Top 50 in-store bakeries: In-stores 'freshen' image

Advertisement What a difference a decade makes. In 2002, the Top 50 wasn't markedly different than it is today, but the supermarket industry was coming off several years of mergers and acquisitions that had a profound effect on in-store bakeries. With the new, national chains, many regional names disappeared or the bakeries' product lines were altered significantly. The ensuing 10 years were a time of adjustment as many chains began to understand that cookie-cutter bakeries weren't necessarily what customers wanted. While supermarket chains are still growing and acquiring new stores and markets, only a few major acquisitions/divestments appear to be the works. Earlier this year, Bi-Lo, with 207 locations and the same number of bakeries, acquired Winn-Dixie Stores, which has 483 units, all featuring bakeries. Bi-Lo indicated it could take up to a year before the integration of the companies is complete. Cerberus Capital Management, which purchased more than 600 Albertsons locations when that chain was sold, is looking to purchase Supervalu, which operates the remaining Albertsons locations among other banners. Cerberus would then put the various Supervalu banners, such as Jewel-Osco, on the block. Supervalu also announced earlier this year it plans to shutter 60 underperforming stores. Whole Foods opened 25 stores during its fiscal year 2012, which ended Sept. 30; and the chain plans to open about 30 more in 2013 and an additional 25 in 2014. The key to its growth is a focus on smaller format stores based on Wild Oats Markets, which it acquired in 2007. Walmart plans 125 new supercenters in 2013 and about 100 of its smaller format Neighborhood Market stores, which will further solidify its place as the largest grocer in the United States. In 2002, Walmart was ranked fifth in the Top 50 In-store Bakeries, behind number one Kroger, followed by Albertsons, Food Lion and Safeway. Several chains, including Supervalu, Kroger and Safeway, closed more stores than they opened in the past year, according to Modern Baking's sister publication Supermarket News. However, many are choosing to focus on formats that have expanded fresh departments, good news for in-store bakeries. In-store bakeries brought in about $7 billion in sales in 2012, according to Nielsen Perishables Group. Click image at left to view larger version of Top 50 tables. Importance of fresh "Fresh has taken off in retail," Jonna Parker, director of account services, Nielsen Perishables Group said during a presentation at All Things Baking in Houston. The five fresh categories in supermarkets, which include the in-store bakery, outsell grocery, she added. Bakery was one of only two fresh departments to grow in both dollar and unit sales this year (deli was the other), and since 2007, bakery has grown more than 5 percent annually, Parker said. The fact that bakery continues to grow adds credence to the adage that bakery is a recession-proof department. "People will give up a lot of things but they won't give up their favorite cookie or coffee," says Christina Jessie, bakery sales manager, Market of Choice, Eugene, Ore. "I just am really surprised at how our sales have stayed strong. We haven't shown any downturn at all until this last year; we're still showing an increase but it's not as big of an increase. Up until this last year, we were at about a 5 percent increase over the year before." Jessie credits much of the growth to Market of Choice's commitment to scratch baking and a focus on local ingredients–a trend that seems to be reaching even the larger chains. For several years, many of the smaller supermarket chains, such as Market of Choice (8 locations), Dorothy Lane (3) and Harmons (16) have featured scratch bakeries, making everything from artisan breads to pastries, but that trend is starting to trickle up to some of the Top 50 chains as well. A scratch artisan bread program, using starters, isn't easy to accomplish in an in-store environment. "Sourdough was something that someone told me I couldn't accomplish, but I did," Jessie says. "We introduced the starters about four or five years ago."