Slicing into the overall bakery market that racked up $59.7 billion in grocery sales in 2018, there are similar diverging preferences for baked goods of all kinds. The first Power of Bakery report, recently released by Food Marketing Institute and the American Bakers Association, reveals how different drivers are shaping demand for bakery products sold in supermarkets.
<p>By: Rick Stein, Vice President, Fresh, Industry Relations, Food Marketing Institute<br /> <img src="https://www.fmi.org/images/default-source/photos-for-staff-use/bakery/20151208-fmi-038-web.tmb-large-350-.jpg?sfvrsn=7abe9a6f_2" data-displaymode="Thumbnail" alt="20151208-FMI-038-WEB" title="20151208-FMI-038-WEB" style="float: right; margin: 10px;" /></p> <p>Serve up a pie at a gathering of family and friends, and you can see pretty quickly how tastes differ. Someone takes a big wedge, while another person asks for “just a sliver.” There are “crust” people who savor every last pastry crumb, and there are those who dive right into the filling. You might get a request for a scoop of ice cream for pie a la mode, while another guest may remark that they prefer their pie plain and simple.</p> <p>Slicing into the overall bakery market that racked up $59.7 billion in grocery sales in 2018, there are similar diverging preferences for baked goods of all kinds. The first <a href="https://www.fmi.org/forms/store/ProductFormPublic/power-of-bakery">Power of Bakery</a> report, recently released by Food Marketing Institute and the <a href="https://www.americanbakers.org/">American Bakers Association</a>, reveals how different drivers are shaping demand for bakery products sold in supermarkets. </p> <p>To begin with, although bakery items are found throughout the store, consumers define bakery differently. According to the <a href="https://www.fmi.org/forms/store/ProductFormPublic/power-of-bakery">Power of Bakery</a>, center-store bakery purchases are balanced between functional items like breads, buns, or rolls, while in-store bakery department sales come from desserts, sweet/goods, snacks and cookies.</p> <p>There are also demographic differences. Millennials buy more indulgent bakery items and desserts but purchase fewer functional bakery products than Baby Boomers. When it comes to health claims, Boomers pay attention to sodium, sugar and fiber, while younger shoppers look at calories, carbs, protein and gluten. Younger consumers also tend to gravitate to baked goods considered all-natural, hot/warm and organic. </p> <p>Meanwhile, growth within retail bakery is coming from distinct areas. Smaller categories are performing well: seven of the top 10 fastest growing subcategories had sales between $10 million and $139 million. Products considered “fresh” represent another area with great potential, as the top bakery-related claim important to today’s shoppers.</p> <p>To get a bigger piece of the general bakery pie, the <a href="https://www.fmi.org/forms/store/ProductFormPublic/power-of-bakery">Power of Bakery</a> report identifies opportunities for food marketers to build traffic and sales. For instance, although 74 percent of shoppers typically buy functional bakery items at their main supermarket, conversion is lower for in-store bakery items like indulgent baked goods, desserts and special occasion products. This opens the door for stores to emphasize their bakery as a destination for treats and special events.</p> <p>At a time when shoppers are increasingly avoiding artificial-looking or tasting products, retailers can also tout their use of “real” ingredients. Keep in mind that three quarters of shoppers are looking for specific ingredients and/or health callouts when buying functional items in the center store.</p> <p>Retailers can make bakery decisions more convenient for shoppers with layout and merchandising. Although the in-store bakery and the bakery aisle have distinct shoppers, the <a href="https://www.fmi.org/forms/store/ProductFormPublic/power-of-bakery">Power of Bakery</a> report shows that many consumers would like those areas to be physically closer to make browsing and buying decisions easier.</p> <p>Finally, bringing it back to the notion of serving desserts at gatherings, one can’t dismiss the power of emotion when selling bakery items, especially considering that breads and baked goods are bought by 99.9 percent of U.S. households. The 2019 <a href="https://www.fmi.org/forms/store/ProductFormPublic/power-of-bakery">Power of Bakery</a> report confirms many positive word associations with the term “bakery,” such as fond childhood memories, family love, and wonderful tastes and smells. Tapping into those sentiments can lead to a positive—and repeatable—experience.</p> <p><a href="https://www.fmi.org/forms/store/ProductFormPublic/power-of-bakery" class="button-secondary">Download the 2019 Power of Bakery Report</a><br /> <br /> <a href="https://www.fmi.org/forms/meeting/MeetingFormPublic/view?id=55C93600000295" class="button">Register for the April 17 Webinar</a></p>
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