Bakery Connects Emotionally With Consumers, Drives Grocery Sales

Bakery Connects Emotionally With Consumers, Drives Grocery Sales
"Power of Bakery" infographic

Total bread and baked goods sales surpassed $59 billion in 2018, according to the inaugural "Power of Bakery" report, which was released jointly by the Food Marketing Institute (FMI) and the American Bakers Association (ABA). The sales were split between the in-store bakery and the center store, which includes frozen and dairy departments. The report details consumer perceptions, attitudes and behaviors regarding the bakery category, which falls between produce and frozen when it comes to retail sales in grocery stores.

In-store bakery sales accounted for $13.8 billion, with sales dominated by desserts, sweet goods and cookies, while center store sales were balanced between functional and indulgent items. Fresh was the big winner when it comes to production-related claims, mentioned by seven out of 10 shoppers overall, and specifically by 80 percent of Boomers.

Bakery is one of the biggest draws for consumers to go to the grocery store – bringing them in about once a week – but many consumers have a dual-store strategy where they shop the in-store bakery in one retailer and go to another for center store products; 37 percent of shoppers typically purchase indulgent bakery items at a place other than their primary grocery store.

“Indulgence is a clear sales driver in fresh bakery, claiming 76 percent of total department sales,” said Rick Stein, VP fresh foods at Arlington, Va.-based FMI. “The analysis highlights the importance of segmenting audiences to better align innovation, merchandising and marketing.” Stein noted that Millennials (30 percent) are twice as likely to shop the in-store bakery exclusively compared with Boomers (17 percent).

Varying Definitions of Personalization

More than three-quarters of shoppers want to be able to personalize their bakery purchase, but this doesn’t necessarily mean that the items need to be made from scratch to suit their preferences. The greatest percentage -- 42 percent -- prefer packaged items, with the ability to personalize them. Shoppers believe that scratch baking creates a superior product, but 57 percent are indifferent to whether their store uses partially prepared/baked ingredients.

Health in Bakery Products

About two-thirds of shoppers noted that health, nutrition and making better choices are factors in their purchasing decisions on indulgent items or desserts. Half of shoppers look for “real” ingredients, and 40 percent look for smaller portion sizes.

“Consumers are clearly looking for healthy ingredients to drive their dietary habits, and bakers will need to leverage their products’ positive health attributes,” noted Robb MacKie, president and CEO of Washington, D.C.-based ABA. “However, bakers and retailers need to connect with consumers, give them opportunities to smell, touch and taste their products. That is what drives the emotional connection to the category, regardless of product segment.”

"The Power of Bakery 2019" was conducted by San Antonio-based 210 Analytics and Cincinnati-based ToddHale LLC. The report was produced with support by Corbion. The link to access the report can be found here.

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