Brands Are Big in Center Store
St. Pierre isn’t the only company to have success with brands in the baking category. Thomasville, Ga.-based Flowers Foods, the company behind Nature’s Own, Dave’s Killer Bread, Wonder, Canyon Bakehouse and Tastykake, saw a 23% increase in branded product sales during its fourth quarter ended Jan. 2, 2021. Branded products accounted for 66% of the company’s total fourth-quarter sales of slightly more than $1 billion, while its store-brand products saw sales decline 3% to represent 13% of total fourth-quarter sales.
This growth was driven by a shift to branded products during the pandemic, new product introductions, improved promotional efficiency and a reduction in product returns, according to the company. Store-brand sales suffered as a result, and Flowers Foods also sought to implement a price increase, which resulted in some lost business.
Meanwhile, according to Grupo Bimbo, parent company of Horsham, Pa.-based Bimbo Bakeries USA, operator of 60 facilities nationwide, its North American sales in the fourth quarter increased 11%, when the Mexico City-based company accounts for the favorable effects of currency translation. Bimbo is best known in the United States for brands such as Sara Lee, Entenmann’s, Thomas, Bays, Arnold, Ball Park, Mrs Baird’s and Boboli.
Bimbo and Flowers Foods, the biggest players in center store, both have concerns about 2021 growth compared with the unprecedented gains of 2020. Demand potentially shifting to food away from home and a perimeter department rebound are seen as sources of center store pressure.
The Bifurcation of Baking
The at-home food preparation trend is what Sally Lyons Wyatt, EVP and practice leader, client insights at Chicago-based IRI, views as consumers getting in touch with their inner chef. With 81% of meals being prepared at home and people cooking for occasions throughout the day, Wyatt notes that “baking saw an incredible increase.”