Need-to-Know Trends for Retail Bakeries

The bakery is a popular destination this time of year, continuing through graduation season, Father’s Day and the Fourth of July festivities. As retail bakeries gear up to meet demand, they are mindful of category trends and market shifts impacting what and how their customers are buying.

Sarah Hickey, senior director of marketing and insights for Jackson, Mich.-based Dawn Foods, talked with Progressive Grocer about the findings from the company’s 2023 Global Trends Report. Hickey noted that these trends are occurring in the context of what she calls the “three-headed monster” of stubborn inflation, product shortages and labor challenges. “You have to be able to get ingredients and you have to be able to get someone to make it for you,” she pointed out, summing up the situation that many retail bakeries have found themselves in over the past few years. 

[Read more: "Top Trends at the 2023 Sweets & Snacks Expo"]

Although inflation is easing in some areas, she adds, prices remain elevated in others. “From a total profit standpoint, some are getting better, but I don’t believe we’re out of the woods yet. Pricing won’t change dramatically, and the headwinds of the labor shortage are a big part of the total price for the consumer at the end of the day,” she observed.

Against this backdrop, the company’s report revealed areas of growth and change for grocers with in-store bakeries. One of the trends ties into technologies that have reshaped many aspects of the CPG and grocery sectors, such as QR codes, digital and touchscreen ordering and the deployment of social media promotions. “Consumers have learned to embrace and experience technology in new ways,” Hickey said, adding that retailers are responding in kind. 

Meanwhile, retail bakery pros can also keep in mind consumers’ desire for new experiences, even with favorite and familiar products. “We’re seeing a melting pot across the globe – not just in North America. In the European market, for example, the fastest growing goods are sweet American baked goods,” Hickey reported.

Creating novel experiences requires just a few tweaks, she added. “A churro doughnut isn’t that much different than a sugar cinnamon doughnut, but they can be from different cultural experiences,” Hickey said. Other examples include mocha-flavored doughnuts, red velvet doughnuts, apple crisp doughnuts, spiced brownies and some sweet-savory combinations that combine exploration and nostalgia.  

While consumers are open to culturally-inspiring twists on classics, they are also seeking out what Dawn called “daily delights” in its latest trend report. “It’s the small individual indulgences that consumers enjoy on a daily basis. These are moments of joy and happiness that focus on people’s well-being,” Hickey explains, adding, "Sweets play a nice role in that." She cited examples such as gourmet cupcakes and dessert-flavored doughnuts with a premium flavor.

The uptick in offerings for well-being and multicultural flavors reflect another trend spotlighted in this year’s report: mindfulness. “This is the evolution of health and wellness to the perception of ‘What is right for me and my physical well-being and mental well-being?’ It’s about being conscious about what you are putting in your body, versus being on a diet or being restrictive,” she shared, adding that desserts in individual serving sizes and mini portions can play to this trend.

These and other trends often intersect at the point of sale, but Hickey is quick to note that bakeries don’t have to reinvent their portfolios. “You can do one mix that delivers against all of those things. A mix just requires the addition of water and there are many ideas of products to make,” she pointed out. “Or maybe they want to try something new but don’t have the labor to make one more type of doughnut each morning. So how about a frozen doughnut?”

While the Dawn Foods R&D team works with retailers on different offerings, they are also helping address other issues faced by bakery departments. Recently, the company introduced a “pack perfect” glaze, a non-sticky doughnut glaze that allows retail bakeries to provide a fresh doughnut experience to consumers in clamshell packaging with a longer shelf life. That glaze and packaging can also help address shrink and waste due to products that can lose visual and eating appeal if the glaze rubs off or is smeared.