Bakers find growth opportunities in providing portable breakfast options for on-the-go consumers.

The way people buy food is changing. Supermarkets are no longer just a place to stock-up on staples, but a destination for a culinary experience, and c-stores and dollar stores are now common places to purchase groceries and not just snacks. People are looking for convenience, freshness and quality, and it’s altering the way people interact with the traditional places they purchase food.

Among c-stores, dollar stores, drug stores, supermarkets, Nielsen reported that only c-stores and dollar stores grew in number of locations from 2016 to 2017 with 0.3% and 5.2% growth, respectively. Jeanne Danubio, executive vice-president, retail for lead markets at Nielsen, attributed this to c-stores’ innovation and investments in food purchases.

“All of these factors have enabled convenience stores to meet the needs of consumers, stretching far beyond the pump,” she said. “This shift must continue to further expand c-store’s relevance in today’s changing retail landscape.”

The perimeter of the grocery store is experiencing growth by tapping into consumer demands for freshness.

In more traditional retail outlets such as supermarkets, Nielsen’s research showed that sales at brick-and-mortar center stores declined in the 52 weeks ended July 1, 2017. Most of the growth in supermarkets wasn’t driven by center aisle sales but the perimeter, a trend that has been growing for years. Sales for supermarket fresh categories were up 0.6% while dollar sales for center store were down 0.9%.

“This isn’t specific to bakeries, but the overall shopping pattern is focused more and more on fresh and the fresh perimeter,” said Eric Richard, education coordinator, IDDBA. “That area is experiencing growth, much more than the center aisle.”

In this shifting landscape, it can be difficult to leverage these outlets for the best opportunity at growth.

“There doesn’t seem to be any singular channel knocking it out of the park, but there are pockets of strength in each major channel,” said Wade Hanson, principal, advisory practice, Technomic. “This emphasizes to us the need for channel and account prioritization more than ever.”

To maintain balance and keep their feet grounded in the sands of change, commercial bakers need to zero in on their customers’ priorities and consumer preferences and adapt to meet them.

Consumers want options that are portable and easy to eat while they are on-the-go.

Portion-control and grab-and-go
In the traditional channels, products that are packaged for convenience and portion control are finding a place in shoppers’ baskets. Between busy lifestyles, smaller households and concerns about weight management, consumers are looking for smaller sizes.

As reported in IDDBA’s “What’s In Store 2018,” Global Data found that 63% of Americans say eating smaller portions is their preferred action to lose weight, and Nielsen Fresh found that miniature product sales were up 8% between 2015 and 2016, totaling almost $900 million.

“It seems like one of the more popular ways that in-store bakeries are responding is by offering smaller sizes, which allows consumers to indulge on more measured terms,” said Tom Vierhile, innovation insights director, Global Data, in “What’s In Store 2018.”

Dawn Foods, Jackson, Mich., sees this movement reflected in its own sales growth. The bakery, which serves many supermarket in-store bakeries, has seen an uptick in demand for individual desserts, particularly cakes and brownies. In fact, this is the fastest growing category for Dawn Foods.

“Consumers can feel like they’re rewarding themselves,” said Keith Solsvig, director of channel marketing. “The small container lets them feel good about a small treat.”

Donuts with innovative ingredients bring something new to the table as well as a treat for the individual or a treat to share.

It’s also a way for in-store bakeries, or any channel, to capture sales from households, which have been consistently shrinking as families are having fewer children.

“People are no longer shopping for enough food to feed a family of five,” Mr. Richard said. “Single-family, two-person households are at the highest levels I think they’ve ever been in this country. We’ve seen greater interest in smaller-sized pies for one or two people as opposed to serving eight. We’ve seen smaller cakes, half-loaves of bread, even several slices of bread packaged for those who may just want to feed themselves for lunch.”

Commercial bakers trying to reach smaller households or consumers watching their waistlines can get to them with these smaller products.

Adjacent to this downsizing trend is the drive toward more convenient grab-and-go bakery options, particularly for the breakfast daypart. Consumers are living mobile lifestyles and want options that are portable and easy to eat in their cars or at their desks.

Mr. Solsvig noted that when looking at products across channels, each one has its own specific needs, and products must be tailored to each channel’s consumers and their motive for shopping there. While in-store bakeries are often frequented by people shopping for their families and baked foods to share, c-stores are usually serving people looking for something portable and easy.

“The product needs to be easy to eat, portable, delicious and filling,” he said.

Individually packaged, single-serve breakfast items fit right in.

The need for a convenient breakfast is an opportunity for quick-service restaurants (QSR) to grow as well. Even in the breakfast-only segment, offering something portable is a way they can grab some of that traffic as it drives past on the morning commute.

“As far as breakfast goes, we’re all getting busier all the time and need something on-the-go,” said Cordia Harringon, chief executive officer of The Bun Cos., Nashville, Tenn. “Q.S.R.s can either grow in this segment they’re already serving, or they can start serving in new segments. You’re seeing restaurants that are in lunch and dinner expanding into breakfast to grab some of those sales.”