With popular diets that limit bread and baked goods still going strong, you’d think that in-store bakeries would be hit hard. In fact, quite the opposite is happening: bakeries continue to be a key driver of grocery store sales, with many shoppers expressing a positive emotional connection to bread and baked goods, according to recent findings from the 2019 Power of Bakery Report jointly released by the American Bakers Association (ABA) and Food Marketing Institute (FMI).
According to the report, total bread and baked goods sales surpassed $59 billion in 2018, split between the fresh bakery department and items located in the grocery, frozen and dairy departments. In-store bakery sales were $13.8 billion and are dominated by desserts, sweet goods, and cookies, whereas center-store sales are more evenly balanced between functional and indulgent items.
What About Healthier Options?
Gluten-free is hitting a high, with 81 percent of survey respondents reporting that they sell gluten-free products—up from 68 percent last year. The number of stores carrying nut-free and egg-free products also saw significant increases. However, it’s worth noting that while more retailers are offering “free-from” products, only 11 percent of sales came from those products, down from 16 percent last year.
When seeking answers as to why sales of traditional sweets would be increasing during a period where healthy eating is dominating the headlines, it’s important to look at the emotional connection people have with bakeries and baked goods and the reasons they make their purchases. The Power of Bakery survey asked respondents what comes to mind when they hear “bakery,” and the associations are positive, such as “yummy” or even “love.” Whether it’s a doughnut, tart, or pastry, the buyer equates baked goods with special occasions and the occasional splurge.
To get a bigger piece of the general bakery pie, the report identifies opportunities for retailers to build traffic and sales, FMI’s Vice President, Fresh, Industry Relations Rick Stein says. “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.”
Progressive Grocer’s 2019 Retail Bakery Review has similar findings, stressing that supermarkets have the opportunity to become an indulgence destination where people can treat themselves, providing your offerings meet their needs, i.e., quality made, fresh products shoppers deem “worth the calories.”
Looking to Increase Bakery Sales?
Here Are Six Steps to Help Keep Your Bakery Aisle Fresh.
- Don’t Shy Away from Sweet Treats:
While free-from, organic, and natural baked goods play a big role in bakery, both studies show a growing opportunity to increase bakery sales with freshly baked sweet treats. According to Progressive Grocer, cookies remain in the top spot, with more than half (53 percent) of survey respondents reporting them as the top-selling products, climbing from the third spot in 2017. Cakes, doughnuts, and muffins are also top sellers, and tops for highest profits.
In addition to the tried and true offerings, try experimenting with unique and novel flavor combinations, such as maple bacon doughnuts from Gary & Leo’s IGA in Havre, Montana. Allow for personalization with mix-and-match deals and sampler packs. Promote on Facebook and let the frenzy begin!
- Play up the Freshness Factor:
The Progressive Grocer bakery study finds that bakeries play an important role in emphasizing the store’s freshness image. Whenever and wherever possible, highlight the products made fresh in-house, using the signs available through the newly launched Local Equals Fresh brand kit.
For example, working with Red Oval partner DG Graphics, Susanville Supermarket IGA in California created custom bakery signs from the Local Equals Fresh branding options to promote their popular doughnuts made fresh daily. When the doughnuts are sold out for the day, the signs go in the empty case to remind customers of “the best doughnuts on the planet.”
Another idea: show the freshness in action. Give your customers a look behind the scenes, like in this video from Gary & Leo’s of an employee filling fresh cream puffs.
- Own Those Signature Items:
Shine a spotlight on the local products that make your store stand out. For Stodola’s IGA in Luxemburg, Wisconsin, it’s Belgian pies. A regional specialty that pays homage to the area’s Dutch settlers, this sweet yeast pie is typically filled with a fruit filling or rice pudding and finished with a cream cheese topping. Stodola’s makes them from scratch three days a week.
For Nemenz IGA in Struthers, Ohio, a new annual tradition is made-to-order packzis on Fat Tuesday. This traditional Polish pastry is similar to a filled doughnut, but much richer and sweeter. This past year, staff stuffed them to order, allowing customers to choose their fillings from a selection of seven flavors, and buy them individually or in mix-and-match four packs. Read about their successful sales here, and check out this special event Nemenz held for Father’s Day where families could try their hand at decorating a cake or cookie for dad.
- Source Local:
Create buzz by partnering with a popular local producer and carrying their products and/or incorporating locally-grown ingredients. That approach has worked for Camano Plaza IGA in Camano Island, Washington. They sell organic, locally-made Wild Crow Company pies that also feature locally-sourced ingredients.
- Go Gourmet:
Like doughnuts and cupcakes, cookies are enjoying a moment of “gourmetization.” People are setting higher expectations and seeking out products that are different and special. When Brooks Marsh of Mahomet IGA in Mahomet, Illinois set out to pump up his bakery department, he teamed up with locally-renowned wedding cake decorator Lori Martin and created a dedicated “Cakes by Lori at IGA” side to the bakery. This attention to quality paid off, and the store’s bakery is now seen as a destination.
“Before, people would come to us and get a tray of cookies for graduation. Now, they want a tray of Bulldog [the local school mascot] cookies or star cookies. All of a sudden, those cookies are two bucks apiece rather than $3.99 for a dozen,” said Marsh, who was recently honored with an Outstanding Independent Award from Progressive Grocer.
- Step Up the Packaging:
According to Progressive Grocer, it’s not just product trends that are impacting in-store bakeries. Shoppers are also demanding more environmentally-friendly packaging (16 percent), and those who make the switch from plastic bakery containers to cardboard pie boxes are seeing increased sales.
Want to do your part for the environment and reinforce your Local Equals Fresh message? Consider using Local Equals Fresh bakery stickers on your cardboard boxes.
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