One of the more intriguing aspects of the current bakery market is the see-saw of sales between the perimeter and center store.
Baked goods have had a good run lately. From eponymous sourdough starters during the early days of the pandemic, to the near-rush on baked goods for entertaining over the summer, items from the in-store bakery and the baking aisle have been a regular source of comfort and sustenance.
According to the Madison, Wis.-based International Dairy Deli Bakery Association (IDDBA), the perimeter bakery fared better in July than in June, with improvements in breads/rolls and morning bakery. Those categories, plus desserts and sweet snacks, are performing strongly compared with 2020 and 2019, IDDBA’s research found.
In the center store, there has been a leveling off of sales of breads/rolls and desserts compared with spikes during the pandemic stock-up and stay-at-home weeks in 2020. Still, according to data from market research firm 210 Analytics, center store breads/rolls are up 9.2% compared with the pre-pandemic year of 2019, while sales of sweet snacks are 8.7% higher than 2019 and morning bakery items rose 16.7% compared with two years ago.
Ingredients for baking are also on the upswing. The pandemic really did propel consumers back to the kitchen: A third of U.S. adults reported that they were baking more often than they did before the pandemic, according to findings from market research firm Mintel.
In-store bakery sales rebounded over the summer with the return of entertaining, but upcoming holiday sales will depend on what's happening with pandemic.
From a category perspective, one of the more intriguing aspects of the current market is the see-saw of sales between the perimeter and center store, which reflect societal trends at the time. Depending on the COVID-19 situation, consumers stayed home more, baking and enjoying ready-to-eat baked goods, or started to feel more comfortable shopping the perimeter to pick up baked goods for occasions or choosing rolls in bulk.
“The in-store bakery has been doing very well recently. It was a department that had struggled, but made a tremendous comeback. The commercial bread aisle and bakery did better than the perimeter last year, which made sense,” agrees Eric Richard, industry relations coordinator for IDDBA, noting that the dynamics have helped lift baked goods overall. “These areas are setting trends for each other. They really have a partnership where they are feeding trends that can be replicated from their perspective.”
An Inside Look
To see what trends are baked into the current marketplace, it can help to see what’s literally baked into these products. The use and emergence of various baking flours, sweeteners and inclusions provide clues to what consumers are seeking, both in goods they can take home and in ingredients they can use to make their own treats.
Those clues point to some key drivers. The groundswell of interest in health and wellness among today’s consumers is fueling growth of better-for-you baked goods and bakery ingredients. At the same time, although it’s seemingly contradictory, baked goods that can be considered indulgent are also doing well, a trend often attributed to the concurrent desire for comfort and enjoyment. The novelty factor, already important during “normal” times and elevated in an era when entertainment options are more limited, is also influencing shopper decisions. And the ongoing desire for locally made foods is affecting the bakery categories, too.
Even if there are additional shifts in consumer shopping behaviors in a still-uncertain marketplace, these trends are defined enough for manufacturers and retailers to take heed, Richard notes. “Although the way they have shopped has changed, what consumers are looking for has not,” he observes.
The keto corner of the baked goods segment is still hot, with mixes from startup brands like Keto Queen Kreations finding a niche.
The Picture of Health
Increasingly, the baking ingredient and bakery categories reflect demand for products geared toward health and wellness. That’s a pretty big umbrella, covering attributes like free-from, better-for-you, allergen-free and immunity, to name just a few.
In the better-for-you arena, which includes products that pack a nutritional punch, baked goods and ingredients are expanding to include a variety of options. “Ancient grains and whole grains are certainly trending among consumers,” affirms Richard.
The bread segment has long included whole grains and ancient grains, and there are still newcomers to that corner of the market and to other types of bakery products. For instance, this summer, Miss Jones Baking Co. rolled out a line of Everyday Delicious mixes made with 100% whole grains and sweetened with a proprietary blend of sugar, chicory root, tapioca and monk fruit.
In addition to ready-to-eat and -make baked goods, flour manufacturers are tapping into consumer interest in grains perceived to be healthy. Examples include millet, buckwheat, brown rice, quinoa and spelt flours.
Such alternative flours are also touted as ingredients in ready-to-eat baked products. Snack company Simple Mills, for its part, recently introduced a Sweet Thins cookie made with a seed and nut flour blend of watermelon seeds, cashews, sunflower seeds and flaxseeds.
Gluten-free and other items with a free-from description likewise fall under the better-for-you umbrella. “In some cases, it might be because of dietary restrictions, but the gluten-free fad isn’t going away. It has a certain health halo,” says Richard, citing data showing that the majority of people who buy gluten-free products don’t have celiac disease.
Today, more allergen-free options are available for consumers who must avoid certain ingredients. The allergen-friendly brand Partake, for example, offers a baking mix free from the top eight allergens and also free of gluten and dairy; the mix is made from a blend of gluten-free oat, buckwheat and tapioca flours, with oat milk and organic cane sugar.
Somewhere in between the trends of health and decadence are products that can be enjoyed in a spirit of permissible indulgence.
Consumers following certain eating plans also have a greater choice of baked goods and bakery ingredients than ever. Products geared toward low-carb and/or high-protein diets, for instance, appeal to a certain segment of consumers.
Jordan Sanabria, founder of Keto Queen Kreations, launched her own line of keto baking mixes when she couldn’t find many low-carb desserts in the market. The Brooklyn, N.Y., resident quit her day job as an orthodontic assistant to create her own brand, which now includes a range of mixes for sweet baked goods and bread available online and at independent grocers.
“The indulgence portion of it was key for me – I wanted to make sure it was enjoyable from all aspects, and healthy, too,” Sanabria explains, adding that she uses only organic ingredients and creates products that are nut-, gluten- and sugar-free.
To make the keto-friendly mixes for bread, biscuits, brownies, cake, cookies, coffee cake and muffins, Sanabria uses coconut flour as a base and incorporates other ingredients such as golden flaxseeds and the natural sweetener allulose. “I just started using cucumber seed flour, too,” she says.
Vegan pastries, cakes and breads are also part of the better-for-you movement. Plant-based ingredients like tofu, ground flaxseeds, plant butter and avocado, among others, are being used as alternatives to eggs and butter in these formulations. As with flours made from different grains instead of traditional white processed flour, some plant-based flours are also incorporated into baked goods, such as those made from banana, cassava, sweet potato and mango and coffee.
In a health-centric era, immunity-boosting ingredients like turmeric, ginger, citrus and nuts are also part of recipes for some baked goods. Probiotics are being added to some baked goods as well, as a way to bolster gut health. Global ingredient supplier ADM, for instance, offers dietary fiber ingredients that are said to nourish microflora in the human gut.
The health-and-wellness trend in bakery and baking also encompasses shopper interest in minimal, wholesome ingredients. “Transparency and sustainability are still important, and clean labeling plays an important role,” asserts Richard. “I think consumers will continue to seek out those kinds of products.”
Center store sales of breads and rolls are off their 2020 pandemic peak, but are still 9.2% higher than in 2019, new data shows.
Several brands are moving in this direction. KeHE Distributors’ Made With brand recently added a line of “attribute-driven” bakery products made with clean ingredients; the line includes dairy free, kosher and non-GMO brioche hamburger buns, hot dog buns and a braided challah loaf.
“We’ve seen an increased demand for products without artificial flavors, preservatives or colors in the marketplace,” says Ben Friedland, executive director for the KeHEexclusive brands. “This new line fits that consumer demand, but also our ingredient philosophy of a clean and great-tasting product.”
The Comfort Factor
In a complex world, especially in the recent marketplace, it’s not unusual for consumers to balance their interest in healthy products with more indulgent choices. These parallel eating trends are evident in bakery categories, both at the in-store bakery and center store areas for packaged baked goods and baking ingredients.
In this area, brioche products have been having a moment. The category has reached the $320 million mark as of July, according to Paul Baker, founder of St. Pierre Bakery, in Manchester, England.
“It’s also worth noting that in the past year, the bakery has only grown by 8%, while the brioche category is 37% up. Put like that, it’s clear to see the opportunity in offering consumers an upgrade from bread to brioche,” Baker notes, adding that the St. Pierre brand comprises almost a third of the market, outpacing private label brioche.
According to Baker, brioche aligns with the sense of comfort and reward that consumers are pursuing. “During the pandemic, shoppers were looking for ways to treat themselves well at home, and now, as we move away from restrictions, consumers won’t just return to old habits – especially when it comes to the quality of the food they buy,” he says.
As demand expands, so are St. Pierre’s brioche offerings, which include burger buns, hot dog rolls, baguettes, loaves, sliced loaves and, coming in September, bagels. St. Pierre also offers croissants, crepes and waffles.
Reflecting shoppers' taste for indulgence, brioche is booming, and St. Pierre Bakery is accordingly expanding its brioche offerings.
In addition to brioche, nostalgic flavors are a hit with many shoppers today. The rise of flavor varieties like “birthday cake” and “cake batter” are a testament to consumers’ penchant for baked goods that evoke a memory or deliver on sentiment. The Killer Brownie Co., for one, tapped into the marriage of nostalgia and premium taste with its line of decadent brownies, including a PB&J offering made with peanut butter, raspberry jelly, roasted peanuts and caramel.
Speaking of caramel, that ingredient has been highlighted recently in baked goods, as well as other categories like ice cream and confections. In its many forms – traditional, salted, toffee, dulce de leche, miso and cajeta, among others – caramel is an increasingly common inclusion in a variety of baked goods available at the in-store bakery and in the center store.
Somewhere in between the trends of health and decadence are products that can be enjoyed in a spirit of permissible indulgence – delicious but not over the top in portion size, calories or fat content. These kinds of products often have some added ingredients that make them permissibly indulgent, like extra protein.
Consumers who are weary of early-‘20s challenges and also looking to build on their sense of culinary adventure are fueling growth in unique flavors and formats of baked goods and ingredients.
“In general, people want to try new things. It applies across all generations and demographics, and I think that trend will continue,” says Richard, adding, “That plays well with both manufacturers and food retailers who are trying new varieties and alternatives.”
One area of novelty in the bakery arena is the combination of sweet and savory flavors. Such unique pairings, whether it’s a green tea macaroon, a salted caramel cookie or another inventive take on sweet and savory, can work in a range of products and can also include the addition of hot and spicy flavors.
Color, too, keeps things new and exciting in the baked goods arena, especially in the social media era. Vibrantly colored ingredients – exemplified in the recipe for blueberry cookies that went viral this summer on TikTok – are enticing to consumers who appreciate visual appeal as well as taste. Venerable brand Duncan Hines, from ConAgra Brands Inc., offers a brightly colored mix for Blue Velvet cake, while Pillsbury continues to add to its Funfetti brand, which is known for fun colors.
Duncan Hines also sought to meet the demand for color, experience and sentiment with its new baking kit collection. The line of ready-to-use kits consisted of five varieties: Fruity Pebbles Cake, Salted Caramel Brownie, S’mores Brownie, Cookies & Cream Cookie, and Cookie Dough Cookie.
Finally, another way to provide what many shoppers are keen on and distinguish a store’s offerings is to use local ingredients in the in-store bakery or even in the ingredient aisle. Items like regionally made chocolate or fresh berries sourced from a nearby farm can be enticing to discerning customers seeking fresh, unique foods. “It can be challenging for some retailers, but we’ve seen some stores that are sourcing things like wheat flour from local producers,” observed Richard. “I think you’ll see more of that, as people gravitate toward local.