KANSAS CITY — Tortilla and flatbread sales saw strong growth in the early stages of the coronavirus (COVID-19) pandemic as at-home cooking increased, and now that restaurants have reopened and consumers have returned to regular activities, the foodservice side has picked up.
“In 2021, restaurants came back, but not necessarily at the expense of at-home cooking,” explained Jim Kabbani, chief executive officer, Tortilla Industry Association. “What we’re seeing now is a situation where retail and at-home tortilla consumption remains strong, while foodservice has come back. And the additive result of those two trends is an overall increase in consumption.”
Total retail dollar sales for tortillas and flatbreads decreased slightly, falling 0.3% to just under $3.8 billion, according to IRI data for the 52 weeks ending Dec. 26, 2021. Tortilla sales fell 0.9% to approximately $3 billion, while flatbread sales rose 4.8% to $365 million. Most of the growth for tortillas and flatbreads was in the perimeter/fresh food area, with sales jumping 8% to roughly $256 million.
“That fresh area is only 7% of tortilla and flatbread sales, so it’s very small, but it’s growing faster than in aisle,” explained Melissa Altobelli, principal, client insights, dairy and bakery vertical, IRI. “That’s because a lot of self-serve areas are open now, and also consumers are going out and celebrating more, buying products for parties or holidays.”
Dollar sales for both categories grew in the last quarter while volume sales decreased, which Ms. Altobelli attributes to inflation. She expects this trend to continue into early 2022 before leveling out later in the year.
“Volume will probably continue to show decline due to inflation,” Ms. Altobelli said. “Higher prices mean people have to cut back, and increased consumer mobility means people are eating out more. But as we go back to restaurants and find other places to purchase these products, there will be a softening in volume decreases, too. We think by the end of 2022, tortillas and flatbreads will have returned to normal, pre-2019 rates of volume.”
Flatbreads’ healthy growth in 2021 was driven by a handful of brands that successfully introduced new uses and styles of the bread to consumers.
Toronto-based FGF Brands’ Stonefire brand drove most of the category’s growth, Ms. Altobelli said. The bakery posted 40.4% growth for a total of $64.8 million in sales in 2021, according to IRI. The brand offers a popular line of naan breads, which come in original, roasted garlic and whole grain, as well as mini naans and naan dippers.
Naan is just one example of producers successfully introducing flatbreads from different culinary backgrounds to meet consumer demand.
“We’re seeing a lot of new global styles emerging and gaining prominence with audiences that are less familiar with them,” said Claire Lancaster, senior strategist, food and drink, WGSN. “Manakish, which is a round flatbread sort of like an Arab pizza, is seeing a lot of growth. We’re seeing northern Chinese flatbreads popping up, Italian flatbreads, even some African styles.”
For example, Ridgefield, NJ-based Toufayan Bakeries offers tandoori, an Indian-style flatbread. The bakery is experimenting with adding Mediterranean flavors to its flatbreads as well.
“Introducing Mediterranean flavors like zaatar with your flatbread, I could see as a possible trend for 2022,” said Karen Toufayan, vice president of marketing and sales, Toufayan Bakeries. “So it’s not just a plain tandoori, but a zaatar-flavored tandoori.”
As the flatbread category expands, consumers will be introduced to plenty of new styles and flavors from around the world.
“There’s a lot of different types of flatbreads that are less familiar to the North American audience right now that we think will grow in popularity in the next few years,” Ms. Lancaster said.
Expanding the healthy halo
Tortillas and flatbreads are perceived by many consumers as healthier than traditional breads, despite the fact they are often higher in calories, salt and fat when compared side by side. At the same time, consumers are getting savvier — examining their product labels to better understand what they’re eating and what’s perceived as healthy. Consumer demand for gluten-free, vegan and low-carb tortillas and flatbreads has increased as a result.
In response, bakeries are introducing products that meet these demands and maintain the category’s healthy halo. Toufayan Bakeries has seen great success with its healthy offerings.
“Our gluten-free tortilla wrap is our No. 1 seller online, and a very close second is our whole wheat pita bread,” Ms. Toufayan said. “The biggest trends are Smart Grain and low carb, no doubt.”
The bakery also offers low-carb Smart Pockets, which Ms. Toufayan describes as a conventional American version of a pita bread, made with sprouted grains like their low-carb wrap.
Mission Foods, Irving, Texas, also offers “Carb Balance” tortillas that come in flour, whole wheat, spinach herb and sundried tomato basil. The tortillas earn an excellent source of fiber claim and have as little as 3 grams of net carbs. The popular line increased its sales by 26.9% in the latest period to $307.4 million, according to IRI. Gruma SAB de CV, Monterrey, Mexico, which owns Mission Foods, said it plans to introduce more of these healthier products.
“The client base we have been able to build for our better-for-you line has enabled us to create some stable levels of growth for these products, which is part of our strategy to increase their composition in the portfolio from single digits to 25% currently,” said Adolfo Fritz, Gruma’s investor relations officer in an earnings call last October. “Our plan is to keep on pushing forward to further expand the composition with these products, making our portfolio even more profitable over time.”
Flour and corn varieties still dominate the tortilla category, but producers are now offering healthier grain-free alternatives.
Mission recently expanded its better-for-you line with almond flour and cauliflower tortillas that are gluten-free and vegan friendly. And Siete Family Foods, Austin, Texas, which grew its dollar sales by 54.5% in 2021, also offers almond, chickpea and cassava flour tortillas.
Flatbreads have been a bit slower to the grain-free and vegan space, Mr. Kabbani noted. But this is beginning to change. For example, Trader Joe’s now offers a cauliflower thin, a flatbread cauliflower substitute that’s gluten-free.
Toufayan Bakeries is also paving the way with its better-for-you flatbreads.
“All of our flatbreads are naturally vegan. We’re pretty much the only vegan naan bread that’s out in the marketplace, in addition to our naturally vegan wraps, pita breads and tandoori,” Ms. Toufayan said. “We certainly check off the box for a demand, and there is a demand for plant-based foods.”
Overall, the health claims that posted strong dollar growth for tortillas and wraps include high fiber (20.8%), no sugar (26.9%), sweetener-free (23.3%), no artificial ingredients (10.9%) and gluten-free (7.8%), according to IRI. Low-calorie claims also saw significant growth for tortillas, with 5 to 40 calories gaining the most (84.1%).
Looking for authenticity
Healthier tortilla and flatbread options are in high demand, but the stresses of the pandemic have also left many consumers wanting to indulge.
“Consumers during this pandemic are trying to treat themselves a bit and look for unique tastes,” Ms. Altobelli said. “People are looking for premiumness and authenticity.”
Stonefire has had great success marketing its flatbreads around words like these.
“[Stonefire products] don’t have a lot of health claims like low-carb or high fiber, but what they tout is that they’re a premium brand, which is evident by their packaging and that they’re oven-baked with authentic taste,” Ms. Altobelli said.
Consumers value quality, as well as simplicity when it comes to their tortillas and flatbreads. Better-for-you ingredients are important, but just as important to many consumers is an ingredient list they can understand.
Tortilla Land, Springdale, Ariz., highlights its tortillas’ simplicity, labeling them as easy to cook and made with just five simple ingredients. Posting 13.9% growth in the latest period, Tortilla Land’s success shows that less is oftentimes more in this category.
Stepping outside the box
While traditional breads are seen as a versatile base ingredient that can be used in all kinds of dishes, many consumers still think of tortillas as a food unique to Mexican cuisine. The same is true for flatbreads like pitas and naans as Mediterranean or Indian staples.
Producers are trying to change this, however, making it known that tortillas and flatbreads are far more than their area of origin and can be every bit as versatile.
“A few years ago, we started thinking of tortillas as a food delivery platform as opposed to just food itself,” Mr. Kabbani said. “And that right there broadens how people think about tortillas.”
CraftMark Bakery, Indianapolis, applies the same philosophy to its flatbreads and wraps.
“The beauty of flatbreads and wraps are in their versatility,” said Liz Rayo, the bakery’s senior vice president of marketing and innovation. “They are literally a blank canvas for so many menu ideas.”
Flatbreads are rightfully appreciated as a global food with roots in the Mediterranean and Asia, but Ms. Rayo noted a lot of the bakery’s emphasis is on showing consumers that flatbreads can also be used in place of traditional bread items.
“Part of this education is helping people understand how they can incorporate flatbreads into their daily meal plans,” Ms. Rayo explained. “As an accompaniment to a salad or soup, as an alternative to bread or rolls for sandwiches. There is so much you can do with flatbreads and wraps to create fun, delicious, unique meals and snacks.”
Toufayan Bakeries uses social media marketing for many of its products.
“Whether it’s Instagram, Facebook or TikTok, we’re constantly putting it out there,” Ms. Toufayan said. “We’ve got a database of thousands of customers, and we’re constantly bombarding our consumers with recipe suggestions.”
These unique suggestions include using pita bread to make a dessert with cooked apple, cinnamon and sugar, or using a gluten-free wrap as the base of a pizza crust.
“You can use the naan bread, which is typically thought of as an Indian food, to make a really great Italian panini out of,” Ms. Toufayan said. “You put it in your panini press, where you add fresh mozzarella, meat and marinara, and you’re good to go. We’re constantly making suggestions so that our consumers know that every product is extremely versatile.”
One thing is certain — producers want consumers to step outside the box with tortillas and flatbreads. If this continues, with producers expanding their products’ usage and health claims, the category will continue to grow.
Adapting to industry challenges
Tortillas and flatbreads have seen strong growth thanks to increases in at-home cooking and demand for healthier products, but there is still plenty of strain on the industry as well. Cost increases, supply chain issues and labor shortages remain problematic for manufacturers like Brooklyn, NY-based Aladdin Bakeries.
“Trucking was once a small percentage of each transaction. Now, it is often difficult to find carriers, and if we do, the costs have often increased more than we’ve been able to consider in our pricing,” said Theresa Watkinson, Aladdin Bakers’ chief operating officer. “We always have aimed at offering pricing stability, but this is not possible anymore. It is frustrating for us and our customers. Fortunately, we aren’t in this situation alone, so our customers have been understanding.”
Ridgefield, NJ-based Toufayan Bakeries has faced similar challenges.
“It’s becoming increasingly difficult to get other supplies such as bags and boxes, and a lot of that is due to not having the manpower in your factories,” explained Karen Toufayan, vice president of marketing and sales, Toufayan Bakeries. “The cost of making a package of bread has also really skyrocketed, so we’re dealing with a lot of issues when it comes to pricing and increase of costs.”
Both bakeries have managed to grow despite these challenges, emphasizing the importance of staying on top of operations and maintaining industry relationships in case the going gets tough.
“We are certainly experiencing supply chain issues like every other food producer, but we have great relationships with our vendor-partners and have so far managed to grow our business and maintain 100% fill rates to our customers,” Ms. Watkinson said. “It is challenging, but we have a great team, and we have been able to avoid many of the pitfalls of our competitors. Being located in Brooklyn has benefits, such as a good labor supply and proximity to many major suppliers in our region.”
Toufayan Bakeries’ strong relationship with bag and box suppliers has helped it through recent supply shortages.
“We’re a pretty big customer for a lot of those folks, and we always pay our bills on time, so we find ourselves to be a lot of times at the front of the line when it comes to getting bags and boxes,” Ms. Toufayan said. “And quite frankly, we just try to source out as many box and bag people as there are out there.”