DUSSELDORF, GERMANY — Despite soft sales across the bakery category, shifting consumer behavior indicates growth opportunity for the industry, according to data presented by the American Bakers Association (ABA) at iba 2025, held May 18-22 in Dusseldorf, Germany.

Inflation continues to drive financial worry for most consumers, with 94% reporting concern for the cost of living, according to ABA’s Bakery Playbook series. These consumers are adopting money-saving measures as a result, including eating out less (30%), purchasing more deli-prepared grocery meals (25%) and checking grocery promotions more often (55%). 

This has translated into a larger retail share of total baked goods volume compared to foodservice, growing to 71.9% in 2024. While this is down from 2020’s pandemic heights of 78.1%, it is up long term from just 68.9% in 2009 and up 0.1% over last year. Overall, however, bakery is having a tougher time in retail compared to other categories, with dollar sales up only 0.9% and units down 0.7% vs. a year ago, according to Circana data for the 52 weeks ending Sept. 1, 2024.

There are bright spots though, including deli-prepared bakery, noted Eric Dell, president and chief executive officer of ABA. Unit sales of deli-prepared pizza, for example, jumped 8.5% for the 52 weeks ending Sept. 8, 2024, while deli sandwich unit sales rose 1.7%.

“Folks are looking to go get something quick,” Dell said. “There’s a strong consumer appetite for convenient, ready-to-eat bakery meal offerings that fit into their busy lifestyles.”

There is a bifurcation in consumers’ baked good purchases, Dell observed, with many opting for affordable, private label options while others seek premium varieties. 

“The middle section is a little flatter, but you're seeing folks who are willing to pay for the premium, and there’s also a segment of folks who are looking for the value,” he said.

Regardless of their bakery budget, consumers want to indulge, with 92% saying it’s fine to occasionally enjoy baked treats/desserts. Many are choosing to indulge around holidays, and Dell emphasized bakers should market their products around these occasions.

“The United States is a melting pot. We have people from all over the world. If you're looking at our consumer trends, there's a holiday every week,” he joked. “Lean into those celebrations, because that's where folks are saying they're willing to make that extra spend and see bakery as a part of their special occasions.”

Despite concerns about inflation, consumers still want to indulge in their favorite baked goods, Dell added, whether it’s for a celebration or a midday treat. This desire to indulge even in a tougher economic environment, as well the shifts towards at-home eating and deli-bakery purchases, contribute to a positive outlook for the industry. Euromonitor predicts retail bakery volume sales, as well as foodservice volume sales, to grow steadily through 2028, with retail’s volume share increasing to 72.3%.