U.S. consumers have been caught in an economic freefall over the past two years, but the crisis appears to be nearing an end. However, the significant changes in attitudes and behaviors brought about by these recessionary pressures persist, with consumers continuing to rethink what value means and monitor spending carefully. In this environment, the growing focus on nutrition as a means to wellness—coupled with renewed interest in eating at home and demand for “comfort food”—has spurred bakeries to provide healthy products that offer high-quality ingredients and a restaurant-quality experience at appealing prices.
These combined trends have resulted in steady, if modest, growth in sales of fresh baked goods over the past five years. Retail sales of fresh bread and sweet baked items topped $16 billion in 2009, up 4.2% from the previous year. And as bakeries grow ever more creative in meeting consumer demand for specific types of products and the economy improves, this rate of growth is likely to improve. Taking all market trends into account, Packaged Facts projects that the market will grow by 26% between 2009 and 2014, to reach $20.1 billion at retail.
A completely new report from Packaged Facts, Fresh Baked Goods in the U.S. offers a comprehensive look at the overriding trends in the market. The report examines baked goods that are prepared fresh at both in-store and stand-alone bakeries, using preparation methods such as made-from-scratch, mixes, par-baking (or pre-baking) and thaw-and-heat. It also analyzes trends in the key retail channels through which baked goods are sold—both stand-alone bakeries and in-store outlets—including traditional supermarkets, supercenters/mass merchandisers, natural food stores, and warehouse clubs. The report also examines activity at the foodservice level, where trends in baked goods often start, focusing on high-growth areas including bakery cafés.
A special feature is May/June 2010 custom Packaged Facts research on consumer attitudes and purchasing patterns. Specifically tailored for this report, the survey details consumer preferences for baked goods channels and items purchased, in addition to other psychographic indicators. Additional demographic analysis derives from data compiled by Experian Simmons, New York, NY, including indexing of consumers most or least likely to often eat different types of breads. The report also breaks out sales by type of bread or sweet baked good for numerous segments, details market growth drivers and projects future sales, identifies competitive opportunities including sustainability appeals, and tracks trends at in-store bakeries.
Market Insights: A Selection From The Report
Supermarkets and Bakeries Are Dominant Retail Venues
Baked goods are sold in an ever-broadening range of retail venues, including mainstream supermarkets and grocery stores, mass merchandisers and supercenters, warehouse clubs, natural food stores, and gourmet/specialty food stores (including specialty bakeries). The products are also sold through a host of foodservice channels, including coffee shops, bakeries, delis and quick-service restaurants. Packaged Facts estimates that supermarkets and grocery stores lead the market for fresh baked goods, accounting for 56% of total retail dollar sales in 2009. Supercenters and mass merchandisers account for only 9% of total fresh baked goods sales, but that number is likely to grow in 2010 as the impact of the recession lingers. [Figure 1-1]
At warehouse stores, “bigger” is better and “more” is the order of the day. With 22% of in-store bakery customers shopping at warehouse clubs, according to Packaged Facts custom research, warehouse clubs are a definite force in the in-store bakery market. More and more consumers have flocked to the channel as a result of the recession, and the popularity of Sam’s Club, Costco and B.J.’s Wholesale Club have grown dramatically. With a focus on bulk purchases, the in-store bakeries of these stores are known for their size and affordable fare. Sam’s Club, for example, can charge half the price of other in-store and independent bakeries for traditional sheet cakes. And consumers looking to serve 100 people at a birthday gathering will not find lower prices than those offered by warehouse clubs. Additionally, 24-packs of cookies, doughnuts and other bakery items cover large table displays throughout the bakery.
On the other hand, the product selections usually tend...
It comes as no surprise that “good-for-you foods” was among the top five food trends for 2010 at the 35th Winter Fancy Food Show in San Francisco, as reported by the website specialtyfoods.com (January 19, 2010). The panel of experts who ranked the top food trends were merely confirming a long-growing trend toward healthier eating in the U.S. One of the ways consumers are “eating healthy” is by pursuing foods and beverages with a higher nutritional value. In Packaged Facts’ May/June 2010 consumer survey, which is based on a national sample of 1,881 U.S. adults, 35% of the individuals surveyed agreed with the statement, “I frequently use nutritionally fortified food and beverage products,” with 8% indicating strong agreement. Additionally, 51% agreed with the statement, “I love eating healthy” and 29% agreed that “I eat very healthy.” [Table 4-1]
Consumer Interest in Health, Convenience and Localism Fuel $16 Billion U.S. Market for Fresh Baked Goods
New York, July 29, 2010 — Consumer interest in healthy eating, artisan foods and “localism” countered recessionary pressures and helped fuel the fresh baked goods market to grow 4% in 2009 to reach $16 billion, according to Fresh Baked Goods in the U.S. by market research publisher Packaged Facts.
Total fresh baked goods sales experienced slow but steady growth in the 2%-4% range throughout the 2005-2009 period, with the exception of 2008 when the market saw almost 6% growth. Fresh baked goods sales from in-store bakeries including those of warehouse clubs also experienced steady growth, in the 2%-5% range, reaching $11 billion in 2010 and comprising nearly three-quarters of the total retail market.
Packaged Facts projects that the market for fresh bakes goods will exceed $20 billion by 2014.
Packaged Facts divides the fresh baked goods market into two major product classifications: sweet baked goods and breads. The sweet baked goods classification encompasses cakes, cupcakes, cookies, pies, brownies and other baked dessert products. The breads classification encompasses bread (including sliced and unsliced loaves), rolls, pitas and croissants. This report also discusses breakfast baked goods (which overlap both classifications), including doughnuts, muffins, breakfast breads, bagels/bialys and sweet rolls.
“Although fresh baked goods are produced and sold in a wide variety of retail channels, certain overriding trends have affected how these products are marketed across most channels,” says Don Montuori, publisher of Packaged Facts. “For example, consumer demand for specific kinds of products—such as those that fill specific dietary needs or budgetary concerns—has led retailers to adapt in terms of both product offerings and marketing strategies. In the fresh baked goods market, those bakeries that have managed to succeed in this challenging environment have done so by evaluating and quickly responding to these shifts in consumer demand with products that fulfill a variety of consumer needs and wants.”
A new report from Packaged Facts, Fresh Baked Goods in the U.S. offers a comprehensive look at the overriding trends in the market. The report examines baked goods that are prepared fresh at both in-store and stand-alone bakeries, using preparation methods such as made-from-scratch, mixes, par-baking (or pre-baking) and thaw-and-heat. It also analyzes trends in the key retail channels through which baked goods are sold—both stand-alone bakeries and in-store outlets—including traditional supermarkets, supercenters/mass merchandisers, natural food stores, and warehouse clubs. Additionally, the report examines activity at the foodservice level, where trends in baked goods often start, focusing on high-growth areas including bakery cafés. For
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