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Downsized baked goods spell sweet profits: Packaged Facts

By Kacey Culliney+

05-Feb-2014
Last updated on 05-Feb-2014 at 13:24 GMT

Smaller, single-serve sweet baked snacks can drive category growth, says Packaged Facts
Smaller, single-serve sweet baked snacks can drive category growth, says Packaged Facts

Bakery manufacturers can drive growth of packaged sweet baked goods by downsizing to smaller and single-serve packs for higher per unit profits, says the research director of Packaged Facts.

The US sweet baked snacks and dessert market – including shelf-stable, refrigerated and frozen cakes, pies, bakery snacks, cheesecakes and cookies – will tot up retail sales of over $14 billion by 2017, according to the research firm’s latest report ‘Packaged Sweet Baked Snacks and Desserts: US Market Trends’.

Sales growth has been steady since 2008, up 2.5% each year, but Packaged Facts said volumes were in decline as health-conscious consumers turned to fresh baked goods from in-store and independent bakeries.

However, the research firm said that growth could be sparked by smaller pack sizes that have higher per unit costs.

Research director at Packaged Facts David Sprinkle said that growth the sector had been, and would continue to be, driven by smaller sizes and single-serve portions that fulfil consumer desire for indulgence and on-the-go snacking options with some portion control.

From bulk to single-serve

Nielsen’s bakery expert Jonna Parker agreed that there were great prospects for bakery manufacturers to down-size and sell smaller baked goods.

She told BakeryandSnacks.com: “We’re seeing a continuation towards smaller package sizes across all categories and that is a trend we’ve been talking about for years now, but each year it remains more and more relevant and important as a market trend.”

Parker said the downsizing trend had not been maximized yet in bakery, particularly with shelf-stable cookies that continue to trend in bulk packs.

The bakery expert previously urged manufacturers to consider switching from bulk bakery to single-serve, smaller portions to drive growth in the category.

Shelf-stable dominates

Packaged Facts data showed that within the sweet baked snacks and dessert category, shelf-stable products dominated - representing 88.2% of total sales. Frozen represented 8.3% and refrigerated 3.5%.

Within the shelf-stable segment, cookies have remained the biggest seller, followed by cupcakes, brownies, cakes and pies.

“Refrigerated products are a small part of the packaged sweet baked snacks and desserts market with most sales coming from cakes and cheesecakes. Both experiences solid dollar sales increases between 2008 and 2013, and cakes in particular experiences high volume gains,” Packaged Facts said.

Sales of frozen baked snacks and desserts are higher than refrigerated, it said, but “still very small relative to shelf-stable products”.

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