The bagel chill
Feb. 5, 2013
by Eric Schroeder
When it comes to the bagel category, it appears consumers are “keeping it cool.”
Dollar and unit sales in both the fresh and frozen bagel categories declined in the 52 weeks ended Dec. 30, 2012, according to SymphonyIRI Group, a Chicago-based market research firm, but sales of refrigerated bagels increased.
In the 52 weeks ended Dec. 30, dollar sales in the refrigerated bagels segment totaled $124,540,900 on unit sales of 78,143,950, up 1% and 0.82%, respectively, over the same period a year ago, according to SymphonyIRI.
Growth in the category was paced by Pinnacle Foods Group L.L.C., Parsippany, N.J., which through its Lender’s Bagel brand saw dollar sales increase 8% during the period. With more than $70 million in sales, Lender’s flagship Bagel Shop Bagels brand experienced an 8% increase in dollar and unit sales during the period. The products carry a distinctive “Stays fresh longer than bread aisle bagels” tag front and center on product packaging, perhaps indicating why consumers are trending toward the refrigerated category.
Several other products are making a mark in the refrigerated case for Lender’s as well. The company’s partnership with Cinnabon has resulted in strong sales for Lender’s Cinnabon bagels and Little Lender’s Cinnabon bagels, and the recently introduced Lender’s Healthy Grain bagel brand already is approaching $1 million in sales.
Available in two varieties — multi-grain and oat — the Healthy Grain bagels contain more dietary fiber and protein than the company’s other bagels.
Variety has helped key growth at Minnetonka, Minn.-based Crystal Farms, Inc., the second-largest refrigerated bagel company with sales of $23,645,170. Dollar sales increased 6% in the 52 weeks ended Dec. 30, according to SymphonyIRI. In addition to traditional blueberry, plain, cinnamon raisin and egg bagel varieties, the company, through its David’s Deli brand, also has recently introduced an “everything” bagel, french toast, multi-grain and Tuscan herb. Crystal Farms is owned by Michael Foods.
Fresh is by far the largest segment of the bagel category, and in the 52 weeks ended Dec. 30, dollar sales of fresh bagels totaled $814,369,900, down nearly 3% from the same period a year ago. Unit sales also were down almost 3% in the period.
The drop-off in the category could be traced to dollar and unit sales declines in seven of the eight largest brands, according to SymphonyIRI. Of the eight brands, seven are owned by either Bimbo Bakeries USA, Horsham, Pa., or Pepperidge Farm, Inc., Norwalk, Conn., the two largest fresh bagel vendors. Dollar and unit sales of fresh bagels were down 3% at Bimbo Bakeries USA in the 52 weeks ended Dec. 30, while they dropped 25% and 35%, respectively, at Pepperidge Farm during the period, according to SymphonyIRI.
Smaller niche companies appeared to fare better in the fresh category during 2012, as dollar sales soared 400% to $7,644,972 at United States Bakery, Portland, Ore., and jumped 50% to $7,120,378 at Udi’s Gluten Free Foods, Denver.
Udi’s in November introduced two new bagels: the Everything Inside Bagel and the Mighty Bagel. The Everything Inside Bagel contains poppy seeds, onion, salt, garlic, millet and flaxseeds. The Mighty Bagel combines cranberry, quinoa, sunflower seeds and pepitas.
Portland, Ore.-based United States Bakery has received its boost from the launch of the Franz New York Everything Bagel, which, among other things, includes sunflower seeds, malted barley flour, poppy seeds, and sesame seeds.
Frozen falling fast
As consumers have turned to the growing refrigerated bagel category, interest in frozen has waned. In the 52 weeks ended Dec. 30, dollar and unit sales fell 7% and 10%, respectively. Lender’s, which accounts for about 50% of the category’s dollar sales, experienced a 13% decline in dollar sales and a 16% drop in unit sales during the period, according to SymphonyIRI. Meanwhile, the second-largest company, Ray’s New York Bagels, suffered a decline of 9% in dollar sales and a 17% drop in unit sales.
Consumers appeared to be most inclined to choose private label when shopping the frozen bagel aisle, as dollar and unit sales increased 14% and 6%, respectively, during the period.
Bagels for health
LAKEWOOD, COLO. — Einstein Bros. Bagels and Noah’s New York Bagels last month rolled out a trio of whole grain bagels.
The Super Grains line includes a 100% whole wheat bagel with honey; a nine-grain bagel made with quinoa, barley and rye; and a protein bagel containing dried fruit and sunflower seeds, with more than 14 grams of protein.
The bagels were introduced in response to the success of Einstein Noah’s smart choices menu, which came out last year and includes salads, low-fat smoothies and sandwiches made with thinner bagels.
“We recognize the importance of providing guests with choices that cater to their dietary needs and active, healthy lifestyles,” said Jeff O’Neill, chief executive officer for Einstein Noah Restaurant Group.