INDIANAPOLIS — Everyone knows that consumer behavior is a vital factor in bakery sales. However, certain consumer groups — namely families and millennials — are so multi-dimensional that bakery product developers and marketers must rely on multiple lenses with which to view them.
That was the message from Sally Lyons Wyatt, executive vice-president and practice leader of client insights, I.R.I., shared with operations professionals at the American Bakers Association (A.B.A.)’s annual Technical Conference, held Oct. 28-31 in Indianapolis.
Presenting research compiled from point-of-sale, loyalty card and online data collection, household panels composed of 100,000 homes, and other qualitative field research, Ms. Lyons Wyatt offered some good news for the industry and also identified challenge points.
In overall grocery, fresh and packaged bakery represent 8% of sales— that’s $40 billion for packaged baked goods and slightly more than $6 billion for in-store bakery— according to Ms. Lyons Wyatt.
“You’re significant in the store,” she said. “And you’re growing at about 1.3%.”
Research presented at the conference reflected 52-week data through September 2018.
Ms. Lyons Wyatt noted that while dollar sales are growing for fresh and packaged bakery, unit sales are flat. “That is a little disturbing because it means a lot of the growth is coming from price,” she observed.
In looking at dollar growth, the three biggest subcategories were cookies, tortillas and fresh bakery cakes. Cookies and tortillas grew in both units and dollar sales since 2017.
Conversely, crackers and pastry donuts experienced declines in both units and dollar sales, Ms. Lyons Wyatt said. “Pastry donuts have had phenomenal growth for the past few years; this is one of the first we’ve seen a bit of a decline,” she observed. “It’s still a favorite category, but there is still work to be done there.”
Identifying opportunities— and successfully executing them— requires understanding consumer needs in all areas of bakery categories. “There’s a ubiquitous manner in which fresh and packaged bakery really address consumer needs,” she said.
Take millennials. Many baking companies are searching for a “magic bullet” to capitalize on their spending power, but Ms. Lyons Wyatt warned of the pitfalls of making blanket assessments of this demographic.
“When you look at millennials, you can’t treat them as one big group because there are so many different components of being a millennial,” she said, identifying sub-categories that encompass singles younger couples and female-led households, just to name a few.
“Think of a Rubick’s Cube,” she suggested. “We can turn it in so many ways. One way is looking at millennials not homogeneously but by breaking them down to look at them from a segmented point of view,” she said.
Ms. Lyons Wyatt noted that knowing what tactics help bakers reach the right demographics requires an initial understanding of the macro trends driving growth. At the conference, she identified the top six trends that presented opportunities that bakers could implement in their bakery operations.