The food industry can better capitalize on bakery’s allure with consumers by making bigger commitments and customizing strategies across sales channels.
That was the reaction of industry leaders to a groundbreaking new study from American Bakers Association and Food Marketing Institute called, Power of Bakery. The study revealed deep consumer connections to bakery and relayed avenues for advancing engagement.
At the recent American Bakers Association Convention in Naples, Fla., Robb MacKie, ABA President and CEO, co-moderated a panel of industry executives in a session called, “Tapping Into the Power of Bakery.” He asked panelists how the industry can make use of the consumer study’s insights to drive growth across channels, including retail, foodservice, and e-commerce.
“Bakery can be a bigger profit driver, but it starts with commitment and creating a new culture,” said panelist Rainer Glaubitz, International Commercial and Food Services Manager, SPAR International. “Food retailers need to utilize bakery more strategically. They need to bring categories together, with in-store fresh and the aisle, to make more of a combined shopping experience. That can add a percent or two of extra sales with minimal investment. And we need to bring bakeries to the front of our stores, to hit the shopper more frequently before and after the main shop.”
Achieving new levels of growth will require a better understanding of consumer needs across different buying occasions, said panelist Sam Mayberry, President, Sam Mayberry Consulting, LLC.
“We need to meet consumers in their new space, because the meal occasions have changed,” he said. These occasions have gone beyond breakfast, lunch and dinner, to now include others in between, he explained.
“Each occasion requires different products by generation, and products that are unique for each instance,” he said. “You need to start by understanding who you are trying to reach.”
The changing mix of products coincides with increased overlaps between sales channels, especially between retail and foodservice.
“There’s a blurring of lines between retail and foodservice that is going to continue,” said panelist Matthew Riddleberger, Vice President of Supply Chain Services, Firehouse Subs.
He noted that his fast casual restaurant operation has been honored for being the top sandwich brand in America, and expressed surprise that recently a convenience store chain, Wawa, won a major award for favorite U.S. sandwich outlet.
“That is eye-opening, that a best sandwich award went to a C-store,” he said. “It shows that a C-store is now no different than a QSR or fast casual outlet.”
Tracking Ecommerce Trends
The Power of Bakery Research delivered insights on a wide range of topics, including health callouts, perceptions of ‘fresh,’ and channel choices, including online ordering.
Mayberry said ecommerce provides a new opportunity for the industry to expand the reach of bakery items.
“Consider the case of ‘Killer Brownies’ from Dorothy Lane Market,” he said, pointing to a signature item from the three-unit gourmet supermarket retailer based in Dayton, Ohio. “Dorothy Lane now sells these brownies online. So you can go outside of your trade area with the right products targeted for the right opportunities. Ecommerce allows you to do this.”
Examining Supplier Partnerships
Panel co-moderator Leslie Sarasin, who is President and CEO of Food Marketing Institute, asked about the importance of suppliers becoming students of a customer’s business, and posed the question, “What is a best-in-class supplier partnership?”
Riddleberger said partnerships won’t succeed unless a supplier is well versed on a customer’s operation.
“You need to understand our business,” he said. “Suppliers need to do their homework about us, and then come to us with ideas. They need to understand we face labor and distribution challenges. They need to start with a conversation rather than a Powerpoint deck.”
Gaining Trust with Blockchain
Food categories can’t be powerful without consumer trust, including in food safety. One of the key emerging strategies is Blockchain, a technology that can boost safety practices across the supply chain, said speaker Howard Popoola, Vice President of Corporation Food Technology and Regulatory Compliance, The Kroger Co. in a presentation at the ABA Convention.
Blockchain can help battle food safety and food fraud, and enhance transparency, by creating an encrypted chain of information accessible to key stakeholders. The result will be faster and more effective reaction to problems, Popoola said.
“We will need the industry to line up behind blockchain,” Popoola said. “Kroger is in the forefront of driving this.”
He said the U.S. is impacted by $100 billion in costs associated with foodborne illness, and cited a string of outbreaks and recalls in recent years. Blockchain is relevant because it represents a better approach to attacking this, he added.
“Data sits in silos, but blockchain creates an enabling environment for interoperability in what everyone is doing,” he said. “We need better visibility and management of product.”
-About the Author- David Orgel is an award-winning business journalist, food industry expert and speaker. He currently is the principal of David Orgel Consulting LLC, delivering strategic content and counsel to the food, retail and CPG industries.