St Pierre and our business.

Mihu: In light of the recent takeover, what are some of St Pierre’s priorities for 2023 and beyond? How do they vary on your main markets?

Wagstaff: We continue to operate as St Pierre Groupe, so our strategy and approach remain as they were. Our focus is on both grasping the opportunity in America and developing our business with our customers in the UK. As part of Grupo Bimbo, our exploration of new markets may accelerate, but the focus remains the same. We continue to push in the markets in which we already lead and maximize brand presence.

Mihu: What was the impact of the disruptions caused by the COVID-19 pandemic and by Brexit?

Wagstaff: The past few years have been challenging for the industry across the board. Rising costs of ingredients, production and freight, matched by labor shortages have meant bakery businesses have faced strong headwinds.

However, St Pierre has continued to face these challenges head-on, grow and assign resources to prepare for future trials. Throughout the last 12 months, we have invested heavily in our US and UK supply chain to ensure we continue to serve our customers at the impeccable level for which we are known.

The other challenge the industry needs to address is the cost-of-living crisis. We are seeing the impact of inflation in both the UK and the US – and while it means that for many, purse strings will be tightened as costs continue to rise, there is an opportunity for brands like ours.

Now is a great time for retailers to lean into premium brands like St Pierre – with the understanding of what ‘premium’ means for shoppers – beyond price point. For consumers, the trend for premiumization is here to stay. During the pandemic, shoppers were elevating their meals at home because they couldn’t travel or dine out. Now that the cost of living is on the up, consumers are still looking to treat themselves at home. Preparing and consuming better-quality foods along with entertaining guests at home is once again becoming more convenient and cost-effective than dining out. Elevated meals and quality products like St Pierre brioche, which save shoppers time and provide an easy solution for quality entertaining at home, are doing well throughout the store.

Mihu: How is sustainability addressed and communicated at St Pierre?

Wagstaff: We face two sustainability challenges at St Pierre Groupe: food waste and plastic-based packaging. Food waste is a huge challenge, and it’s increasingly being addressed both by the industry and by consumers at home, who are more aware than ever before of the impact food waste has on climate change. Bakery goods are more likely than any other household food item to be thrown away.

St Pierre Groupe believes in making bakery magnifique –and as part of that mission, we are ensuring that our products do not go to waste.

That’s why all of our products benefit from extended life, helping to reduce waste from the moment they are produced. Beyond that, the business is committed to donating products regularly to food banks via charity partners, to ensure that our products are never wasted. We work with a number of charities, both in the UK and the US, and our partnerships are mostly organic, driven either by our team, or because they have a direct link to our business. We review our charity partnerships regularly, to ensure their objectives align with our own, either on an international, national, or regional basis. Any product not suitable not suitable for charitable donations is donated for animal feed wherever possible.

The other challenge we face is plastic-based packaging. Part of what allows St Pierre Groupe products to maintain shelf life and reduce food waste is the plastic packaging in which they are sold. Of course, as a business, we recognize that there is work to be done in reducing reliance on plastic packaging. Moreover, we are committed to exploring greener alternatives where such solutions do not compromise product quality.

As a result, we are committed to an annual review of all our packaging, in order to reduce our impact. In 2021, we removed unnecessary plastic from two of our core ranges saving almost 4 tonnes of plastic. The annual review from 2022 has been carried out and, as part of our commitment to action and transparency, the results are published on our corporate site. We know that our shoppers care that we are taking steps to counteract our impact on the planet and what’s important to consumers is of primary importance to our business.

New product development: trend spotting and social listening

Mihu: How are the special occasion recipes developed?

Wagstaff: At St Pierre Groupe, our recipe development starts with a mixture of trend spotting and social listening, allowing us the opportunity to put our products into multiple meal occasions. We look at the ‘demand moments’ rather than the product – what are people looking for, and then how do our products satisfy the need? We invest a huge amount in research and insight so that we can be helpful to our customers, and we take notes on what the competition is doing. The sector is dynamic and we are leading the way, trying new things, and working in partnership with our customers to get the best results.

”St Pierre’s Brioche Bun and Hot Dog Roll sales continue to increase – and that growth isn’t just driven by people eating burgers. We know that consumers are enjoying our products for breakfast, lunch and dinner, because we are offering an affordable luxury.”

David

Director,

Mihu: What new territories could hold potential for further market expansion?

Wagstaff: As I previously mentioned, the opportunity for St Pierre in America is still phenomenal – we are increasing our depth of distribution, but the market is huge, and so the potential for growth is unmatched. Our focus remains on maximizing opportunity in our existing markets for the time being. As part of Grupo Bimbo, our exploration of new markets may accelerate and with Grupo Bimbo’s backing, we’re in a strong position to fulfill new market demands. We have ambitious growth targets and an entrepreneurial approach to meeting them, so it’s an exciting time for the business.

Mihu: What are the main differences between doing business in European markets vs. the US, from St Pierre’s perspective?

Wagstaff: American consumers are used to a sweeter flavor profile in baked goods, but European consumers have greater knowledge of what brioche is. Delivering bakery staples like burger buns and hot dog rolls has helped with the US education piece around brioche, how it differs and how to use it. It’s a little easier in the European market, because shoppers are more likely to understand brioche, but it is perhaps a ‘bigger leap’ to switch to a sweeter flavour profile than it is for American shoppers. So long as our commitment to quality is consistent, we will continue to make bakery ‘magnifique’, wherever we supply our products. +++