Posted in Millennials on November 20, 2017
In-store bakery sales are on the rise—so much so, sales exceeded $13.54 billion in 2015 and the market is expected to reach $18.4 billion in sales by 2020, a 45% jump over the course of a decade.1 Confidence among retailers is high, with 56% of those surveyed reporting that they consider in-store bakeries a leading driver of traffic and an important point of differentiation for their stores and the way they market to consumers.2
Many retailers are making the connection between brand perception and profits when it comes to in-store bakeries. According to Progressive Grocer’s 2016 “state of the in-store bakery” study, two-thirds of bakery executives—almost double the number from the previous year—consider the presence of an in-store bakery a key “image builder.”1 Building space is keeping pace with building image. Growth in consumer demand is driving growth in size, with in-store bakeries expanding to an average 1,420 square feet in 2015, compared with 1,310 square feet the year before.1
C-Stores Rise and Shine to Breakfast Bakery Sales
Not to be outdone by groceries and QSRs, convenience stores are making fresh bakery offerings a centerpiece of menu innovation as they look for quick ways to add in-store bakeries.2 Breakfast is the daypart which may present the greatest growth potential for bakery items. With 478 million visits to grocery stores for breakfast meals and morning snacks and 1.6 billion c-store visits in 2016 alone, the stakes are high for breakfast sales growth through the integration of in-store bakeries.3
In keeping with better-for-you snacking trends among wellness-conscious millennials, the hottest growth area for in-store bakeries remains single- and smaller-portion bakery products, which lend themselves easily to portion control.2 As a result, individual cake slices, parfaits and cake pops are becoming increasingly popular snack choices.2
Specialty items and ingredients are in demand, from gluten-free grape seed flour to sprouted grain, quinoa and amaranth. And while local and regional offerings continue to generate interest, ethnic products such as tres-leches cake, dulce de leche and doughnut-like paczki are gaining ground.2
Chinese bakeries are a budding trend, driving sales of such single-serve pastries as small tarts, slices of Swiss roll cake and buns with red bean, roast pork, taro, cream and salted egg yolk fillings.2 “Ethnic explorers” interested in eclectic tastes and flavors are among the consumers in the core in-store bakery demographics, including affluent shoppers from large families, mature couples and empty nesters.2
The Icing on the Cake: Baking Better-for-You Business
Well-being concerns loom large for in-store bakery offerings. Slightly more than 47% of bakery execs cite gluten-free as a major growth area for their stores, and there is increasing interest among consumers in having complete nutritional information on bakery items.1 Organic and natural breads are also rising in popularity, with 36.8% of retail bakery panelists citing whole grain options as another key growth area.1
As Eric Richards, education coordinator for the International Dairy-Deli-Bakery Association, observed: “From healthier, fresh, and single-serve options, to ethnic-influenced and indulgent products, in-store bakeries are in the perfect position to connect with the evolving tastes and eating patterns of today’s shoppers.”2 By staying abreast of the consumer’s eating and purchasing trends, Richards said, in-store bakeries can expand their reach beyond traditional bakery shoppers to consumers in search of lifestyle-specific product offerings.2
Are you leveraging the fresh-baked snack trend to drive a higher check average? Find out how we can incorporate trusted brands and flavorful twists on traditional favorites into your baked goods to help sales rise at your foodservice operation.
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