FMI Report Showcases Power of In-Store Bakery

Grocers have several opportunities to win share of segment
Emily Crowe, Progressive Grocer
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Nearly all shoppers polled by FMI said that they eat items from grocers' in-store bakeries at least occasionally.

The supermarket in-store bakery has undergone a renaissance of sorts in recent years as a result of the pandemic and changing consumer preferences, and today can offer a lot of opportunities for grocers, according to the inaugural "Power of In-Store Bakery" report from FMI -- The Food Industry Association.

When it comes to in-store bakery items, 95% of consumers said that they eat them at least occasionally, and 63% do so weekly. Over the past year, unit sales have increased 7.4% and dollar sales have gone up 14.4%, with muffins, cupcakes and cookies seeing the largest dollar sales increases, respectively. Cakes, followed by cookies, ranked among the biggest sellers.

Some 78% of survey respondents said that they purchased functional bakery items, such as bread, buns, bagels and rolls, at the same store where they purchase most of their groceries. Only 51% of shoppers, however, said that their primary grocery store is their main destination for in-store bakery items.

Opportunity exists for grocers as far as indulgent items like cakes, pies and store-made desserts are concerned, especially considering that 24% of shoppers look to specialty bakeries, 11% go to grocery stores other than their primary store, and 6% go online for such options.

“Our first-ever exploration on consumer perceptions of in-store bakery reveal[s] several opportunities to enhance grocers’ strategies: Expand customer loyalty by enticing shoppers with freshness and assortment, incorporate and communicate quality ingredients, and lead with transparency on ingredient and nutrition callouts, even for those indulgent items,” said Rick Stein, VP of fresh foods at Arlington, Va.-based FMI.

Indulgent items, including doughnuts, cookies, snacks, coffee cakes, single-serve desserts and cupcakes, also offer opportunities for grocers, as shoppers said that they often buy these items on impulse. Additionally, freshness is often top of mind when it comes to making these impulse purchases, so knowing when a product was baked is extremely important for shoppers. Sales or promotions can also lead customers to make more impulse purchases.

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