Burnt by the pandemic, in-store bakeries are on the rise

grocery store bakery

Grocery store bakeries are catching up on lost ground from the pandemic. / Photo: Shutterstock

Grocery store bakeries, hit hard by the pandemic, are on the rise again, according to a one-of-a-kind report released this week by FMI-The Food Industry Association.

In-store bakeries have seen a near-recovery in unit sales compared to 2019 and dollar sales are up 21.3% compared to before the pandemic, according to the report “The Power of the Bakery in the store” of IMF.

Bakery unit sales increased 7.4% and dollar sales increased 14.3%, according to the report.

“While many fresh produce departments in the grocery store are experiencing declining sales this year, in-store bakery has seen strong increases in dollar and unit sales,” FMI noted. “In-store bakery home penetration remains high with frequency of purchase and increase in size.”

More than 82% of Americans have purchased at least one item in the past year for their grocery store bakery, according to NeilsenIQ data cited in the report, with an average purchase frequency of about once a month, an increase of 3.6%. Shoppers spent, on average, $5.55 on bakery purchases, up 10.4%.

So what are consumers buying from the bakery department?

Dollar sales of muffins are up 24.2% this year, according to the report, followed by cupcakes (up 23.6%) and cookies (up 21.7%). Cakes, followed by cookies, are the best-selling products in the department.

However, unit sales of cakes fell 23%, followed by artisan breads, which were down 1.3%.

“Retailers have an opportunity to capture a much larger portion of bakery sales, especially in higher-margin indulgent and special-occasion products,” FMI found. “Shoppers are spreading their bakery dollars across many channels. Cultural or ethnic options are in demand and appeal to key shopper segments, such as younger shoppers with families who have higher household incomes and spend more on groceries.”

The biggest driver of bakery sales is freshness, according to the report, with shoppers searching for words like “baked today,” “made in store,” and “made by our professional bakers.” Shoppers like to know when an item was baked to determine its freshness, and most said they believe the store bakery offers fresher items than the commercial bakery aisle.

“From the point of view of shoppers, the in-store bakery is clearly better than the commercial bakery aisle in terms of product freshness and flavor,” the report found. “Service and ingredient quality is also perceived to be better in the store bakery than in the commercial bakery aisle. Meanwhile, the commercial bakery aisle is perceived to be better than the in-store bakery in terms of price and provision of nutritional information.”

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