KANSAS CITY, MO — When COVID-19 hit, commercial baking companies in crisis mode focused on immediate needs like instituting new health and safety protocols and keeping store shelves stocked, all while many new product initiatives were stuffed into a desk drawer. As bakery sales have leveled out from the massive spike experienced during the early pandemic, it’s time to take a pulse check on where consumers are today … and what innovations are worth revisiting.
“The transformations in habits and demographics place bakeries in a better position for growth today in comparison to 2019,” said JP Frossard, consumer foods analyst for Rabobank. He said that now is the time to focus on consumer engagement and lean into experimentation, even with a host of new disruptors.
In fact, it’s more important now than ever before.
“Understanding which trends are gaining momentum and how they’ll disseminate and influence consumer shopping and eating practices will help businesses identify, create and take advantage of emerging growth opportunities,” said Shelley Balanko, senior VP at The Hartman Group.
Two of the most notable consumer behavior trends — indulgence and health-and-wellness — are seemingly at odds … at least on the surface. On one hand there is indulgence, spurred by consumer gravitation toward comforting and nostalgic foods in the early days of the pandemic. On the other, there is the demand for healthier products with cleaner labels, more nutritional power and better-for-you (and better-for-the-planet) ingredients. But there’s a murky middle between those two opposing forces that holds massive potential.
“Those two ends of the spectrum might seem diabolically in conflict,” said Jonna Parker, principal for IRI’s Fresh Center of Excellence. “But in fact, there’s a lot of grey area. And that dance is playing out, especially in baked goods.”
Indulgence in bakery is nothing new. Over-the-top baked goods, whimsical desserts and decadent mashups like the famed cronut and unicorn-flavored everything had a stronghold long before the pandemic. But a proclivity toward foods that harkened to childhood became even more appealing when the world seemed so chaotic and stressful.
“There’s a nostalgic trend that we’re riding hard — and we’re riding it hard because it sells,” Parker said.
According to Mintel data, 72% of US consumers said they enjoy products that remind them of their childhood. And brands are capitalizing on demand.
“Early in the pandemic, consumers turned to baked goods out of a desire for comfort and familiarity. But in the longer term, that trend can still play a larger role.” — Shelley Balanko | senior VP | The Hartman Group
Milk Bar, the New York, NY-based bakery known for its cereal milk ice cream and funfetti-style birthday cakes, is one such brand. Its expansion into grocery in the form of packaged cookies, truffle crumb cakes and ice creams is one of many examples that a love for nostalgia isn’t going anywhere.
“Early in the pandemic, consumers turned to baked goods out of a desire for comfort and familiarity,” Balanko said. “But in the longer term, that trend can still play a larger role.”
Indulgence’s staying power might be attributed to the way in which health-and-wellness factors in. Mental health moved to the forefront of the national psyche during the past two years, and now more than ever, consumers are taking an increasingly holistic approach to wellness.
“Consumers are often looking to baked goods, especially those that lean sweeter or more decadent, for stress relief or emotional satisfaction,” Balanko said. “A conscious indulgence is seen as a part of overall mental well-being.”
Conscious indulgence isn’t limited only to mental health considerations. There are also physical wellness factors to consider. According to a report by Glanbia Nutritionals, 64% of global consumers believe it is okay to enjoy indulgent treats as part of a healthy diet, especially if they offer some type of functional nutrition. And one in five is actively seeking health benefits from foods, per the International Food Information Council’s 2021 Food & Health Survey.
“The idea that ‘I can use this as fuel’ is a really popular part of any food health claim,” Parker said. “People want benefits more than they want the absence of something. This is especially true for young consumers. They don’t want to give up taste, but they still want to eat well.”
Incorporating botanicals like mint and lavender for sleep, stress relief or calm is just one way brands might think about adding value to products that might otherwise be considered occasional treats. Parker also noted dark chocolate and fruit as huge opportunities for innovation.
“There’s a lot of potential with dark chocolate, especially when you can identify a high percentage of cacao on the packaging and through marketing,” Parker said. “It carries with it a certain health halo. The same is true for fruit in baked goods and snacks. You might think about including a fruit filling in a croissant or a mixed berry sponge cake. Again, it’s that health halo that makes people feel a little bit better about what they’re eating.”
This story has been adapted from the June 2022 New Products Annual issue of Commercial Baking. Read the full story in the digital edition here.
