Today, worries about the economy are prompting many American shoppers to tighten their belts, while concerns about diet and health, as well as steadily expanding waistlines, are forcing many to let that belt out a notch or two, or maybe more.
So is that a prescription for disaster for the in-store bakery? Not so much.
In the 52 weeks ending July 10, 2010, total bread and baked goods sales in the U.S. food, drug and mass merchandiser stores exceeded $18.5 billion, off just under $200 million from the same period last year, but well ahead of the $17.8 billion posted in 2008, according to The Nielsen
Company. But there’s reason for optimism, notes John Rose, bakery category manager for the 150-store, Tyler, Texas-based Brookshire Grocery Co., who is well aware of consumer economic and health-related Concerns.
“Given that everyone has been affected in one way or another [by the economy], our customers have been very supportive of the new products that we’ve initiated, and for that we’re very humbled and grateful,” he says. Fresh baked “goodies” in particular, he adds – whether breads, rolls, sweet rolls or puff pastry – remain especially popular among customers.
“To support this trend, we’ve ensured that our merchandising and ads mirror these initiatives respective to category and price offering,” Rose explains, notingthe regional grocer’s prevailing responsiveness to the health concerns of many shoppers. “We are making a heightened, concerted effort to meet the needs of customers clamoring for a host of bakery products such as whole grains, all natural, gluten-free, sugar-free, NSA and, yes, good oldfashioned ‘delectable and gooey.’”
To court heightened customer demand for healthier breads, Brookshire’s last year launched its Full Circle All-Natural Artisan breads, offered at a higher retail price than traditional
French or Italian loaves. “In addition, we will be expanding our gluten-free offerings this year,” says Rose, “which we believe will resonate beyond customers who adhere strictly to a celiac diet. In effect, we are endeavoring to become a destination point for a wider spectrum of bakery customers, all the whilestaying focused on the needs of customers who brought us to the dance in the first place.”
Brookshire’s has seen a shift in shopping patterns, with more people cooking at eating at home. “Obviously, when customer traffic increases, in-store bakeries become beneficiaries through juxtaposition or proximity to more customers,” notes Rose. “Thus, it is very important that we offer products that meet or exceed what customers may expect to find in restaurants. This can include items such as artisan breads, desserts, and fresh-baked offerings in a host of categories.”
Smaller-portion offerings, such as single-serve gourmet cupcakes and newly launched single-serve cheesecakes, are gaining a favorable response at Brookshire’s, according to Rose. “Some of this may be due to an increasing number of empty nesters and/or people wanting an indulgence, sans the need to be concerned about using it all up,” he speculates.
Dr. Rosita Thomas of Manassas, Va.-based Thomas Opinion Research, who conducted a study released in June for the International Dairy-Deli-Bakery Association (IDDBA), offers her take on the state of affairs in the in-store bakery.
In 2009, only 17 percent of consumers interviewed for a similar study said they had more money to spend than two years ago. This year, that number jumped to 31 percent. In 2009, 45 percent said it was very difficult to make ends meet. In 2010, only 20 percent agreed with that statement. In 2009, 27 percent said they expected their financial situation to worsen, compared with 20 percent today.
“The greatest impact of the fragile economy on in-store deli and bakery purchases is that ‘price’ and ‘perceptions of price’ have become more prominent as the overarching consumer purchase driver,” Thomas says. “Consumers are more price conscious and are actively seeking ways to control spending.”
At the same time, the percentage of households with health concerns has increased significantly since 2004, with more family members being overweight and having high cholesterol, high blood pressure and diabetes. Nevertheless, Thomas wrote in her report: “Having health issues doesn’t always motivate people to make sensible behavioral changes,” noting that the percentage of consumers who are decreasing their intake of fat, calories or sugar has declined since 2004 – as have the numbers of family members making a serious effort to exercise more.
Still, more consumers are buying more products with health concerns in mind, she says, and are looking for information to guide them in making better food choices.
Activating Bakery Sales
How does this translate into action in the in-store bakery? According to Thomas, “freshness” is overwhelmingly the No. 1 volunteered reason for shopping at in-store full-service bakeries, dislodging “convenience” as the primary motive – although “convenience” remains the main reason for shopping at the self-serve bakery. More consumers are now buying baked goods from discount supercenters, up 26 percent from 2004 to 78 percent this year.
The top purchase drivers for in-store bakeries (other than price) reported by Thomas are availability of samples or samples provided upon request, fresher breads and sweet goods, and whether their children wanted something.
Among the report’s significant highlights, 52 percent of consumers surveyed reported eating fewer baked sweet goods than a year ago, down from 59 percent in 2004, with cheesecake reported as the favorite dessert to eat out and chocolate cake coming in second.
Thirty-eight percent said they’re eating less bread than a year ago, but 37 percent reported eating more whole grain breads and 28 percent said they consume value-added breads (such as iron-fortified, highfiber and crustless).
Despite increased media attention to gluten-free products
, twothirds of survey respondents said they had never purchased such items, although 60 percent said they purchase trans fat-free bakery products, compared with 36 percent in 2004.
Sixty percent have also purchased reduced-sugar or sugar-free bakery products, vs. 37 percent in 2004. Karen Peckham, IDDBA education informati
• Health: Demand for whole grains, antioxidants, low fat, and reduced sugar, carbohydrates and salt, as well as organic products
• Mini-bites: Portion-controlled cakes, pies, brownies and muffins “help consumers with restraint and provide value as well”
• Ethnic: Increasing selection of Hispanic products and those with Asian flavors.
on specialist and gatekeeper of the Madison, Wis.-based trade group’s soon-to-be-released “What’s in Store 2011,” says Brookshire’s is right on target with many of the key bakery trends that will be discussed.