Bakery departments are back in business
Ever since COVID reared its ugly head in 2020, many celebrations were put on hold as birthdays, holidays and special occasions were spent only with the closest of friends and family, with large gatherings out of the question.
That meant the fresh bakery segment in supermarkets saw a huge drop in activity as the need for cakes and other large dessert items were virtually non-existent.
“At the onset of the pandemic, we saw a shift in consumer habits in the bakery,” said Maria Brous, director of communications for Lakeland, Fla.-based Publix Super Markets. “Customers shifted from wedding cakes, larger cake orders and platters to more breads, rolls, single-serving bakery items and do-it-yourself kits.”
During the first 11 months of 2021, IDDBA reports that bakery sales reached $33.3 billion, an increase of 4.5% over the same period in 2020.
However, the tide started to change in 2021 once people started getting vaccinated, and there was a quick resurgence and demand for special-occasion cakes and treats from the fresh bakery department.
According to recent figures from the International Dairy Deli Bakery Association (IDDBA), center store bakery carried baked goods sales in 2020, but perimeter fresh bakery drove growth in 2021. During the first 11 months of 2021, bakery sales reached $33.3 billion, an increase of 4.5% over the same period in 2020. Additionally, fresh bakery sales were above 2019 levels by nearly 10%.
“The bakery department is experiential and it is important to keep people engaged whether online or in the store,” said Jeremy Johnson, vice president of education for IDDBA. “This includes cross-merchandising and eye-catching displays in store, but also easy online ordering and shortening the step from inspiration to purchasing online.”
As of December 2021, Publix has seen customers transition back to pre-pandemic bakery items including decorated cakes, bakery platters for wedding and graduation celebrations and family gatherings.
Chris Mentzer, director of operations for Rastelli Market Fresh, with locations in Marlton and Deptford, N.J., noted how things changed quickly at the beginning of the pandemic, with stores closing their cookie bars, bringing in new packaged products for the bakery that they wouldn’t have carried otherwise and eliminating sampling.
“With each phase of the pandemic, we have slowly been able to transition toward some sort of normalcy, although some of these practices will likely remain with us for a long time,” he said. “But in 2021, we have seen a big bounce back. The bakery department, like most departments in fresh foods, has been consistently growing and I would say that we started to notice a significant change in the spring of 2021.”
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Paul Kneeland, vice president, fresh operations for California grocer Gelson’s Markets, notes there are myriad ways that stores should be highlighting the bakery department to entice customers to return. These include expanding the assortment of items, drawing attention to new products and offering special deals.
“Promotions are important, so there should be aggressive advertising on the freshness and convenience of bakery,” he said. “It’s important to take advantage of every holiday and special occasion on the calendar and make a big deal out of them.”
Like many grocery retailers, Publix has made a concerted effort to enhance its fresh bakery in recent months and is doing what it can to get customers thinking about the bakery again.
“We continue to introduce new and innovative items to our bakery offerings, including new decadent desserts and towering-tiered cakes,” Brous said. “Our role has always been to provide our customers with the products and services they are looking for when they are shopping. In addition, we meet our customers where they are in-store or online.”
'The bakery department, like most departments in fresh foods, has been consistently growing and I would say that we started to notice a significant change in the spring of 2021,' said Chris Mentzer, director of operations for Rastelli Market Fresh.
At Rastelli Market Fresh, the company is being aggressive with specials and sale items to entice the sale of fresh bakery items.
“However,” Mentzer noted, “there are still concerns over COVID-19, which has caused our guests to continue to be wary of how product is displayed, packaged and sampled. The biggest challenge is getting safe packaging that displays the product properly, while in the past the product was displayed openly for better eye appeal.”
Trends for 2022
The bakery departments know the key to success is giving customers what they desire, and that involves staying on top of all the new dessert crazes from restaurants and popular food shows and social media.
“We continue to see the sweet and savory snacking items have popular appeal as well as the return to the familiarity of donuts, decadent desserts and chocolate,” Brous of Publix said.
Eric Richard, former industry relations coordinator at IDDBA, noted that many consumer needs right now are for smaller bakery items, such as single-size cupcakes and small cakes, and that the demand for these items is at an all-time high.
Rastelli’s Mentzer said his stores are still individually packaging rolls, bagels, fresh breads and items from the cookie bar that have either been self-service and/or bulk in the past and he does not foresee this changing in 2022.
While Kneeland of Gelson’s Markets questions whether the fresh bakery category will ever be the same as before COVID in terms of marketing and product presentation, he stressed the importance of evolving and doing what’s necessary to get customers back.
“We need a connection between promotion and trial,” he said. “We need to think through the new customer experience and position the department as a solution for all their future bakery needs.”