In-Store Bakery Is Becoming A Consumer Magnet: Report

The in-store bakery is becoming increasingly attractive to consumers, according to a new report. A staggering 95% of shoppers consume department products at least occasionally and 63% do so weekly, according to the “Power of In-Store Bakery 2022” report published by the Food Marketing Institute (FMI).

The inaugural report notes that industry sales are also strong, with unit and dollar volumes up 7.4% and 14.4%, respectively, over the past year, with muffins (24.2%), cupcakes (23.6%) and cookies the strongest increases in dollars. (21.7%). Cakes and cookies were the best-selling items in the department.

“Our first exploration into consumer perceptions of in-store baking reveals several opportunities to improve supermarket strategies,” Rick Stein, FMI’s vice president of fresh foods, said in a statement. “Build customer loyalty by engaging shoppers with freshness and variety; incorporate and communicate quality ingredients; and lead with transparency on ingredients and nutritional claims, even for those indulgent items.”

In fact, shoppers report that freshness is top of mind when they think of their in-store bakery, the report says.

“Fresh-related claims also top the list of what matters to shoppers and is a key differentiator for the in-store bakery above the bakery aisle. Most shoppers believe that made-from-scratch baked goods are of superior quality, especially for cakes, pies, and cupcakes.”

The report adds that baking from scratch is less important for bagels, breads and rolls, and shoppers are less sure about the importance or impact of items that are partially produced elsewhere.

While the report reveals that shoppers spend their bakery dollars in a variety of places, it adds that 78% buy functional items, such as bread, buns, bagels, and rolls, at the same store where they buy most of their groceries.

However, only 51% say the main grocery store is their main destination for in-store bakery items. For indulgent selections like store-made cakes, pies, and desserts, shoppers look to specialty bakeries (24%), grocery stores other than their flagship store (11%), and online options (6%).

Shoppers who visit the in-store bakery weekly include millennials (35%), urban dwellers (42%); large households of three or more people (49%); and households with an income of at least $120,000, the report says.

“Shoppers who are more active in their in-store bakery are key shopper segments in that they are younger, have larger homes, are more likely to have children, are wealthier, spend more on groceries on a weekly basis, and are more likely to do at least some of their grocery shopping online,” the report says.

Meanwhile, retailers can further boost department sales by expanding the range of indulgent options and inspiring impulse buys, the report notes.

“Many shoppers recognize that their purchases of indulgent items such as donuts, cookies, coffee sandwiches/cakes, individual desserts, and cupcakes are impulse buys,” the report says. “Whether for functional or indulgent items, shoppers say they would be affected by special offers or promotions to make impulse purchases.”

Among the key factors that will drive shoppers to purchase an unplanned bakery item, in addition to sales or special offers, are eye-catching displays (cited by 42% of consumers); more convenient than baking the item myself (38%); sampling (36%); and coupons (33%).

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