Fazer Bakery crafts tasty and versatile breads as well as delectable sweet pastries and cakes. Alongside our highly valued and well-established product portfolio, we also create new and tempting novelties in packed, frozen and freshly baked shop-in-shop ranges. We offer delicious baked goods for every taste.

In 2020, the trends impacting the bakery business included consumers favouring local production and raw materials. The artisanal trend continued to grow at a steady pace, and craftmanship was appreciated. Holistic well-being remained a significant factor in food choices, and consumers looked for health benefits in bread. The popularity of oats continued, and sustainability remained high on consumers’ agenda.  

Performance in 2020 

Fazer Bakery’s net sales remained at previous year’s level. With sales adjusted for exchange rate impacts, the development was positive in all other markets than in the Baltics. The demand for both prepacked and artisanal type of bread continued to grow, whereas the frozen bakery sales to hotels and restaurants were below previous year due to the pandemic. Increased price-sensitivity affected markets in Russia and the Baltics.  

Fazer is the market leader in the Finnish bakery business and continued to steadily increase its market share. The growth can be attributed to a number of factors – our established portfolio of packed products and strong brands, innovative novelty launches, excellent cooperation with retailers and the growing network of shop-in-shop bakeries, of which we had 105 at the end of 2020. 

In early 2020, we expanded our offering and expertise in glutenfree baking by acquiring the Vuohelan Herkku bakery. With the acquisition, Fazer took over a new and modern gluten-free bakery in Lahti and a gluten-free mill in Joutsa. The acquisition is part of our strategy implementation and further strengthened our position as the leading Finnish FMCG brand. 

In Finland, the demand for packed bread increased drastically as soon as the COVID-19 pandemic started: our production and logistics were able to react quickly ensuring continued excellent service. Sales of frozen products were heavily impacted as restaurants and hotels faced restrictions and closures. Demand slowly improved towards the end of the year but did not fully recover. Throughout the year, we implemented turnaround programmes in the Swedish and Russian bakery businesses. These measures were very successful in improving our profitability in accordance with our strategic targets. 

In Sweden, financial results exceeded the previous year due to increased sales and efficient cost control but still remained unsatisfactory. Sales increased in all channels as a result of strong product launches in strategic segments and good development in export. The Swedish team was rewarded with the nomination of #1 bakery business partner in Sweden by our customers, with special recognition for our ability to deliver. Productioperformance developed strongly, surpassing all KPIs towards the end of the year. 

We were able to strengthen our market position in Russia. Bakeoff bread saw double-digit growth, and we increased sales in the e-commerce channel and launched our own online shop. Fazer in Russia was one of the two companies to receive an official letter of gratitude signed by the Governor of St. Petersburg for support to the city and its population during the pandemic. 

In the Baltics, financial insecurity caused by the COVID-19 pandemic shifted consumer interest from premium towards more mainstream products. The market situation in Baltic retail was undergoing a change, with new players giving rise to fierce price competition. Cooperation with a major customer was intensified and efficiency improved in connection with an operating model review. Two new shop-in-shop bakeries were opened in Estonia, where we had 5 shop-in-shops in total at the end of the year. 

Our bakery innovations in Finland included the Kiireetön family of premium-quality bake-off breads and a sliced mixed grain bread with low-FODMAP content, which utilises Fazer’s patented LOFO-enzyme. In Russia, we introduced Fazer PRO Bake, a new line of bake-off bread and coffee bread for baking at home. In Sweden, a new oat concept successfully answered the consumer demand for a light bread for the family with a healthy profile. 

Going forward 

We continue to execute our growth strategy through the Consumer First approach. We base our product and concept development on researched consumer insight and maintain a continuous dialogue with consumers. Sustainability remains high on our agenda and we keep working actively towards reaching Fazer’s sustainability goals. The focus is on reducing CO2 emissions through several different means, for example by reducing food waste and implementing more environmentally friendly energy solutions. We use locally produced grain and other raw materials whenever possible and strengthen our cooperation with farmers and other stakeholders as a part of Fazer’s Grain Vision programme. 

In Finland, we believe that the consumption of bread will continue to increase in the coming years, and we aim to strengthen our position as the industry leader. The gluten-free market is growing quickly in Finland, as is artisanal baking. We have a strong presence in both. By strengthening our digital competences and in fast-growing e-commerce we will be able to reach our consumers in the channels of their choice. We will also open some 20 new shop-in-shop bakeries and hire 100 new artisan bakers in 2021. 

In Sweden, the retail market is expected to continue showing modest volume decline but small value growth. We estimate our market share to follow that development but with opportunities in categories such as dark portion and farmhouse breads. 

In Russia, the growth in bake-off is expected to continue. The downtrading trend will keep shifting consumer demand towards lower price levels, and retailers are increasing their focus on portfolio efficiency. We will address these trends via portfolio choices and targeted commercial efforts. We will also strengthen our online marketing activities. 

In the Baltics, overall bread consumption is expected to decline. We will strengthen our positions in portion breads, applying meal solution know-how, and further expanding the shop-in-shop concept in Estonia. 

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