Bread and Beyond: In-Store Bakery Trends
Baked goods are a staple in many households, with 94% of shoppers indulging in bakery items at least occasionally and more than half doing so weekly, according to Arlington, Va.-based FMI – The Food Industry Association. FMI research also shows that household penetration for in-store bakery is above 80%.
With such universal shopper appeal, it’s no surprise that fresh bakery items, particularly fresh artisanal breads, have become a key differentiator for supermarket operators. “The appeal of artisanal bread continues to grow as consumers seek high-quality, better-for-you breads that taste great and have clean, recognizable ingredients,” says Brie Buenning Sr., director of marketing at Los Angeles-based La Brea Bakery.
Buenning adds that artisan breads made with milled flour, extra-virgin olive oil and other ingredients that create bold, authentic flavors appeal to health-conscious shoppers who are increasingly scrutinizing labels for cleaner ingredients.
FMI research indicates that two-thirds of shoppers pay attention to at least one nutrition-related or ingredient-related claim when purchasing functional bakery items. Whole grain is the top claim that shoppers seek out, and consumers are also avoiding artificial flavors and colors.
Grocers Offer More Variety
To capture the interest of the more discriminating bakery customer, the ShopRite location in Fair Lawn, N.J., stocks breads under its ShopRite and Bowl & Basket labels, including brioche breads and rolls, plus a variety of breads from NY Brooklyn Bread. ShopRite is a banner of Keasbey, N.J.-based Wakefern Food Corp. Data from Chicago-based consumer insights firm Circana shows that croissants, buns and rolls are driving sales in the perimeter bakery.
Retailers are also adding more plant-based and gluten-free options. One example of this is the Denville, N.J.-based Avocado Bread Co., which recently launched a line of avocado-based bakery items, which includes sliced bread, dinner rolls, ciabatta buns, and take-and-bake Italian bread and bagels.
The sourdough segment remains a category star, with impressive growth across the country and some markets seeing double-digit dollar and unit growth, according to Reed Immer, director of sales and marketing at Chabaso, a New Haven, Conn.-based bread company. Immer credits at-home breadmaking during the COVID-19 epidemic with a growing interest in sourdough and artisan breads, in response to which grocers are adding more par-baked artisan breads to their selections.
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“Fresh breads in the bakery continue to perform well with consumers,” notes Nicole Nelsen, director of retail foodservice at Minneapolis-based General Mills Foodservice. “Retailers that focus on baking fresh daily and providing a high-quality product to consumers will continue to win in the marketplace. The consumer is more and more discerning, and they expect to see fresh- baked bread in the bakeries of their grocery stores.”
To help retailers with limited time and resources provide the fresh-baked products that consumers desire, General Mills Foodservice offers a line of Pillsbury frozen bread dough designed to suit various back-of-house operations, without the need for a proof box.
New Flavors Entice Consumers
As culinary preferences become more global, in-store bakeries are expanding their offerings to include bold international flavors that reflect an increasingly diverse and adventurous consumer base. “Ingredients such as turmeric, matcha, masala and pistachio are gaining prominence, catering to curious consumers eager to explore new taste experiences,” says Buenning. “This growing interest, fueled by social media, has encouraged in-store bakeries to experiment with unexpected ingredient pairings, often blending sweet and savory.”
Buenning believes that as consumers seek deeper connections through food, international flavors will continue to shape the in-store bakery. For example, bakers are increasingly experimenting with fermented ingredients, such as miso, in pastries. “These naturally leavened and cultured creations deliver distinctive tangy notes and also align with growing consumer interest in gut-friendly foods and clean-label offerings,” says Buenning.
Consumers are seeking products that blend the familiar with the novel — a trend Buenning calls “newstalgia,” adding, “Breads, buns and pastries that incorporate classic flavors with a contemporary twist, such as Hatch chili and cheddar, Parmesan with Truffle honey, and garlic bread with Calabrian chili, give consumers comfort and an element of surprise in their shopping carts.”
Consumers Still Crave Indulgence
On the sweet side of the perimeter bakery department, data from Circana indicates that cookies, cakes and brownie/squares/bars are all driving sales. “Desserts led the way, with massive growth on pies and cobblers over the holiday season,” affirms Nelsen.
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“Ultimately, consumers want something sweet and indulgent,” adds Betsy Kelly, consumer insights associate for the bakery channel at General Mills Foodservice. “To keep in line with their desire for both health and indulgence, we are seeing success in smaller portion sizes and individually packaged items within the bakery.”
Indeed, a recent report from Chicago-based consumer insights firm Mintel cites “smaller-scale formats like single-serve or bite-sized options” as a key opportunity for supermarkets. Offering products that appeal to households of all sizes — particularly the growing number of smaller-sized households — is an important factor in the category.
Kaitlin Dietrich, client insights consultant for Circana, agrees. “Perimeter bakery categories are seeing a steady increase in random-weight (bagel, doughnut, bun and roll, pastry sections) sales post-COVID as they allow consumers to choose their own quantity,” says Dietrich. “This allows for more control in levels of indulgence, and smaller portions for smaller-sized households.”
Retailers are adjusting their offerings to ensure that consumers have plenty of fresh-baked treats to choose from. Last year, The Kroger Co., based in Cincinnati, reformulated its Private Selection buttercream cakes, cinnamon rolls, cinnamon crumb cake, croissants and store-baked chocolate chip cookies.
Since impulse is a key driver in bakery purchases, especially for indulgent items such as doughnuts, single-serve desserts and cookies, sales and deals are particularly important in this department. Mintel’s report notes that “social media engagement, daily specials and even in-store experiences can draw consumers into the in-store bakery and inspire intentional visits to this department.”
Fixturing and strong merchandising is critical to a high-performing bakery department. Nelsen notes that having a “just enough” assortment eliminates the paralyzing effect of too much choice in bakery categories and creates a more efficient shopping experience for consumers.
“Streamlining assortment is important for retailers,” she observes, recommending that retailers offer “a core assortment with just a sprinkle of new and seasonal items” for an “intentional approach that pushes consumers through the department to ensure they see the full assortment and maximize opportunity for impulse purchases.”
A Breakfast Destination
The bakery is also winning share of the breakfast occasion, with breakfast bakery showing growth in November and December 2023, according to Nelsen. Croissants were the top breakfast seller, she says.
“We’ve seen big shifts in consumer eating habits around breakfast bakery,” notes Kelly. “Breakfast at home continues to grow post-pandemic, and we’ve seen the hours at which breakfast items are consumed transcend from a.m.-only to p.m. We’ve also seen breakfast be replaced by a snack, which is a perfect fit for a bakery item, making bakery items on the grocery list across dayparts.”
