ANAHEIM, CA — As consumers face record-high inflation, their views of value are shifting, especially when it comes to indulgences like baked goods.
The International Dairy Deli Bakery Association (IDDBA) has identified five guiding trends for its members to follow, and one of the most critical is the notion of Worth the Value. Despite such inflationary pressure, consumers are not necessarily heading straight for the lowest-priced item, nor are they eliminating indulgences altogether.
In fact, during IDDBA 2023, Whitney Atkins, IDDBA’s VP of marketing, and Heather Prach, VP of education, outlined evidence showing that consumers are prioritizing their emphasis on value over cutting their spending.
“The good news is that we’re seeing high engagement,” said Heather Prach, IDDBA’s VP of education. “There are three ways to increase sales: More people buy, people purchase more often, and people spend more.”
However, dollar sales increases in bakery and throughout the store are happening due to price inflation rather than increased unit sales. This is where occasions can come into play, and technology advances are greasing the wheels.
“Shoppers are most likely to splurge for special occasions and entertaining,” Prach said. “So, when they do, how can retailers maximize that?”
The answer can be found in creating events tied to holidays or bringing holidays into everyday occasions. In-store tactics include sampling and demos in theatre-style production as well as e-commerce merchandising.
“Think about digital order and pickup for bakery products like cupcakes around Valentine’s Day,” said Whitney Atkins IDDBA’s VP of marketing. “But also remember that consumers are looking for ways to combine everyday life with an experience or occasion.”
“In the past three years, the industry jumped forward five to ten years … because there wasn’t a choice.”— Heather Prach | VP of education | IDDBA
Technology is not just a useful merchandising tool that makes life easier for consumers. It’s also a way to create these kinds of promotions efficiently in a labor-strapped economy.
“Innovation is the result of solving an issue,” Prach said. “There are some things that forever changed — and changed rapidly — during the pandemic. We knew e-commerce was on the horizon, but there were also a lot of hurdles with brick and mortar. In the past three years, the industry jumped forward five to ten years … because there wasn’t a choice.”
As life returns to something similar to normal, those technology advances remain a reality. They are tools that can support all IDDBA’s guiding trends, whether it’s health, convenience, value or sustainability.
For bakery manufacturers and in-store bakery operators, automation is creating efficiencies in labor-strapped areas, while artificial intelligence applications — especially where equipment is concerned — streamline training and help with retention.
“Today’s technology makes possible what was once impossible,” Atkins said.
Further discussions about technology, innovation and the other guiding trends can be found on IDDBA’s monthly podcast.
