Pastry producers can take comfort in something: Americans have a sweet tooth. As consumers seek ways to soothe themselves during troubling times, creators of these sweet baked goods must rely on creativity, endurance and commitment to innovation, even if the odds seem to be stacked against them.
“Trying to paint a picture of the pastry marketplace has proven difficult due the pandemic,” said David Skinner, marketing manager, James Skinner Baking Co., Omaha.
When the coronavirus (COVID-19) pandemic hit, consumers went haywire for a bit, and that threw bakery production into a tailspin. But that was only the beginning ... the road ahead is going to be a long one.
“We’re seeing a muddled picture as we witness so many additional influential variables,” Mr. Skinner said. “When we assess performance of a certain pastry product, we have to look at influences such as availability, panic buying, e-commerce presentation, stimulus check surge, inflation indexes, demographical economic situations and more. The list goes on, and the situation seemingly changes weekly.”
“Sweets and indulgent bakery products provide consumers a form of escape during periods of uncertainty.”
- David Skinner, James Skinner Baking Co.
The landscape for pastry trends is shifitng quickly, and it’s hard to see the results of it right away, especially in terms of predicting the viability for new product launches. That creates a conundrum for pastry bakers … at least the ones without a crystal ball, that is.
“There’s a delay for us reporting products,” said Tom Vierhile, vice president, strategic insights, North America, Innova Market Insights, a research firm that tracks new product launches. “The pandemic happened in mid-March, and we’re just now starting to see it show up in the new product numbers. So, 2020 may be a rough year, but it really depends on how things go over the next few months.”
That said, companies like Chicago-based Gold Standard Baking Co. are forging ahead in R&D to navigate shifting consumer trends and people’s propensity to indulge.
“I don’t think there’s been a massive change in consumer behavior on the consumption of sweet baked goods,” said Haq Chaudary, chief commercial officer and general manager, Gold Standard. “The American population, in general, has a sweet tooth. I have three kids, and I can testify to that.”
Capitalizing on comfort food
Before COVID-19 turned the world on its head, consumers were ramping their preferences up a notch, prompting pastry bakers to up their game in response.
“Upscale, European-style quality type of products have made it to the US, and the consumer has become very educated, whether it’s in foodservice or the in-store bakery,” said Yianny Caparos, president, The Bakery Cos., Nashville. “People have become much more educated on the ingredients that go into a product. They still want to indulge; they’ll be okay to have Ghirardelli chocolate in a pastry made with butter because they know the fine quality of ingredients going into the product.”
Mr. Vierhile also observed that portion size helps grant that permission to indulge, so bite-size products are making their way to store shelves.
“It makes consumers feel less guilty,” he said.
Mr. Skinner noted that when the quality is there — for taste and appearance — consumers will forgive negative connotations that come with indulgent ingredients.
People have enough to fret over between the pandemic and the economy; decadent comfort food should provide a distraction, not something else to worry about.
“Sweets and indulgent bakery products provide consumers a form of escape during periods of uncertainty,” Mr. Skinner said. “As we enter uncharted territory, we anticipate these types of products to work well.”
According to IRI data for the week ending May 17, private label was the top pastry/Danish/coffee cake producer with 21% of dollar share despite relatively flat dollar sales and a slight dip in unit sales. With a 3.4% increase over last year, pastry outpaced donuts in dollar sales by a full percentage point.
Comparing pastry dollar sales increase with a 2.1% drop in unit sales may suggest the category is snagging higher price points, which may indicate that consumers are willing to pay a premium for quality.
Rather than skimping on the ingredients — which could potentially sacrifice quality — many pastry producers shift the focus to positive attributes such as clean label, where recognizable ingredients like sugar are seen in a more acceptable light.
Label readers rule the roost
Educated consumers can be a baker’s worst enemies or greatest allies. It often depends on what they’re seeking on the label. Regardless, these consumers play a key role in pastry product development. And sometimes, trying to meet their demands can create a double-edged sword.
“Using ingredients that are perceived to be better for you can lessen the degree of guilt a consumer may experience,” Mr. Skinner suggested. “At a certain point, though, health claims begin working against the purchase as consumers perceive them to affect the flavor. This is especially true for indulgent products. Overall, a ‘back to basics’ approach to the ingredient panel is an attribute that grants certain consumers permission to indulge.”
This is where full-fat ingredients like butter or the ones like sugar that are often vilified can be seen in a new light.
“All these healthy halo claims don’t necessarily mean the product is good for you,” said Tami Kulak, director of marketing and sales, Gold Standard.
“As consumers become better educated on reading nutritional panels and what’s actually involved in a product, it will play an important part in how they make good decisions.”
This back-to-basics sentiment is what’s driving the demand for clean label pastries in the in-store bakery and center aisles.
“People have become much more educated on ingredients and the variety of ingredients that go into a product,” Mr. Caparos said. “What they want is the confidence of what a clean label represents.”
These days, times are hard. And with the rapid, drastic changes Americans have endured in the first half of 2020, no one knows when — or if — they’re going to get better. As priorities shift and disposable income diminishes, innovative bakers can still find success when they keep a focus on the value proposition in their product development.
“The pandemic has driven consumers to increase their consumption of comfort foods,” Mr. Vierhile said. “These products can scratch an itch that consumers will probably always have.”
This article is an excerpt from the July 2020 issue of Baking & Snack. To read the entire feature on pastries, click here.