MADISON, WI — 2020 was a year that called for resiliency in spades, so what could be more uplifting than finding reasons to celebrate small successes and hard-fought wins? Cake, while noticeably lagging in sales, still played a role in 2020. It was, however, dictated in part by a new set of rules that focused on only that was essential, resulting in smaller gathering sizes and the elimination of extraneous, impulsive trips to the store.
Consumers really needed — and deserved — something to celebrate in 2020. An optimistic approach to living life in an evolving new normal found people stocking up on cakes from the center store, producing a growth of $347M, up 11.7% in 2020 vs. a year ago.
In those center aisles, snack cakes also saw a boost with $1.16B in sales, up 7.5% in 2020 vs. a year ago. Frozen sweet goods experienced $266M in growth, up 20.1% compared with last year.
IDDBA pointed out that the rise in purchases of frozen sweet goods demonstrated consumers’ plan-ahead mentality as they stock one or more refrigerators or freezers at home, according to Eric Richard, industry relations coordinator, Madison, WI-based IDDBA.
With consumers favoring the reliability of the center aisles while spending less time shopping inside the store, the perimeter bakery, a place where browsing for beautiful, delicious things is the norm, felt the impact. Sales of $4.1 billion in perimeter cakes reflected a 4.4% drop from the previous year. The loss is noteworthy as the vast majority of cake sales fell within the perimeter, roughly $1 billion in the fourth quarter, according to Chicago-based IRI. During fourth quarter, sales of perimeter cakes declined 5.9% vs. a year ago. Cookies and pies in the perimeter bakery also incurred associated losses of 4.9% and 3.6%, respectively, in 2020. In contrast, the growth of shelf-stable, center-store cakes grew by 12%.
An optimistic approach to living life in an evolving new normal found people stocking up on cakes from the center store, producing a growth of $347 million, up 11.7%.
Changing consumer habits
Evolutions in how people live and shop may foretell a yet-to-be-determined impact, exemplified by changes in the purchase and consumption of snack sizes. Pre-pandemic smaller snack sizes were often used for on-the-go eating occasions and convenient snack options. Now, with more consumers remaining at home for school and work, snacking is playing an increasingly important role.
Jackson, MI-based Dawn Foods is seeing a rise in the popularity of miniature versions of cakes and other celebratory baked goods. This included 19% growth in cake bites and 25% in cake slices during 2020, according to Nielsen Total Store View, xAOC, for the four weeks ending Nov. 28, 2020.
Although not quite the same experience as enjoying a full-sized bakery cake, smaller-sized cake bites, slices and snack cakes offer consumers an element of cake-worthy indulgence with less guilt. These simple snack breaks are becoming particularly important as consumers use treats to break up the monotony of long days at home. Smaller package sizes also reflect a rise in the number of smaller household sizes.
IDDBA found sweet bakery treats offer an element of consistency and comfort and are increasingly being consumed during the morning daypart. For times deserving of a little more pomp and circumstance, consumers are turning to the frozen aisle for cakes as a treat for an impromptu celebration or smaller gathering or as a reward for simply surviving another day at home.
Portioned indulgence
The need to provide multiple meals and snacks for the whole family throughout the day is also prompting the need for more large-size multi-serve and multi-pack items, products that are up more than 11%, according to IRI. As work- and school-from-home continues in many states, consumers will further refine their consumption habits. Additionally, these eating patterns hold the potential for another evolution if more companies choose to embrace a longer-term hybrid model of part-time work from home, predicted Tim Grzebinski, client insights, principal, dairy and bakery, IRI.
Moving forward, it’s expected cake in its many forms will still play a role in indulgence, particularly as families, friends and co-workers seek new ways to reconnect in 2021. Bakers looking to re-capture the category can find a balance between providing larger, gathering-sized items — perhaps in more limited SKUs — along with variety-centric smaller package sizes that fit into the growing number of smaller households and the associated lifestyle needs and wants of those who indulge on a slightly reduced scale.