Satisfy evolving consumer demands

Few food product categories tantalize three of the five senses — sight, smell and taste — as much as baked goods. Whether taking in captivating aromas from a baked goods aisle or the mouth-watering scent of products baking in-store, shoppers are experiencing and demanding a wider variety of unique baked goods featuring simpler, more healthful ingredients in varying package sizes. This reality provides opportunities for retailers offering store brand baked goods.

Brisk demand for many baked goods segments is reflected in rising retail category sales. For the 52 weeks ending May 17, dollar sales of private label refrigerated baked goods hit $140.8 million, up 6.5 percent versus the same year-earlier period, reports Information Resources Inc. (IRI), a Chicago-based market research firm. Meanwhile, sales in many shelf-stable private label baked goods categories were also up for the 52 weeks ending June 14. (See the table, p. 54.)

Provide healthful options

Driving the store brand baked goods category are great-tasting grain breads, pretzels in many formats and “free-from” products unique from commercial bread offerings, says Sandra Zanette, director of marketing and business development for Backerhaus Veit Ltd. (BV), Mississauga, Ontario. The kosher small-batch craft bakery services large-chain retailers, multi-unit foodservice operators and c-store chains with artisan breads, rolls, pretzels, gourmet baked products and more. Store brand opportunities include developing products with simple ingredients, she says.

Mike Pinkowski, president, SatisPie LLC, Rochester, N.Y., also feels that clean ingredient labels are important. Clean labels could reflect the removal of ingredients such as trans fats, high-fructose corn syrup and artificial ingredients from products.

“We … have worked to stay ahead of the market on clean ingredient declarations, high-quality fillings and crusts, offered at a slightly value price,” he notes of his company, which manufactures frozen ready-to-bake pies for in-store bakeries and the frozen aisle.

Not only do customers want clean labels, but they’re also increasingly concerned about genetically altered foods, states Michel Saillant, owner and president of Boulart, a baked goods company headquartered in Lachine, Quebec. In fact, 57 percent of Americans are concerned that genetically modified foods pose a health hazard — up from 46 percent a decade ago, he relays, citing recent research from The NPD Group, Port Washington, N.Y.

“Ninety-eight percent of our production is non-GMO Project Verified,” he adds. “All of our breads are made with no additives or preservatives, yet they have an exceptionally long shelf life. We believe encouraging demand for healthy, nutritionally balanced authentic bread is in everyone’s interest.”

In Saillant’s opinion, the baked goods category will evolve in coming years and be segmented based on category or product benefits.

“We can expect healthier and better-for-you options, and organic, to gain in importance in the coming year,” he predicts.

Package freshness

When it comes to packaging for bakery goods and other products, shoppers are most interested in options that retain freshness and are resealable and multifunctional, says Amanda Topper, food analyst for global market research firm Mintel, in the firm’s July 2014 “Food Packaging Trends” report.

“Despite innovation, many shoppers are concerned about product packaging safety and its impact on the quality of the food they purchase. Transparent manufacturing information and easy-to-read packaging claims can help minimize this concern,” she adds.

One common misconception about store brand baked goods is that product freshness is somehow compromised, notes Luca Nava, general manager of Bauli USA Inc., New York — part of Bauli in Verona, Italy, and the producer of Italian confectionery goods such as Panettone, Pandoro, croissants, specialty cakes and more. Packaging for Bauli’s new mini products highlights the concept of fresh baked goods by showcasing products through transparent packaging, capturing consumer attention.

And Pinkowski recommends clear-domed packaging to help with store brand baked good sales.

“Clear-domed packaging is critical to successful sales,” he adds. “Care in placing the product into the packaging reduces shrink and stales. During store checks, we often see product that is placed in packaging that has been damaged during handling.”

Retailers also will want to offer smaller sizes. Trends indicate consumers are enthusiastic about portion-controlled pre-packaged snacks, so Bauli developed bite-sized versions of its croissants, Panettone and Pandoro, Nava says.

Plus, offering convenient sizes helps retailers meet customer needs and grab ‘n go opportunities, Zanette adds.

But “proper” packaging is not enough. To compete against the national brands (and retailer competitors), retailers must invest in their brand imagery and support for store brands — and remember that packaging influences the quality perception of a product, Saillant says. He urges retailers to create something unique and different from the classic bakery codes to increase brand recognition and brand preference.

“The focus should be put on the product itself. People buy with their eyes first,” Saillant adds.

To help retailers here, Boulart offers category-management and brandsupport services.

“We try to create, when possible, a synergy between the prepared food section and the bakery department. It’s a great way to enhance the experience and increase the brand recall,” Saillant states.

Sell it well

While ingredient decks and packaging are crucial, merchandising is also an important step in completing any baked goods sale. Zanette recommends that retailers cross-merchandise store brand bakery products with other store brand items to bundle shopping and provide quick solutions while garnering incremental sales and exposure of other categories.

Store public announcement systems could also tout hot-baked programs at specific times to attract customers while providing theater and aroma. The influence of foodservice and the availability of similar items in a neighborhood supermarket are also driving change, she adds.

Saillant sees opportunities in premium store brand products advertised as “better than the national brand.”

Meanwhile, Pinkowski believes that effective merchandising can be driven by supplier purchasing volumes.

“Often, we are offered deals from our vendors on certain ingredients [fruits] that allow us to aggressively market products.” Pinkowski says. “Our customers who work with us on these products see significant cost savings and the ability to promote at retail.”

Do offer customers clean ingredient labels and healthful options.

Don’t forget to provide smaller, more convenient packaging options.

Do invest in product packaging that showcases product freshness.

Don’t miss opportunities to cross-merchandise own-brand baked goods with complementary items.