Boosting the Bakery

Cupcakes, cake pops and cronuts all have one thing in common. The items, made by specialty shops across the country, sparked a craze among foodies. The mania serves as reminder that even as consumers continue to seek healthier options in the supermarket, they still want to indulge. 

The demand for these items also created flavor trends and inspiration for supermarket bakeries and fresh baked goods companies to create their own innovative items—across a variety of occasions like breakfast, snacks, after dinner desserts, entertaining and special celebrations—in an effort to differentiate themselves from competitors and create loyalty with shoppers. 

“Today’s audiences know they can now go to the in-store bakery to get more and more innovative desserts and other formats now as opposed to in the past,” says Courtney Erickson, associate marketing manager–shopper marketing, in-store bakery and deli division at Rich Products Corp., based in Buffalo, N.Y. “The new flavors and trends we’re seeing have given the bakery operator new opportunities to adapt to and meet the demands of consumers who are looking for more on-trend bakery items.” 

Industry observers say that effort has paid off for many supermarket bakeries. However, in order to keep up with demand, retailers should stay abreast of the trends that resonate most with consumers and offer an assortment of products to meet their everyday needs, as well as holiday and key entertaining occasion needs.  

“For the sweet goods category, indulgence is still very relevant for consumers, but they are looking at some healthier alternatives without jeopardizing the taste component,” says Alejandro Tovar, vice president of marketing for Puratos Corp., an international company with U.S. headquarters in Cherry Hill, N.J.  

Two trends in particular are causing a stir among consumers concerned about health and wellness: the clean label movement and smaller portion sizes of bakery items. “The clean label trend is definitely worth noting,” says Amanda Sopko, marketing manager at Erie, Pa.-based JTM Foods, maker of JJ’s Bakery brand of baked snack pies. “The movement of consumers being more health conscious has created a demand for bakery snacks that are fresh and have no fillers or additives.” 

Companies that provide fresh baked goods for the in-store bakery have noted this important trend, and many are making changes to existing products, as well as products in development, to meet the criteria of informed consumers. 

Dawn Food Products is focusing its innovation on clean label, says Jenny LaPaugh, senior director of global market research and insights for the Jackson, Mich.-based company. “To satisfy this consumer need, Dawn Foods will be introducing a new line of ‘clean label’ mixes that will be available in the fall of 2016,” LaPaugh says. “In early 2017, Dawn will also launch a new line of ready-to-eat sweet baked goods, designed for grocers’ in-store bakery. This brand is called Firefly Baking Co., and will offer a range of everyday sweet baked snacks, all of which are free from artificial additives, preservatives and colors.” 

While some companies look to future innovations as clean label opportunities, others have worked on reformulating popular items to meet new clean label requirements and consumer needs. Lawrence Foods, based in Elk Grove Village, Ill., offers a variety of items for in-store bakery needs, including fillings and toppings, jellies and preserves, fondant and icings, among many other specialty baking products. 

Keith Appling, executive vice president of sales and merchandising for Lawrence Foods says the company has been working ahead of the U.S. Food and Drug Administration’s (FDA) 2015 mandate that food manufacturers remove partially hydrogenated oils (PHOs) from products. The FDA mandate gives manufacturers three years to do so. “We’re just about finished with transitioning all of our products to the new formulas,” he says. 

5 Generation Bakers, the McKees Rocks, Pa.-based maker of Jenny Lee Swirl Bread, has always held itself to a clean label standard, says company president Scott Baker. However, the company has recently taken those standards to another level by changing its ingredients to be GMO-free. 

“We recognized that we used some ingredients that contained GMOs, and as of June 1, we are GMO-free,” Baker says. “We made it an immediate effort as soon as we recognized that we weren’t. We are taking further steps to improve the perception of how clean our label is.” That includes a new Jenny Lee Swirl Bread label empasizing the fact that the product is now GMO-free. 

Sizing Down 

As companies make an effort to offer products with cleaner labels, they are also revamping packaging sizes to meet the needs of health-conscious consumers who still want to indulge in popular bakery items while minding their caloric intake. Additionally, smaller households and more frequent trips to the grocery store, particularly by Millennials, provide incentive to offer smaller portioned items, says Tara MacCarthy, marketing manager for Bake’n Joy Foods, based in North Andover, Ma.

“Shoppers are more inclined to consider a smaller spend on a little treat. They don’t want the whole cake nor do they want to spend the extra money on it,” MacCarthy says. “The value declines.”

Portion controlled packages are driving growth in stores, according to Nielsen FreshFacts. For the latest 52 weeks ended May 28, mini pies have seen dollar sales increase 21 percent, and both individual dessert cakes and brownies and dessert bars experienced a 10.6 percent dollar sales increase. Additionally, mini muffins, mini cookies and mini doughnuts/doughnut holes have seen dollar sales increase 11.3 percent, 10.9 percent and 7.3 percent, respectively.  

Officials at the James Skinner Baking Co. say that portion control and on-the-go eating habits go hand-in-hand with more balanced lifestyles. “Portion controlled products are also a great solution for consumers looking for moderation in their overall eating plans,” says Elyse Norton, vice president of marketing for the Omaha, Neb.-based company. “Our latest two items address these areas of focus by providing new convenient formats, exciting new flavor combinations, as well as innovative products that think outside the clamshell.”  

The James Skinner Baking Co. recently introduced J. Skinner Mini’s, which is a 10-count package of mini Danishes featuring five classic varieties of flavors. The company also introduced Seasonal Rings, which are a 27-ounce pull-apart Danish with alternating seasonal flavors.  

Rich’s is also focusing its innovation on smaller portion sizes. The company’s Specialty Sweet Fusion desserts such as the “Brookie” (a brownie-cookie), cheesecake cakes, mini-bundt cakes, thumbprint cookies and Sweet Middles are geared toward consumer preferences for mini-desserts, hybrid desserts and no-artificial-ingredient desserts, says Erickson.

“Our Specialty Sweet Middles are peanut- and tree nut-free, and they also do not contain artificial colors, artificial flavors or high-fructose corn syrup—a combination of ‘better-for-you’ attributes growing in favor with consumers,” Erickson adds. 

While it is important for in-store bakeries to offer on-trend everyday bakery needs, it is also crucial to have a robust offering of seasonal and occasion-based items. MacCarthy says retailers should promote flavors during different times of the year. “For instance, promote Blueberry Muffins and Loaves throughout July—even put blueberries in cornbread; it’s surprisingly good,” she says. 

For the fall season, Bake’n Joy offers pumpkin pre-deposited muffins and loaves, gingerbread muffins and scoop batters, an array of cranberry products and pre-shaped gingerbread men cookies. 

“We suggest offering your own seasonal specialties, like a pumpkin whoopie pie with cream cheese filling or a pistachio whoopie pie for St. Patrick’s Day,” MacCarthy says. “There are endless ideas for products that can generate interest and increase sales around the holidays.” 

Dawn Foods offers insights and innovation support to help retailers ensure success through seasonal LTOs (limited time offers) and new offerings to satisfy relevant consumer needs, says LaPaugh. The company’s new Triple Layer cakes feature hand-decorated designs to provide the freshly made cues that customers seek and come in both everyday and seasonally-appropriate on-trend flavors, LaPaugh adds. 

“Successful bakeries are winning with unique cake designs, merchandising, and promotions that capitalize on holidays, key entertainment events and special occasions such as graduation,” says Stephanie Moats Leibke, marketing director for DecoPac, based in Anoka, Minn.

DecoPac offers a variety of services to help in-store bakeries efficiently meet these consumer needs. The Magic of Cakes Kiosk, for example, is a web application that provides a complete in-store and online consumer ordering solution. It can capture orders from consumers in-store, online or from their mobile device. It can reduce consumer wait time for placing a bakery order and increase productivity as cake decorators spend less time taking orders and more time decorating cakes, Moats Leibke adds. 

“Consumers are looking for different and special, so differentiation is key,” Moats Leibke says. “From the cake design to merchandising and marketing driving consumer awareness of that unique point of difference both in-store and out-of-store is important.”