Despite that they account for a relatively small percentage of perishable dollar sales at most retailers, in-store bakeries are thriving, according to recent data from Packaged Facts.
Retail dollar sales of in-store bakery products reached $13.4 billion in 2013, up from $12.8 billion in 2012, according to the report, titled “In-Store Bakeries: U.S. Market Trends.”
In-store bakeries not only help support one-stop shopping, which is key for supercenters and warehouse club chains, but they also convey an image of freshness and quality that carries over throughout the rest of the supermarket, according to Packaged Facts research director David Sprinkle. Moreover, the continued expansion of fresh baked products beyond their supermarket perimeter base into convenience and drug stores has fueled additional momentum.
In-store bakery products have experienced dollar sales increases every year since 2008, owing in large part to supermarkets’ growing reliance on the category, as well as higher price points. These gains will likely continue through 2017 and beyond despite challenges due to economic conditions and health and diet concerns, according to Packaged Facts.
Despite that consumer spending is unlikely to surge over the next few years, and more consumers will look to reduce bread and sugar in their diets. Still, the sandwich remains a staple of American-style, on-the-go eating, and most consumers will still want to indulge occasionally in affordable indulgences such as baked desserts.
According to the report, desserts should continue to drive overall growth with similar sizes, portion control, and on-the-go products leading the way. Breads and rolls as a whole are expected lag, but artisan and higher-quality breads, as well as different varieties of rolls (think pretzel), will stand out on in-store bakery shelves.
Commodity breakfast bakery products will be challenged to remain compelling as consumers seek out these products in various other outlets, including foodservice. But perhaps even more opportunity lies in reaching the some 31 million Americans who skip breakfast altogether, as NPD found.