Tapping into these trends can lead to incremental sales, says I.R.I.
From weight control to disease prevention, many Americans are taking health into their own hands. According to I.R.I. research, consumers are taking a 360-degree approach to health, and food is playing a big part. “Food and beverage are considered very critical,” Ms. Lyons Wyatt said, noting that 40% of consumers in a recent I.R.I. study stated that food and beverage were the critical to taking care of their overall health. Additionally, dietary restrictions play a huge role in food purchases, she said.
This is where bakery is channel-jumping, according to Ms. Lyons Wyatt. “The roles you play across the consumer spectrum are vast,” she advised.
A big example, she noted, is the proliferation of variety snack packs or trays that include crackers, cheese and protein or fruit. “We’re seeing a lot of convenient options coming into the industry, and there have been a few entrants over the past year that are changing the game from a convenience standpoint,” Ms. Lyons Wyatt said.
Ms. Lyons Wyatt noted that retailers such as Dollar Tree, Family Dollar, Aldi, Walmart and Target are opening more locations that either have a fresh bakery department or sell packaged bakery products.
E-commers is clearly a game-changer for retail, and Ms. Lyons Wyatt pointed out that packaged bakery is a part of that growth. However, she also indicated that fresh bakery is still “hit or miss” on whether retailers offer it as an online option. “But consumers would buy [fresh bakery products] if they were available and they could get fast delivery,” she said, noting that I.R.I. research indicated 36% of consumers said they would buy fresh-baked goods online if they came with speedy delivery. And the percent goes even higher — 45% — for millennials.
When crossing channels, two key indicators emerge: freshness and availability. “If shoppers know a retailer they’re going to will have the fresh and packaged products they want, they will choose that outlet,” Ms. Lyons Wyatt said. “But if that retailer doesn’t have it, they’ll go somewhere else.” She noted that availability issues such as out-of-stock are emerging in I.R.I. research. “So, make sure there’s availability throughout the day of key items consumers want. It will help ensure they’ll walk into that particular outlet,” she said.
Bakery comes into play here because, according to I.R.I. data, the average total store transaction is 2.5 times higher when baked goods are in the basket, and trips that included baked goods increased 4% vs. a year ago, despite slower foot traffic in the stores.
“Baked goods are big business,” she said. “They’re driving incremental and positive sales throughout the US.”
Of course, holidays mean big business for bakery, especially in the fourth quarter. According to I.R.I., the five weeks of winter holidays make up 12% of the business — unit and dollar sales — for the entire year.
But, she added, it’s important to look at the valleys, as well. Lesser-known holidays often provide untapped opportunities. “Create cross-store opportunities anchored on consumer needs throughout the year,” she said, noting that many club stores are successfully leveraging baker to increase ring sizes.
“They’re extending to other areas across the store,” she said. “They’re looking at the basket, seeing what’s in it and promoting to other areas.”
Suffice it to say that the cross-channel frenzy is thanks in part to Americans’ ever-increasing relationship with their digital devices. According to I.R.I., the number of consumers using newspapers, store circulars and magazines dropped to 48% this year, a decline from 51.8% in 2016. Additionally, Ms. Lyons Wyatt said, more than a third of consumers are comparing prices online.
“They might use their computers, but they’re still using offline measures as well,” she said. “But they’re definitely connected, so embrace all.”
“Innovation is the lifeblood of almost all food and beverage,” Ms. Lyons Wyatt observed. “This is where we get to refresh the shelf, where we get to try new things and generate excitement.”
In fact, many of these trends — holistic health and blurring convenience, for example —are key drivers for innovation. Product innovation in gluten-free, organic and ancient grains are taking off, said Ms. Lyons Wyatt.
“You can see it across many categories,” she said. “Whether you’re looking at bread, cookies crackers — you name it — we’re seeing a lot of these holistic health innovations coming to the forefront and doing quite well, especially if you get the messaging, placement and assortment right.”
Bite-size products such as Miss Jones Cake in a Cup are also gaining traction, she said, fulfilling that desire for convenience while offering benefits such as being certified organic and containing only 150 Cal. Some products such as Bake City’s single-packaged Cookie Plus Protein that offers 22-gram protein check multiple boxes.
“You have to embrace consumer needs in different ways but also understand that it isn’t just about one attribute anymore,” Ms. Lyons Wyatt said. “It’s about addressing all these different needs. You can have a product that’s delivering protein or even ancient grains. But do you have it in the sizes and packaging that are needed? If you do, great. If you don’t, it’s an area of opportunity.”