Indulgences In-Store

Some say the cupcake is the perfect treat. It is small yet satisfying, fun and decorative, indulgent but not sinful and, perhaps most importantly, it can be eaten on the go.

After years on the rise, cupcake sales are starting to slow down, but the in-store bakery’s convenient, creative and clean-label trends are just heating up. Retailers are focusing on smaller, grab-and-go packaging, unique, fresh products and healthy ingredients lists to boost sales and satisfy consumers who want a quick and easy quality treat.

“Cupcake sales have finally stalled after a meteoric rise,” says Matt Lally, client manager at Nielsen Fresh. “For the in-store bakery department to continue growing sales, it is important to apply the same principles to other products that made cupcakes so successful: convenient, quality product at affordable prices.”

Convenience is a top priority for consumers, and the grab-and-go trend is currently booming in today’s fast-paced society. Companies like Muffin Town, based in Chelsea, Mass., are focusing on individually wrapped products with extended shelf lives. Among Muffin Town’s top sellers is the 3.6-ounce individually wrapped gourmet muffins line, say company officials. It also offers 4- and 5-ounce packages as well as clamshells of 4, 6 and 12 pieces that cater to shoppers with young families.

“It’s more convenient for a mother to go right to the bakery section to grab cornbread and muffins,” says Roger Piffer, director of marketing for Muffin Town.

Similarly, SatisPie is capitalizing on the grab-and-go trend with the launch of a 5-inch pie line that will be available in September, according to Mike Pinkowski, president of the Rochester, N.Y.-based company. “A lot of the grab-and-go 4-inch pies are basically two pieces of dough with jam in the middle, so we created a deeper dish 5-inch pie, and we’re leaving the fruit in it,” he says. “It’s actually two servings, so it is enough for couples or older couples for dessert.”

Smaller and shareable treats are not only more convenient; they are more acceptable indulgences in the eyes of the consumer. Individually wrapped packaging, smaller products and clamshells encourage consumers to make a guilt-less purchase they can share with others.

“The bakery category is indulgent, and making those indulgences ‘permissible’ is the key to driving growth,” says Keith Appling, executive vice president, sales and merchandising at Lawrence Foods, based in Elk Grove Village, Ill. “While cakes will always maintain a solid position for driving sales, we’ve seen great success with right-sizing cakes, and not just moving to cupcakes. Think smaller: cakes for two, mini cake bars, petit fours, mini tarts. It’s all about helping the consumer make an easy choice.”

Some consumers view mini desserts and pastries as less of a commitment than say a larger cake or pie, say industry observers. Both Millennials and Baby Boomers are looking for smaller package sizes. Appling suggests retailers move small indulgences near the registers in the evening hours when younger shoppers stop in for dinner ideas and showcase shareable mini cakes and pies mid-day when seniors are more likely to be in stores.

J. Skinner Baking Co. is making an effort to appeal to volatile Millennials without alienating retailers’ core consumers. “Our latest launch, J. Skinner Mini Danish, capitalizes on the trend of snacking and portion control while staying true to our indulgent roots,” says David Skinner, marketing manager for the Omaha, Neb.-based company. “While our initial version is a variety pack of fruity flavors, the two forthcoming flavors will be straight packed cinnamon and cheese.”

To help retailers grab shoppers’ attention, McKees Rocks, Pa.-based 5 Generation Bakers provides its partners with display racks, both counter-top acrylic displays and wooden floor racks, as well as recipe cards, serving suggestion cards, P.O.S signage and in-store demos to call out its products, says company president, Scott A. Baker.

Of course, many bakery sales are impulse purchases, so it is important that retailers drive foot-traffic to the department and provide quality products to encourage repeat trips, say observers.

“Often times we’ll notice that in-store bakeries attempt to emulate the aesthetics of a traditional corner bakery, but without quality products to keep the consumer coming back,” says Skinner. “These efforts are counterproductive. As a brand, technology is our greatest ally when it comes to driving foot-traffic to in-store bakeries.”

Merchandising is a key to creating sales, and eye-catching packaging and display racks not only encourage impulse purchases, but also draw consumers to the bakery isle for fun, creative and customizable products. “Store-level execution really succeeds when displays inspire a customer to purchase,” says John Gardner, director of customer marketing at DecoPac, based in Anoka, Minn. “It isn’t enough to wait for customers to have a special occasion and place an order. Signage, P.O.S. materials and display cakes that show personalization will persuade consumers for both impulse and return purchases.”

In addition to convenience and permissible indulgence, consumers are seeking variety, personalization and a unique experience from the in-store bakery. They want an assortment of products and customization options, and to feel like a part of the purchase decision, says Gardner. “Consumers are turned off by what they perceive as cookie-cutter products and environment. Find a way to set yourself apart with an immersive experience that draws people in. You can do this with displays, with the cakes you have in your cake case and how you lead consumers through the store to the location where they can place an order,” he adds.

Cakes continue to be the largest contributor to in-store bakery growth, according to Becky Loveland, vice president, marketing and R&D, North America at Dawn Foods. The Jackson, Mich.-based company offers classic cake desserts and indulgent upscale options like its waterfall cake, made with real chocolate curls and Madagascar bourbon vanilla topped with a pour-over design described as a “chocolaty waterfall.”

Loveland says customers already have a perception that they are going to get fresher products at the bakery counter. And though many of Dawn’s fresh products are ready to sell, the company also provides retailers with ready-to-finish products—such as cakes, brownies and cookies—that consumers can customize for their personal needs.

“In desserts, consumer focus seems to be more on fresh/made fresh,” says Appling. They look for signature products that are indulgent, creative and affordable. Dessert has moved from an after-meal occasion to an all-day appropriate level, where the indulgence often replaces a meal occasion.”

However, that is not to say special occasions lack an impact. While it is important that in-store bakeries offer creative and customizable fresh products, consumers are also drawn to seasonal offerings throughout the year. SatisPie offers products with higher fruit content in the summer and is currently giving consumers a reminiscent taste of fall with its latest launch, a coconut custard promotion for the Easter holiday, says Pinkowski.

Desserts and indulgent items remain top performers, representing nearly 50 percent of in-store bakery sales. Though premium goods are becoming the stars of the subcategory, consumers still look for healthier ingredients lists. “Consumers can justify their indulgence if the product has a cleaner label or another positive attribute, such as natural or organic,” says Skinner. “It also helps to communicate the attributes of these products to consumers, whether through vivid imagery and/or texture claims to underline indulgence.”

Skinner says 95 percent of items have no declared benefit on the packaging. To cater to the health-conscious consumer, companies are improving their ingredients lists to contain items that are easily recognizable and accepted by consumers. Like Pinkowski says of SatisPie ingredients, “If you can’t pronounce it, it’s not in there.”

Consumers are more conscious than ever when it comes to health trends and ingredients lists. “Customers are more educated when they come to the bakery counter and are willing to pay a premium for foods with shorter, easier-to-understand ingredient lists,” says Loveland. Research shows that 68 percent of consumers want to recognize every ingredient on food labels, and with that in mind, Dawn has launched Baker’s Truth, its line of clean label ingredients.

Similarly, 5 Generation Bakers recently updated its packaging to represent clean labels. “We’ve reformulated our bread and upgraded our packaging to call out that our breads are non-GMO, trans fat-free, and we use cage-free eggs,” says Baker.

After the FDA’s determination in 2015 that partially hydrogenated oils are not Generally Recognized As Safe (GRAS), food companies have been updating their products to be made without it, ahead of the three-year compliance mandate. And though the clean-label trend is not particularly new, it is definitely here to stay.

“When considering health benefits, it’s important to note that it is a constantly evolving term,” says Skinner. “Relevant health attributes continue to change at a fast pace in the internet age, and it’s important for managers to be able to discern between a ‘flash in the pan’ trend and ones that will stand the test of time."