New Trends Impact Retail Bakeries in 2010

MODERN BAKING STAFF

That people need to eat is a constant, but how they eat is always evolving. Forces are at work, both invisible and in plain sight, that stand to change how consumers approach food. Of course, the economy has altered the food landscape in recent months, but other macro-trends are doing their part in constantly reshaping the consumer perception of what constitutes good food.

Modern Baking, a sister publication of SN, recently looked at several trends that will impact bakery departments in 2010, and examined how retail bakeries around the United States are responding to these new trends. Below are excerpts from their report:

PACKAGING

Given their wholesome, natural reputation, many baked products are ideal candidates for green packaging. Plus, consumer demand for such packaging is growing.

Packaging has gone from afterthought to important consideration for today's consumers. The green movement and demand for smaller sizes are major factors affecting how bakers package their products.

Jennie Scheinbach, owner, Pattycake Bakery, Columbus, Ohio, recently converted the packaging on her cookies and whoopie pies to 100% biodegradeable materials. “It was a founding principle of Pattycake's from our inception to do things as sustainably and ethically as possible,” Scheinbach says.

At Little Dom's restaurant and deli, Los Angeles, Pastry Chef Ann Kirk appeals to consumers' green sensibilities by packaging panna cotta and puddings in small, reusable mason jars. Customers who return the mason jars to the deli to be cleaned and reused are rewarded with a dollar off their next purchase.

The mason jars also make the panna cotta and puddings portable, mirroring another movement in packaging. Consumers' ever-increasing appetite for convenience to support on-the-go lifestyles has precipitated a trend toward smaller portions in easy-to-transport, single-serving packages. But convenience isn't the only factor driving the single-serving demand.

Health concerns regarding portion size also are forcing some bakery products, especially sweetgoods, into single-serving territory. Calorie counters are more likely to indulge themselves in a small treat than larger, more conspicuous baked products.

Simultaneously, the economic downturn has made consumers hypersensitive to waste. Rather than buy a larger baked product that may stale, people are buying smaller products that are certain to be consumed. Finally, single-serve packaging acts as a frame for baked products, playing an active role in attracting potential buyers.

“Packaging and branding is really essential to separate us from everyone else so that we succeed,” says Jill Segal, owner of Jilly's Cupcakes and Café, St. Louis. “Our real success is our product, and our individual clamshell domes help us display our product. All of our wholesale customers order cupcakes individually packaged now.”

LOCAL NATION

If they haven't already, bakers ought to familiarize themselves with Oxford University Press' 2007 Word of the Year. The word “locavore” was coined in 2005 by a group of four women in San Francisco who proposed that local residents should try to eat only food grown or produced within a 100-mile radius. Just as carnivores eat meat and herbivores eat plants, a locavore is a person dedicated to eating local food. And when the National Restaurant Association surveyed 1,600 American Culinary Federation chefs to determine the latest menu trends, locally grown produce and grain appeared as a top priority. Locavore has taken off across the country.

“I think locality is first on the list of trends around here,” says Josh Allen, owner of Companion, St. Louis. “We are certainly seeing an interest piqued in who is baking people's bread and where it is produced, who is roasting their coffee beans and where they are roasting it. Really, it's a well-educated clientele trying to understand where their food is coming from.”

Independent retail and foodservice bakeries are well positioned to capitalize on the locavore movement, as it provides a degree of differentiation from national chains. The locavore philosophy addresses wide-ranging global environmental concerns by thinking and acting for the betterment of the immediate, nearby area.

A locavore will argue that fewer resources, especially fossil fuels, are expended when packaging and transporting food locally. Buying locally supports the immediate economy, keeping more money in the community. Health also comes into play in the locavore ethic, as processing and preservatives are less important since the food doesn't have to travel so far.

“The local movement is a culmination of a lot of little things — buying packaging locally, hiring local artists to design logos,” Allen says. “All of that's of interest to a growing portion of people.”

SOCIAL NETWORKS

Facebook and Twitter looked like fads a year ago, but recent studies show they — or at least their functionalities — may have staying power.

Facebook and Twitter have been heralded of late as having the potential to unearth new customers, but do they? Cone, a Boston-based marketing company, commissioned a study — the 2008 Business in Social Media Study — showing more than 30% of Americans used social media websites more than twice per week last year, a percentage that can only have increased in 2009. It also found that more than half of social media users prefer and feel better served by brands and companies that they can interact with online.

Sprinkles, The Original Cupcake Bakery, Los Angeles, uses Twitter to broadcast a “secret” word every week. Customers who follow the company on Twitter are privy to the secret word and able to cash in their secret word for free cupcakes. “Twitter is very efficient because it provides immediate results. Within a minute of posting, we get people in our store redeeming our promotions,” the company said in a statement.

Lev Ekster, owner of CupcakeStop, a bakery business on wheels, relies heavily on Twitter and Facebook. “If I have an exciting new flavor that I want people to try, I'll tweet about it and get people excited,” he says. “Twittering lets us manage inventory for the day, and show people what we're offering.”

Bakers are taking advantage of consumers' use of social media. But as more bakeries and their employees are using these tools, operators have to be mindful of how the bakery presents itself online. The social media sites may feel private, between a person and his or her computer, but they are in fact public manifestations of the brand. Operators are establishing guidelines with employees that aim to leverage employees' online personalities while protecting the integrity of the brand. Employees are on Facebook and Twitter already, and once a few ground rules are established, they can be a valuable resource in developing online communities.

GOING TO EXTREMES

As miniature, individual desserts gain popularity, over-the-top celebration cakes push the opposite extreme.

In the cake and dessert category, consumers seem to be suffering from a split personality. On the one hand, big, elaborate celebration cakes are all the rage while on the other hand, small and individual-size desserts are gaining sales. Cake shops specializing in celebration cakes are opening up across the country while at the same time cupcake-only bakeries are experiencing a boom. And, elaborate single-serve desserts are co-existing with more demand for comfort foods.

Even during these tough economic times, consumers are still willing to spend big bucks to celebrate that special day, such as a 16th birthday or a wedding. It isn't always that the size of the cake is overwhelming, but the fact that many more parties now feature tiered cakes or 3D designs when a simple sheet cake was the norm 10 years ago. It is not unusual to see tiered cakes for baby showers, bridal showers and birthdays.

However, when it comes to everyday treats, customers want something that can be consumed in one sitting. This may be due to smaller households, or simply consumers wanting to control their sweets intake.

“We're seeing a lot of individual desserts, whether it's a parfait or a cupcake,” says Lynn Schurman, co-owner of Cold Spring Bakery, Cold Spring, Minn.

Although smaller desserts may be the trend, it doesn't mean they are simple. Their presentation can be quite elaborate with fresh fruit, interesting packaging or chocolate accents. Packaging companies have taken note of the small-size trend and are offering a variety of ways to make these smaller items showstoppers.

While customers are wanting intricate, small desserts, they also are looking for more products that are simple. “We're looking to add more heritage-type recipes, more of the comfort food-type products,” says Mike Vernon, bakery buyer for Straub's, Clayton, Mo. “While French pastries sell, people would rather have cheesecake.”

The smaller sizes are not limited to desserts. Bakers are seeing the trend of consumers wanting to eat smaller servings manifest in other bakery categories. Whole Foods Market is selling more of its in-store bakeries' smaller 2½-ounce muffins than the 5½-ounce size, reports Steve Schulte, bakery coordinator for the South region, Atlanta.

“Customers are still going to buy something, but maybe they just want a little less of it,” says Bill Mihu, vice president, bakery operations, Schnuck Markets, St. Louis. “Bakery is not perhaps the healthiest product around, and they'll feel a little better about having 4 ounces of something instead of 6 or 8 ounces.”

FLAVORS GO ETHNIC

Pan dulce and Mexican sweet goods are in the midst of a transition from ethnic niche to mainstream as the national Hispanic population continues to grow.

Retail bakeries in the United States have long worn their ethnic heritages on their sleeves. Italian bakeries have been around long enough for cannoli and ciabatta to become mainstream in many U.S. bakeries. Jewish bakeries have done the same with challah, French with croissants and baguettes, and so on down the cultural line.

Two growth markets are currently emerging that stand to further diversify the rich selection of ethnic options in the American bakery, and it has bakery operators looking both south and east.

With the Asian market opening up and heightened trade between China and the United States, cultures are in closer proximity than ever before. As a result, Asian baking styles are becoming increasingly popular. A few years ago, Modern Baking reported on an increase in the use of tea as a baking ingredient. This trend continues, buoyed partially by tea's use in Asian baking. Other Asian ingredients, specifically lemon grass, are likely to become more common in bakeries in the coming year. Meanwhile, the ongoing interest in Latin American desserts is noteworthy. The notoriously sweet dulces are enjoying greater recognition thanks to an increasing Hispanic population. The Mexican and Latin cultures are more focused on desserts than most other ethnicities, and the preferences of this growing consumer block are reflected in bakery offerings. Authenticity is key for retail and in-store bakeries to tap into these growing markets.