Flavor and ingredient innovations and new eating occasions give bagels the opportunity to break out of basic breakfast categories.

KANSAS CITY — The bagel category is nothing if not consistent. According to the I.R.I. Group, annual sales for bagels in the 52 weeks ending Jan. 1, 2016, were only down 0.3%. Research by Experian showed that consumption of bagels in U.S. households from 2011-15 remained relatively unchanged. In 2011, consumption sat at 58% of U.S. households, and after some minor ups and downs throughout the year, that number settled to 60.9% in 2015.

These consistent numbers, however, do not mean that bagel producers should rest on the belief that innovation is unnecessary. Mintel’s September 2014 report on Bread and Bread Products revealed that more than half of survey respondents claim to be purchasing the same amount of bagels in the previous six months, but 23% of them said they are eating bagels less often while only 13% said they were consuming them more often.

Much of this can be attributed to consumers shying away from calories and reading more labels. Also, the way people eat breakfast and traditional breakfast foods is changing. Bakers can see these trends and shifts as either challenges or opportunities.

Nutritious and delicious

When consumer trend winds blow in the direction of nutrition, bread products tend to get blown right off consumers’ plates. Misinformation has people believing that bread, including bagels, carry too many calories with not enough nutritional bang.

“The category overall has suffered a bit from (bagels) being too heavy, too many carbs, too many calories, and I think it’s not necessarily a fair depiction,” said Ted Swain, senior brand manager of Thomas’ Bagels, a brand of Bimbo Bakeries USA. “If you don’t have enough (at breakfast), you’re forced to have more to eat. And bagels are a good enough breakfast that keeps you going all morning.”

That’s the positioning Thomas’ Bagels uses in marketing to its main demographic, households with children.

“Bagels are a great fuel for growing kids, and we look at active households with a lot going on,” Mr. Swain said. “It’s a great breakfast to keep you going all morning. We’ve been working on and trying to figure out the right message to tell consumers, and that’s a great one for us.”

Despite this messaging of carbs and their satiety power, the belief persists that fewer carbs and calories pave the way to a thinner waistline, and for those consumers, thin bagels continue to dominate as an alternative to the hearty boiled bread.

Thomas’ Bagels launched thin bagels about five years ago.

“A few years back, thin bagels started cropping up,” said Jerry Chizick, vice-president and general manager of Handi Foods. “They have grown exponentially and eaten into a large part of the market. Over the past five years, there’s been a real change with the introduction of the thin bagel.”

Mr. Swain echoed that idea with Thomas’ own bagel market breakdown.

“It’s a strong piece of our business,” he said. “I’d say the traditional-sized bagel is about 70% of our total business, and mini bagels and bagel thins are each about the same size market at 15% of the total. It’s a strong piece of business for us, for sure.”

Thomas’ Bagels launched thin bagels about five years ago. The product weighs in at 110 calories and targets women and younger consumers.

“It’s our answer for health and wellness,” Mr. Swain said.

Bagel thins aren’t the only way to appeal to the health and wellness crowd, however. Bagel bakers are starting to take advantage of another trend sweeping the bakery category: ancient and sprouted grains.

“Every product you look at, sprouted and ancient grains are hot,” Mr. Chizick said.

National Choice Bakery, based in St. Paul, Minn., is currently developing an ancient/sprouted grains bagel to take advantage of this market shift. According to Gerri Krenner, the bakery's sales manager, the goal is to combine great taste and wholesome qualities into one bagel.

Consumer preferences for sprouted and ancient grains also align well with other trends that guide National Choice Bakery’s product development. Ms. Krenner said the bakery produces a line of whole grain bagels and continues to source ingredients that will result in a cleaner label and appeal to consumers who prioritize that formulating style.



Outside-the-box flavors

Flavors are an easy way to spur consumers to purchase. New flavors and varieties cut through the noise and grab shoppers’ attention. Even louder are the limited-edition varieties, which are a safe way to shake things up.

“In general, what people are looking for with breakfast is something that can help break their routine,” Mr. Swain said. “They’re looking for new and interesting flavors. They want a breakfast that they can count on and something a little different than their standard routine.”

To deliver that, Thomas’ Bagels introduces limited-time-only flavors about every 13 weeks, and these are often scheduled based on seasonal relevance. The brand has seen success with Pumpkin Spice, Cranberry, Maple French Toast and Banana Bread, among others.

“The Plain, Blueberry, Everything, Cinnamon-Raisin — those are our big movers,” Mr. Swain said. “But we like to bring some news to the shelf and to the category, and that’s what we’re trying to do with our business.”

This steady rotation of flavors gives consumers an extra expectation to their shopping experience, what Mr. Swain called a “treasure hunt.” This prompts consumers to return to the bagel shelf more often than they usually would to see what’s new and interesting.

For National Bagel Day, Thomas’ Bagels introduced a flavor chosen by its Facebook fans. The overwhelming favorite was Lemon Blueberry, which launched Feb. 8. This limited-edition flavor will have a shorter run than most, being on shelves for only six weeks, but Mr. Swain said the company is excited to bring this interesting flavor to market.

Thomas' recently launched Lemon Blueberry bagels.

For other limited-edition styles, Mr. Swain said the brand often draws on the idea of home-baking to guide product development.

“We try to bring forward something that people might think they’re making at home,” he said. “It’s new and different and not something they’re going to necessarily find in the traditional bagel shop.”



Breakfast and beyond

Shaking up the category goes beyond new flavors and varieties. As consumers reinvent breakfast and traditionally breakfast-only foods, the bagel can find new eating occasions and ways to be consumed. Today, bagels are getting eaten but not necessarily at the start of the day.

“All-day consumption has changed both the volume and variety of bagels consumed,” Ms. Krenner said. This includes new topping ideas and bagels as a sandwich carrier.

Sixty-five per cent of survey respondents said they consume bagels as appetizers.

Data from Mintel’s Bread and Bread Products report confirmed bagels are a bread category that sees multiple uses. Survey respondents reported eating bagels as a part of an everyday sandwich (53%) and as a special-meal sandwich (59%). Bagels also became snacks between meals (66%) and appetizers (65%). Those who consumed bagels as a snack or appetizer were also likely to buy the same amount or more bagels in the past six months, the report stated. These eating occasions can guide new product development and open new opportunities for producers to reach beyond traditional breakfast dayparts.

Thomas’ Bagels has seen this happen organically among consumers.

“Whenever we talk to consumers, I’m really surprised — pleasantly surprised — at how often bagels are consumed outside of breakfast,” Mr. Swain said. “The primary usage for us, for sure, is in the morning, but we get a lot of people using our Bagel Thins for sandwiches during midday. Our mini bagels are a great snack for kids.”

The brand actively touts new snack and meal ideas on social media.

“One of the best posts we had on Facebook was around making garlic bread out of mini bagels,” Mr. Swain shared. “That’s the kind of thing that consumers aren’t always thinking about, and we’re trying as hard as we can to come up with new and interesting recipes, usage ideas, all those good things, wherever possible.”

One of Thomas' most popular Facebook posts suggested consumers could make garlic bread out of its mini bagels.

Consumers have even joined in, sharing their own creative bagel innovations on the brand’s Facebook page.

“I am continually surprised at the unique and fun ways that people are using our products,” Mr. Swain said.

Don’t count breakfast out, though. It still is the most obvious time to eat a bagel, and the grab-and-go breakfast can be an opportunity for bagels as well. It’s a food that is easily portable and eaten at a desk, or a new iteration that is more snack-style may be ready-to-eat on the road.

“You have every kind of concoction under the sun these days,” Mr. Chizick said. “It’s a challenge and an opportunity.”

Thomas' Bagels redesigned its package to connect the established brand with the bagel product.

Convey the right message

The package sells the product; that is true of bagels just as it is with any product. Packaging delivers the brand’s message and key nutritional information.

In the bagel category, Ms. Krenner said it’s more of a balance between showing off the product but also calling out the nutritional value of what’s inside. Marketing teams are moving away from graphics just for the sake of graphics and showcasing the bagels through clear packaging instead. However, with the movement toward delivering more nutritional value, marketing teams are also using the package to convey messages of health and clean-label ingredients.

Last year, Thomas’ Bagels redesigned its package for the first time in about a decade. This redesign was to create a stronger tie between bagels and the Thomas brand, often known more for its English muffins.

“One of the issues, for better or worse, with this business and brand is that consumers have a very strong connection to the brand as it relates to the Thomas’ English Muffins,” said Mr Swain. “What we really wanted to do was call out the word bagels and make a stronger connection between Thomas’ and bagels so it’s not just English muffins in consumers’ minds.”