Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News
Sponsored By
Whether fresh or center store, baked goods drive sales
New ‘Power of Bakery’ report looks at the $59 billion category
3 Min Read
Bakery continues to be one of the biggest drivers for grocery trips, bringing shoppers to the store nearly once a week, according to the inaugural “Power of Bakery” report from the American Baker’s Association and Food Marketing Institute. And yet opportunities exist for retailers to increase consumption frequency and household penetration across individual categories, the report concluded.
Total bread and baked goods sales surpassed $59 billion in 2018, split between the fresh bakery department and items located in the grocery, frozen and dairy departments. In-store bakery sales were $13.8 billion and are dominated by desserts, sweet goods and cookies, whereas center store sales are more evenly balanced between functional (breads, buns and rolls) and indulgent items.
Power of Bakery 2019; American Baker’s Association;
Food Marketing Institute; Nielsen Retail Measurement
Total bread and baked goods are purchased by nearly every U.S. household (99.9% household penetration) and bring shoppers to stores nearly once per week with 46.2 trips per buyer — almost at the same level as the dairy department (46.8 trips) and above produce (43.6 trips), and much greater than all other edible departments.
Bread and baked goods sold in the in-store bakery department attract a lot of shoppers, too (94.4% penetration), but annual shopping trips (13.5) are almost three times lower than grocery department bread and baked goods trips.
The report notes that a significant numbers of shoppers have a dual-store strategy, in which they purchase center store groceries in one store and bakery items in another. Channel switching is highest for special-occasion items, such as birthday cakes/cupcakes, and lowest for functional items. Stand-alone bakery specialty stores take a majority share of the switchers across all three categories. Thirty-seven percent of shoppers typically purchase indulgent bakery items at a place other than their primary store. Being a top-of-mind bakery destination is important to capture the category’s many trips among primary and secondary shoppers.
“Indulgence is a clear sales driver in fresh bakery, claiming 76% of the total department sales, and the analysis highlights the importance of segmenting audiences to better align innovation, merchandising and marketing,” said Rick Stein, FMI vice president, fresh foods. “For instance, given that Millennials are nearly twice as likely to exclusively shop the in-store bakery as Boomers, at 30% versus 17%, carrying and highlighting desirable product attributes and claims may help drive sales and loyalty depending upon your store’s demographic.”
Power of Bakery 2019; American Baker’s Association;
Food Marketing Institute; Nielsen Retail Measurement
Shoppers’ view on the importance of having someone to help with questions or purchases highly depends on the type of item purchased. More than three-quarters of shoppers want the ability to personalize, but this does not necessarily mean items need to be made from scratch to shoppers’ personal preferences. In fact, the greatest share, at 42%, prefer prepackaged items but with the ability to personalize. While most shoppers believe scratch baking delivers superior quality, 57% are indifferent to their store using partially prepared/baked ingredients.
“Consumers are clearly looking for healthy ingredients to drive their dietary habits, and bakers will need to leverage their products’ positive health attributes,” noted Robb MacKie, president and CEO of the American Baker’s Association. “However, bakers and retailers need to connect with consumers, give them opportunities to smell, touch and taste their products. That is what drives the emotional connection to the category, regardless of product segment.”
About the Author
You May Also Like
