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.
A Look at Bakery in the Grocery Department
Todd Hale, President of Todd Hale LLC and one of the co-authors of the report, presented statistics and strategies for baked goods sales success. Hale explained that the in-store bakery, a $14 billion business, is only part of the market since most bread and baked goods are sold in the grocery department, which is the largest department with $281 billion in sales.
“When you look at growth, it’s nice to see the bakery department delivered the third best 4-year compounded annual growth rate,” Hale said. “It also delivered the third best year-over-year growth, growing by 4.2% in dollar sales as of June 29, 2019, falling behind the deli department, which grew by 5.5% and seafood, which grew by 5.4%.”
Hale said that when you look at this in terms of the overall size of the in-store bakery, it doesn’t seem like it’s a very big part of the store. But in aggregate when you look across the store, and you combine that in-store bakery with the commercial bread and baked goods section and cookies and crackers, it’s about a $60 billion market in the U.S.
Bakery as a Grocery Store Driver
The study found that households are highly engaged in the overall category. Almost every household (99.9%) buys in the category at least once a year. In fact, bread and bakery bring shoppers to stores about once a week with 46.2 trips per household per year spending an average of $6.46 per trip.
“So there’s opportunity to leverage the aisle as well as the in-store bakery to drive engagement,” Hale said.
But that’s just the beginning with retailers placing baked goods throughout the store.
“If you think about how consumers think, consumers would like to make it easy to shop,” Hale pointed out. “Why do we have to shop around the store to build a sandwich? How do we get bread and baked goods closer to the meat department? How do we get bread and baked goods close to the deli department, the fastest growing department, or how do we engage the consumers in meal kits, a rapidly growing category, by adding bread items to those products as well?”
This article just scratches the surface of the data available in the full Power of Bakery report. Available to ABA Members as a part of membership, and others can access for a fee. Click here to access the full Power of Bakery Report.