The Power of Bakery 2019, an in-depth look at the retail bakery through the shoppers’ eyes, was updated with new consumer data at the International Baking Industry Exposition September 10 at the Las Vegas Convention Center.
The study, commissioned by the ABA in partnership with the Food Marketing Institute and sponsored by Corbion, looked at responses from 1,500 households and a Nielsen analysis of sales trends across a variety of outlets including grocery stores, club stores, dollar stores, mass merchandisers, supercenters, drug stores and convenience stores.
Sweet and Savory: A Look at the Numbers
In the grocery department, sales are fairly balanced across the top-selling major categories with desserts, sweet goods and snacks bringing in $8.5 billion in annual sales - just slightly ahead of bread. Cookies and crackers each bring in about $6.8 billion, followed by rolls and buns ($3.7B), wraps and tortilla shells ($2.4B) and cereal and granola bars ($2.0B). Within the in-store bakery, sales are dominated by desserts, sweet goods and snacks ($8.3B). Cookies is the next largest major category with $1.8B in sales and followed by bread ($1.6B) and rolls and buns ($1.2B). Year-over-year growth levels for the big categories in grocery were between 1 to 5% depending on the category, but most were in the 1 to 2% range. In the in-store bakery, there was much stronger performance with desserts and sweet goods, the biggest segment, up 3.4%, rolls and buns up 5.1%, cookies up 6.2%, cereal and granola bars up 19.4% and crackers grew 26.5%.
“So there’s a lot of interest in the in-store bakery as many of retailers are putting a lot more focus on in both the size of the department as well as how they merchandise and assort that part of the store,” Hale said. “When you look at what is driving growth in either the grocery department or the in-store bakery, a number of small sellers delivered big growth.”
In the in-store bakery the biggest growth was seen in donut party platters, at $63 million, which grew by 101%. Regular bagels, at $53 million, grew by 47%. Bulk bread, at $310 million, grew by 37%, crackers, at $27 million, grew by 33%. Croissants, at $344 million, grew by 25%.
Shopping the Aisle and In-Store Bakery
Most households shop both the aisle and the in-store bakery. When you look at exclusive shopping within functional items, 20% of consumers say they only shop the in-store bakery, another 20% say they only shop the aisle, and 60% say they shop both.
Indulgent and dessert items are much more likely to have exclusive buying in the in-store bakery (29%) relative to the aisle (19%), with a little over half at 53% saying they shop in both.
Hale said when you look at consumer perceptions at what’s important about the aisle vs the in-store bakery, consumers say that they know when they shop the aisle they’re going to get a good price. They’re going to see good nutritional information, and it’s going to be a convenient shopping experience.
In the in-store bakery consumers anticipate the product consistency is better; there’s a wider selection; more healthy offerings; better service because it’s clerk attended; better freshness, even though it may be prepared somewhere else and brought into the store; and better quality of ingredients and taste.
Study administrators also asked consumers, “How would you like to see the store designed?” Only 11% of consumers say they’d like a separate bread aisle in the center of the store and the in-store bakery in the perimeter, the way it is today.
“It’s easier said than done in terms of how we change that, but I think we have seen some activity by some retailers to enhance how we leverage both sides of the store in ways different than we done in the past,” Hale said. “We’re starting to see bakery flowing into deli, mixed in with pre-packaged grocery items like fresh pies mixed in with refrigerated dough products or cheeses and deli breads mixed together. Again, make it convenient and easy for consumers to say, ‘Hey, that’s something I can combine on a snack occasion or a meal occasion and you gave me an idea I didn’t have on my list.’”
This article is part of our series on the Power of Bakery 2019 Update. This post and the others give only a window into the the data available in the full Power of Bakery report, which is free to ABA Members. Others can receive it for a fee. Click here to access the full Power of Bakery Report.