What's fueling in-store bakery growth?

The five fresh departments have taken off in U.S. supermarkets and bakery is one of two departments (the other is deli) that is experiencing grown in both dollar and unit sales, said Jonna Parker, Nielsen Perishables Group during her presentation entitled Fresh Bakery's Opportunity: Understanding How to Reach More Consumers More Often during All Things Baking in Houston. Since 2007, bakery has grown every year by 5 percent, she adds. The top sales generators in the in-store bakery department are cakes and breads/rolls. While the dollar share hasn't changed, the types of products being offered has. Some of the biggest trends are portion control with smaller packaging sizes, take-and-bake items that offer customers fresh product at their convenience, expanding flavor profiles (flavors are no longer "regional" but national), nostalgic products and gourmet indulgences. The products really driving growth are cupcakes (not a surprise) with 1- and 2-ct. packages selling well and bulk donuts that allow customers to buy one or two at a time instead of a package of a dozen. So who is buying from the bakery and often? Ninety-four percent of all supermarket customers have purchased from the bakery in the last year. And in-store bakeries customers run the gamut of the supermarket customer from singles, couples and families to value, mainstream and premium minded consumers to those looking for on-the-go products and fine quality foods to those living healthful lifestyles. Essentially all consumers are in-store bakery customers. On average, the in-store bakery customer makes 13 trips to the bakery and spends on average $59 a year. One of the more surprising statistics Parker shared was that 33 percent of all in-store bakery sales occur after 5 p.m. when people are making that stop after work before heading home. What this means for retail bakeries is if you're closing at 5 or before, you are missing out on potential sales, Parker said. Those customers shopping the in-store bakery could also be shopping retail bakeries if they were open. However, for customers shopping the in-store bakery, only 12 percent purchased from more than one category in a single trip. So, they are only buying a cake or baguette, but not both. Two segments of customers have the most buying power and account for 20 percent of sales: premium, healthy living couples and quick, on-the-go quick cooking families. What types of products appeal to both? Muffins, pies, rolls and sweetgoods, Parker said. Bakery success is about understanding and appealing to your customer; figure out the right product mix for your location-something even retail bakeries can benefit from.