A bit of everything: The bagel market’s performance

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A bit of everything: The bagel market’s performance

27 May 2022

Commercial Baking Staff

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Bagels are a bakery product with the potential to elicit strong opinions, particularly from people in the Northeast part of the US, where finding a great bagel is a badge of honor and the quest to find the best never ends.

In January, GrubHub released data on the most popular bagels in NYC based on what New Yorkers ordered from its service in 2021. Not surprisingly, the research failed to find agreement among New York bagel eaters to determine the city’s top flavors. But one thing was certain: There is a fiery passion for bagels everywhere.

According to data from Google Maps, the top bagel-loving states based on orders from retail and independent bagel shops are, not surprisingly, New York and New Jersey and — wait for it — Colorado. But in wholesale, IRI research shows the strongest growth for bagels is concentrated in Texas, Florida, Alabama, Oklahoma, Louisiana and Georgia. Center store bagels are growing across regions except in the Northeast, where perimeter bagels are overdeveloped. The perimeter is seeing strong growth across regions, with the slowest in the Plains region at 2.3%.

Bagels have also been outperforming other center store bread and roll categories such as breads, muffins, flatbreads and pitas. Total US sales for center store bagels were $1.3 billion and $246.6 million for perimeter bagels.

From a growth rate perspective, perimeter bagel dollar sales are up 12.1% from a year ago, but center store is also showing decent growth with a 4.3% increase in dollar sales. Center store unit sales remain flat with growth driven by price increases, while perimeter units show strong growth similar to its dollar sales. Like other perimeter bakery items, the bagel category is still working to regain ground lost to center store during the pandemic.

Refrigerated and frozen bagels are also seeing declines, perhaps because consumers are choosing the freshness and variety of bagels that can be found in the perimeter.

The bagel remains a trusted go-to for breakfast and brunch, and at-home consumption remains high as many consumers continue with work and school from home. Despite its popularity, the category is also known for being somewhat of a one-trick pony. Unlike interchangeable goods like sliced bread, flatbread and tortillas, bagels offer a distinctive consistency and benefit from toasting, which limits on-the-go consumption.

However, less-dense bagel thins could help the category better compete with the growing popularity of versatile flatbreads.

Bagels are typically “what you see is what you get.” But the bread’s classic roots don’t preclude the addition of healthy inclusions. IRI shared that the category is demonstrating growth in products with health-and-wellness claims including non-GMO, organic, no high fructose corn syrup, gluten-free and low-calorie, usually in the 101-199 calorie range.

The category’s top health-and-wellness claims are kosher, doing $1.2 billion in sales; sweetener-free at $184.0 million in sales; no high fructose corn syrup at $182.1 million in sales; organic at $104.6 million in sales and low-calorie at $57.6 million in sales.

Dave’s Killer Bread, a Flowers Foods brand, is proving to be a standout in the category. The company’s high-protein organic bagels have no high fructose corn syrup and are made with a grain blend of quinoa, spelt, rye, millet and barley. Available in Epic Everything, Plain Awesome, Cinnamon Raisin Remix and Boomin’ Berry varieties, the products garner public attention with consumers making TikTok videos bemoaning supply chain disruptions that have left the product missing from grocery shelves for months.

With better-for-you being a perennial trend, bagels featuring ingredients that are low carb, gluten-free or veggie-based can become standouts in the category, Attobelli advised.

One player building on a base of simple, natural ingredients is Ace Bakery, a brand of Etobicoke, ON-based Weston Foods, which was acquired by FGF Brands in 2021.

Despite the variety of inclusions that can be added to a neutral base, few are taking advantage of the power of the limited-time offering, which could be an opportunity for manufacturers in the category, according to Attobelli. One exception to this rule is Thomas’, who offers a seasonal pumpkin spice variety.

Attobelli also highlighted a Taki-flavored bagel, made with the popular spicy Takis rolled tortilla chips from the Grupo Bimbo brand Barcel USA. The hot and spicy combo is on-trend and one tactic that could capture the attention of younger generations. Bagel spin-offs, minus the bagel, are also making an impact throughout multiple categories, with everything bagel seasoning gracing everything from dips and flavored bacon to ice cream.

“Bagel sales will probably remain elevated in 2022, but supply chain unknowns will likely continue to hamper the growth rate,” Attobelli concluded. “As those issues dissipate, the category can likely expect continued growth.”

This story has been adapted from the April 2022 Q2 issue of Commercial Baking. Read the full story in the digital edition here.

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