KANSAS CITY, MO — It’s an adage as old as time: “Do as I say, not as I do.”
Although this is direction parents typically reserve for their children, it also serves as a reminder that consumers’ intentions don’t always match their actions. That doesn’t mean intentions are meaningless; after all, they’ve paved some pretty important roads. It simply indicates that commercial bakers must look at the whole picture when considering shopper behavior.
Research that goes broad as well as deep can reveal specific idiosyncrasies about not only consumer preferences but also the behavior they can prompt. Understanding this relationship can be key to creating growth that can impact the industry in more ways than meets the eye. In the American Bakers Association (ABA)’s most recent research report — “2024 Bakery Playbook: Translating Consumer Expectations,” sponsored by Puratos — Anne-Marie Roerink, president of 210 Analytics, dove into consumer behavior in a different way.
“Instead of only taking a wide, shallow look at all baked goods, we wanted to also take a deep dive into how consumers are engaging with specific categories,” said Christina Donnelly, senior director, industry relations and strategic initiatives for ABA. “The category-focused playbooks will provide more content and insight for ABA members who produce a variety of categories. To deliver on ABA’s new strategic goal of driving category growth, we need to provide our members with a strong understanding of what the consumer wants today and what we anticipate they’ll want tomorrow.”
So, what do consumers want?
With any study, there’s always good news and bad news. Retrospectively, the industry — as with the US economy in general — is coming off a rough year. In 2023, consumers still felt the impact of inflation, with overall grocery prices up 32% vs. 2019 and record credit card debt exceeding $1 trillion, according to the report.
That said, consumers entered 2024 with renewed optimism. According to Roerink, consumer confidence has improved since the fall of 2023, and — perhaps most importantly — 91% of Americans said they can be persuaded to splurge.
Consumers entered 2024 with renewed optimism. Consumer confidence has improved since the fall of 2023, and — perhaps most importantly — 91% of Americans said they can be persuaded to splurge.
“Is inflation real? Of course, it’s real,” Roerink said. “But while the trade tends to look at inflation month over month, that’s not the reality most consumers live in.”
For starters, consumers live by annual income, typically receiving one raise per year. That means when grocery prices are up 30% but salary increases aren’t, people have to watch their overall budgets. That’s not to say they’re looking at cutting back the way people did during the Great Recession. The big difference is employment: Incomes may not be keeping up with inflation, but the income is still there.
“That means we’re seeing people focusing a lot on price and promotion,” Roerink said. “But still, 91 percent can be persuaded to spend a little more. When we asked why, it was special occasions and holidays, but it was also around nutrition and doing something nice for yourself.”
This story has been adapted from Commercial Baking’s 2024 New Products Annual. Read the full story in the digital edition.
