In-Store Bakery Opportunity To Reach More Consumers

CHICAGO –  New research from the Perishables Group reveals in-store bakeries may not be meeting the needs of a broad consumer base.

The implication was provided in the Perishables Group’s new Bakery Department Drivers report, which integrates point-of-sale supermarket data, consumer demographic profiles, shopper loyalty card data and secondary research to determine the most important factors impacting department performance.

Fresh department sales, including produce, deli, bakery, seafood and meat, comprised a growing percentage of total store sales in recent years; however, the in-store bakery’s share of fresh sales was flat at 8 percent last year, despite rising dollar and volume sales.

The report also attributes a portion of the in-store bakery’s 1.6 percent dollar growth last year to bakeries carrying more gourmet products with higher price tags.

“Gourmet products enhance the image of in-store bakeries and fuel impulse purchases,” said Jonna Parker, director of account services, “but they don’t necessarily appeal to everybody on an everyday basis.”

The occasion or impulse-driven purchase pattern is supported by the fact that the average household purchases from the in-store bakery 12 times per year, and just 12 percent of baskets contain more than one bakery item. These statistics are lower than any other fresh department, except seafood.

“The greatest opportunity for in-store bakeries to grow sales is to adjust strategies so they appeal to a broader base of consumers, and recognize that those core consumers vary by category,” said Parker.

The importance of positioning items in ways that appeal to the everyday consumer is illustrated in the research through pie performance trends. The average supermarket carried 20 pie items in 2010, but the average household purchased pies just 2.4 times. Pies can be repositioned from a holiday treat to an everyday dessert through creative flavors and a variety of sizes. Sales of mini/sliced/half pies grew 13.2 percent in 2010. Even during the holidays, consumers showed they want more than just apple and pumpkin pies; in the fourth quarter of 2010, the largest increase of mini pie flavors occurred in blueberry and éclair pies.

Parker said, “In an impulse-driven department like the in-store bakery, it’s essential to implement a consumer-centered strategy rather than a production-centered strategy, in order to appeal to the largest number of consumers possible.”

For more information or to purchase the Perishables Group Department Drivers reports, e-mail or call 773.929.7013.

About the Perishables Group

The Perishables Group is a Chicago-based consulting firm focused on creating innovation and value for clients in the fresh food industry. Perishables Group expertise includes consumer research, analytics, marketing communications, category development, supply chain management and activity-based costing.

Source: Perishables Group