KANSAS CITY, MO — In the past year, because of inflation, eight out of 12 meals were made in the home, according to data from Circana, and bakery plays a significant part in that experience. According to the American Bakers Association (ABA)’s Life Through the Lens of Bakery 2022 report conducted by 210 Analytics, 68% of meals that include baked items are prepared at home. Yet consumers feel like they’re already saving money because they aren’t going out to restaurants or ordering takeout.
“People started to think, ‘I might buy this bread that feels a little bit more like an Italian loaf and makes my sandwich that much better, or I might buy this artisan bread that makes my toast much more interesting because at the end of the day, it’s still cheaper than buying avocado toast at a restaurant,” said Jonna Parker, principal, fresh foods at Circana.
Small celebrations offer big opportunities for bakers
Celebrations are the biggest factor driving premium bakery indulgences, Anne-Marie Roerink, founder and principal of 210, said, but national holidays, birthdays and anniversaries aren’t the only occasions consumers are splurging on. Smaller get-togethers, dinner parties, and even invented holidays (think social media favorites like National Donut Day or National Pancake Day) have become prime excuses for consumers to splurge on a special treat.
Parker said she thinks these second-tier occasions offer significant opportunities for bakery brands.
“We are celebrating more as a society than we ever have,” Roerink added. “We celebrate everything. We’re gathering more at home for dinner parties, we’re swimming in backyards, we’re having game nights … and I think the baked goods industry has done a good job of marketing those everyday occasions in a few instances. But I also think we’re still a little too carried up in those super special occasions and holidays.”
Better-for-you baked goods command premium prices
Health claims are another big factor that drive premium purchases in bakery. Cargill’s “The Sweet Delight: Decoding Consumer Bakery Decisions,” a survey of 1,200 US consumers that looks at motivations and purchasing behaviors related to cakes, pastries and cookies, research identified better-for-you as one area in which consumers are willing to pay more for baked goods, despite economic pressures, with strong interest in offerings that include benefits such as heart health and immune support.
“Natural” products made without preservatives and with clean labels are also ranked of high importance. ABA’s survey confirmed that healthy baked goods are piquing consumer interest with 45% saying they want baked treats that are more nutritious, including items with natural ingredients and low or no sugar.
But health premiumization doesn’t just include personal health. It also includes the health of other people, animals and the planet in a much broader sense, which is of elevated importance among younger generations. Efforts to limit food waste, source responsibly and create sustainable packaging all fall under this umbrella. Even in the face of inflation, research by Dawn Foods research found that 71% of global consumers are still willing to pay a premium for sweet baked goods that are made more sustainably.
Roerink observed that as spending power shifts from Gen X and baby boomers to millennials and Gen Z, these product attributes are going to matter even more.
This story is additional content from Commercial Baking‘s June 2023 New Products Annual. Read the full story in the digital edition.
