ATLANTA — In an annual poll of American Bakers Association members, about 200 bakers were evenly split on what keeps them up at night. If it wasn’t the issue of government regulations (40%), it was the changing consumer attitudes of bakery products (40%).
And it seems that consumer attitudes are often what drive changes in the baking industry. And in the past few years, categories such as cookies and crackers have experienced growth in terms of increased sales.
|Robb MacKie, president and c.e.o. of the A.B.A.|
“I know it’s a competitive, tough marketplace, but the overall news is positive,” said Robb MacKie, president and chief executive officer of the A.B.A.
So when considering what’s driving sales growth in the baking industry, it’s worth examining how the private label and branded segments have changed over the past few years, Mr. MacKie said.
“Five or six years ago, private label was on the upward trajectory,” he said, “and while it’s still seeing a little bit of growth, it’s sort of flattened out.”
He attributes that to economic growth allowing consumers to start “trading back up” from the choice of private label during the recession. As a result, private label has once again become more of a value proposition in consumers’ minds.
Today, when consumers are back in a better position to make a choice: Where does private label win, and where do branded products prosper?
Mr. MacKie suggested that private label baked foods do better when there is lower brand equity in a product category, higher price sensitivity and less innovation happening in the branded landscape.“Brands win when there’s innovation going on — when you bring new products to the line with high product differentiation and strong brand quality,” he noted, advising cookie and cracker manufacturers, “Don’t underestimate the power of your brands.”