Gardenia to sell low-priced bread loaf Luzon-wide

MANILA, Philippines – To serve more Filipinos, Gardenia Bakeries Philippines Incorporated (GBPI) is entering the low-end market via a new line – Neubake.

GBPI President and General Manager Simplicio Umali Jr said the P1-billion ($22.62 million) investment in the new line is not only to hike the capacity of its premium Gardenia bread line, but to also enable the company to convert one of its 3 existing lines to produce Neubake, a low-priced bread loaf to be distributed all over Luzon.

GBPI currently produces Neubake, which accounts for only 5% of the loaf bread market, but  it is only available in Metro Manila and key cities. It sells for P36 ($0.81) per 450-gram loaf.

The Gardenia 600-gram loaf sells at P62 ($1.40).

Neubake is also set to be cheaper than the Pinoy Tasty, a generic bread subsidized by big bakers sold at P36.50 ($0.83) per 450-gram bag.

Pinoy Tasty accounts for 10% of the market.

Bread nation

“We have to make Neubake grow. Some people just want simple bread,” Umali said.

Unlike the premium Gardenia bread, Neubake has less flavor enhancers.

Umali added that bread consumption in the Philippines is growing. In the first quarter alone, volume rose 4% to 8% on top of the volume increase of 2.8% in 2014.

Last year, the value of bread sold rose by 2.45%

“This means the increase in volume is mainly from the lower end of the market,” Umali said.

Gardenia’s Neubake will be able to supply 35% of the existing market.

Gardenia now accounts for about half of the P8-billion ($180.93 million) branded packaged bread market. – Rappler.com

$1 = P44.26