KANSAS CITY — Remember the “new normal,” that phrase that everyone overused two years ago when wondering what life would be like after the COVID-19 pandemic subsided? For many bakers, today’s new normal seems surprisingly old with skyrocketing food prices reminiscent of the 1980s. Consumers are worried, too.
In March 2022, IRI’s survey of primary shoppers found that 92% noticed that food prices are somewhat or a lot higher than last year, and 95% are concerned about it. Moreover, 49% are extremely concerned about inflation compared to 27% who feel the same way about the pandemic.
“This means that inflation has a far greater grip on the nation’s food spend than COVID-19 in the current marketplace,” noted Jonna Parker, team leader Fresh for IRI, in a recent trends report by the International Dairy Deli Bakery Association (IDDBA).
Bakery sales, for now, remain strong. IRI data reported overall bakery department sales for March 2022 rose 10.2% to $2.9 billion compared to the same month a year ago. Unit sales were nearly unchanged. Such a jump in dollar sales and flat unit sales is a sure sign of inflation, but Ms. Parker described the current situation as “remarkable” that bakery volumes are holding up. Moreover, consumers seem willing to pay more for premium bread.
“Even though there are much cheaper sliced breads in that aisle, people are not willing to give up those attributes of health and taste when it comes to just $1 or $2 more even in this inflationary period,” she said during an IDDBA webinar.
Quality bread is worth the price, and sometimes a little more.