A Lot of Dough: FMI and ABA Team up to Analyze the Power of Bakery
NAPLES, FL – American Baker’s Association (ABA) and Food Marketing Institute (FMI) today jointly released the inaugural Power of Bakery report that assesses this colossal grocery category, which falls between produce and frozen in terms of retail sales. The results of the analysis, unveiled at the ABA Convention in Naples, Fla., share consumer perceptions, attitudes and behaviors regarding the bakery category in a grocery retail setting. The findings help the baking industry partner with retailers to optimize production, marketing, merchandising and branding decisions.
According to the report, 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 and indulgent items. Bakery is one of the biggest drivers for in-store trips, bringing shoppers to the store nearly once a week, yet opportunities exist for retailers to increase consumption frequency and household penetration across individual categories.
Indulgence and the Power of Emotion Rule in Bakery
As witnessed in many of the grocery perimeter departments, 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.
FMI Vice President, Fresh Foods, Rick Stein, said, “Indulgence is a clear sales driver in fresh bakery, claiming 76 percent of the total department sales, and the analysis highlights the importance of segmenting audiences to better align innovation, merchandising and marketing. For instance, given that Millennials are nearly twice as likely to exclusively shop the in-store bakery as Boomers, at 30 percent versus 17 percent, carrying and highlighting desirable product attributes and claims may help drive sales and loyalty depending upon your store’s demographic.”
The survey also shared that top-of-mind “bakery” word associations are dominated by positive terms that convey emotion, such as “yummy” or even “love.” While it remains important to meet consumers’ desires for functional attributes, the data shows there is power in satisfying a customer’s emotion to drive sales.
Rising to the Occasion for the Shopper
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 percent, prefer pre-packaged items but with the ability to personalize. While most shoppers believe scratch baking delivers superior quality, 57 percent are indifferent to their store using partially-prepared/baked ingredients.
President and CEO of the American Bakers Association, Robb MacKie, said, “Consumers are clearly looking for healthy ingredients to drive their dietary habits and bakers will need to leverage their products’ positive health attributes. 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.”
Shoppers Say When It’s Fresh
“Fresh” is the universal winner of production-related claims that matter to consumers, mentioned by seven-in-10 shoppers overall and nearly eight-in-10 Boomers. “Fresh” and “baked today” are easily the two most popular production-related claims out of the list of 12 options. When asked to define freshness, particularly as it relates to functional bakery items, shoppers first point to the date and time.
The Power of Bakery 2019 was conducted by 210 Analytics and ToddHale, LLC. It was produced with generous support by Corbion.
- Media may request a gratis copy of the Power of Bakery by contacting FMI and/or ABA media contacts.
- An infographic is downloadable here.
The American Bakers Association (ABA) is the Washington D.C.-based voice of the wholesale baking industry. Since 1897, ABA has represented the interests of bakers before the U.S. Congress, federal agencies, and international regulatory authorities. ABA advocates on behalf of more than 1,000 baking facilities and baking company suppliers. ABA members produce bread, rolls, cookies, crackers, bagels, sweet goods, tortillas and many other wholesome, nutritious, baked products for America’s families. The baking industry generates more than $153 billion in economic activity annually and employs more than 799,500 highly skilled people. www.americanbakers.org
Food Marketing Institute proudly advocates on behalf of the food retail industry, which employs nearly 5 million workers and represents a combined annual sales volume of almost $800 billion. FMI member companies operate nearly 33,000 retail food stores and 12,000 pharmacies. FMI membership includes the entire spectrum of food retail venues; single owner grocery stores, large multi-store supermarket chains, pharmacies, online and mixed retail stores. Through programs in public affairs, food safety, research, education, health and wellness and industry relations, FMI offers resources and provides valuable benefits to almost 1,000 food retail and wholesale member companies and serves 85 international retail member companies. In addition, FMI has almost 500 associate member companies that provide products and services to the food retail industry. For more information, visit www.fmi.org and for information regarding the FMI Foundation, visit www.fmifoundation.org.
Corbion creates innovative ingredient solutions for leading food manufacturers around the world. Our expertise inspires customers to craft foods that start flavorful, stay fresh and remain safe, from date of production to date of consumption. Using sustainable solutions that deliver real, consumer-focused value, we work side-by-side with customers, helping them grow and create delicious food that capture peoples’ palates and earn their trust. At Corbion our priorities as consumers shape the solutions we create, and as a result, feel confidence and pride in serving our own families and friends the products we help make possible.