The in-store bakery has a reputation as a destination for indulgences, said Jana Mickey, director of Nielsen’s Perishables Group.
“However, that doesn’t mean consumers want to throw all caution to the wind when shopping in this department,” she said.
“While some healthful products like sugar-free muffins have been around for years, consumers are now seeking other healthy items, similar to what we see in the center store,” she said. “Health claims like gluten free, organic and no artificial ingredients are important to consumers, and the ISB is no different.”
In the past year, many health claims have grown significantly in the in-store bakery, primarily driven by brands, Mickey explained. Products with health claims in the in-store bakery grew 28% from 2011 to 2015.
“While these items represent a smaller percentage of overall bakery sales, the consumer demand is there,” she said. “Older cohorts, a key bakery demographic, have a special interest in health and wellness.”
Nielsen recently conducted a study on what top-performing fresh retailers are doing differently, and in-store bakery is an area where the top retailers are excelling, Mickey said.
“They focus on bulk selection, allowing consumers to pick out their products, and index high in artisan breads and other breads,” she said.
She suggested that retailers focus on the specific customer groups who shop each store, noting the high-income households are particularly important to the in-store bakery.
“These shoppers are looking for premium products, new exciting flavors and offerings,” she said. “Because these shoppers have a lot of disposable income, making the bakery a shopping destination for them is a great opportunity to grow the department.”
Many of the fastest growing categories in bakery are those that provide an indulgent treat, she said. These include mini pies and mini desserts, with five-year compound annual growth rates of 18% and 6% respectively.
“Cupcakes and dessert cakes have also risen to meet consumers’ needs with on trend flavors,” Mickey added, citing five-year compound annual growth of 8% and 3%, respectively.
Retailers that are doing well with bakery are doing things such as icing cakes in front of consumers and wrapping loaf cakes while still warm, she said. Offering mix-and-match cookie programs that allow shoppers to engage with the bakery is another winning strategy, Michael added.
“It’s not just having the right assortment — products more and more almost need to jump off the shelves at consumers,” she said.
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