Kroger made headlines recently when it announced liftoff of its autonomous delivery pilot in Houston. But a very different introduction in the Lone Star State could have a more immediate impact on sales.

Last month, the country’s largest grocer launched its first ever line of all-natural, European-style artisan bread in most of its Dallas and Houston-area stores. The private label bakery brand, Moulin Francais, is prepared according to traditional methods, said Kroger bakery director Pam Gregory, and includes more than 20 different selections and a range of styles, from garlic bâtard to country boule, ciabatta to a multigrain baguette. Prices range from 99 cents to $3.99.

The Texas rollout follows hot on the heels of Kroger’s initial test of Moulin Francais, which began in the Denver market in December. According to Gregory, sales so far are exceeding expectations.

"We are experiencing repeat purchases and gaining new category customers," she told Grocery Dive in an email.

With more than a thousand private label introductions last year, Kroger has a lot of store brand offerings in various stages of development at any given time. But Moulin Francais underscores the time and resources the company is willing to devote in order to entice specialty consumers. It also highlights Kroger’s need to flex its muscles in a key category as discount grocers Lidl and Aldi roll out fresh-baked goods in their stores, as Whole Foods cuts prices and Walmart moves upmarket with more perishable and locally sourced products.

Gregory said Kroger’s bakery team partnered with a family-owned business that specializes in European, long-fermentation style baking. Together, they spent more than a year developing a process that would yield fresh bread with a "crispy golden crust and open-textured interior," she said. Selections, including cranberry walnut bâtard, rosemary focaccia and sesame semolina pavé, are baked to about 95% completion and then finished at the store bakeries.

Gregory declined to detail how Moulin Francais is merchandised in stores, noting the bread can pair with specialty cheeses and meats at Murray’s Cheese counters. Kroger acquired the specialty purveyor in 2017 and has outposts in hundreds of stores across the country.

Kroger plans to expand Moulin Francais to additional markets across the country this year, Gregory noted.

"We’re constantly developing new products and flavors to ensure our customers' cooking and eating experiences are on-trend, delicious and easy," she said. "The introduction of Moulin Francais does just that by delivering the best of rustic, French artisanal bakeries to our customers' tables."

Artisan bread is one of the fastest-growing subcategories within grocery bakery departments, with sales up 21% last year to $62 million, according to Nielsen data cited by the Food Marketing Institute’s latest "Power of Bakery" report. Bread throughout the entire grocery store accounts for $8.5 billion in supermarkets sales, and plays a key role in driving store trips.

Meanwhile, private label continues to be a major focus for Kroger as it fights to overcome shrinking margins. Store brands recently surpassed 30% unit sales share for the company, and standout performer Simple Truth, a natural and organic label, now brings in more than $2.3 billion annually. Kroger has also invested in research and development, opening a Culinary Research Center last year near its Cincinnati headquarters.