Think outside the traditional
Home-baked treats can bring a smile to just about anyone. Declining sales in the baking mixes and ingredients category, however, probably don’t have too many retailers smiling.
According to “Baking Mixes — US”, a January report from Mintel, a global market insights firm, the downward trend for baking mix is expected to continue into 2020.
But retailers could help spur sales of store brand items in the category by recognizing and responding to what shoppers are currently looking for on the baking aisle.
“Today’s baking aisle is changing, and it’s being driven by what we at Ardent Mills call the ‘enlightened eater,’” says Donald Trouba, marketing director for Denver, Colo.-based Ardent Mills, which manufactures a range of flours and mixes. “These are highly influential consumers who collect their own information — online or from friends — to educate themselves on today’s food topics. They then share their research and beliefs with friends, family, co-workers and an even broader audience via social media.”
Keep it clean
The Mintel report notes that the primary competitive threats to baking mix purchases are scratch baking and ready-made baked goods, suggesting that consumers want “fresh” from this category — not mixes filled with ingredients they can’t identify. That means retailers need to offer store brand products that provide the perception of making that home-baked treat a little healthier.
“The clean-eating lifestyle has greatly impacted baking mixes,” says Samantha McCaul, marketing manager for Brockton, Mass.-based Concord Foods, which produces a number of baking mixes. “Even when consumers are indulging, they are still seeking authenticity in their diets. They want bakery items to taste homemade — like grandma used to make.
“Manufacturers have responded by focusing on cleaning up labels,” she adds. “They are using shorter ingredient statements, familiar ingredients, no artificial colors, flavors or preservatives.”
Trouba also stresses the need for fewer ingredients.
“One topic that’s of particular interest to this group is the notion of purity,” he says of the enlightened eater. “In baking ingredients, this can mean a number of things such as whether or not a product is organic, gluten-free, made with nothing artificial, non-GMO, unbleached [or] unbromated, to name several.”
In addition to leaving some processed ingredients out, retailers might want to consider adding one health-friendly ingredient: probiotics. While probiotics, which aid digestive health, aren’t typically an ingredient shoppers look for when browsing the baking mix aisle, interest in them is growing.
“Probiotics in functional foods, including baking mixes, has been one of the top trends of 2016,” says Mike Bush, senior vice president for Mayfield Heights, Ohio-based Ganeden, which manufactures GanedenBC30 (a probiotic strain for foods and beverages). “Consumers are becoming more health-conscious and more aware of what they’re eating. They have an interest in looking for additional health benefits in everyday foods and beverages, which continues to drive demand for functional foods.”
In a Ganeden survey, 98 percent of respondents among those who are aware of probiotics said they would buy a food or beverage product that included a health benefit such as probiotics if the product were priced the same as a similar product without health benefits, Bush noted. Consumers also said they were willing to pay upwards of 20 percent more for a product containing probiotics.
Think premium
Besides offering store brand baking products with cleaner ingredients, retailers should consider adding more premium varieties.
“National-brand-better programs are where the action is because a distinction and uniqueness exists with products in this tier rather than mere ‘equivalent’ initiatives,” says Fern Phillips, CEO of Portsmouth, N.H.-based Little Big Farm Foods, which offers a range of baking mix products. She adds that there is no room in the category for valuetier products because national brands such as Jiffy and Martha White play strongly in that space.
One way to go premium is through distinctive flavors and ingredients.
“Premium ingredients reinforce quality and uniqueness, and allow for a higher price point,” Phillips says, citing Madagascar vanilla, Callebaut chocolate and coconut as examples. “Growth can be driven by innovation.”
The perception of premium can also be delivered through varieties that stand out.
“An option for retailers is to look at their portfolio as a way to differentiate from mainstream brands,” Trouba says. “This could mean adding a line of ancient grains or mixes with ancient grains, or even a product such as sprouted wheat flour,” he says, also pointing to packaging as a means of conveying quality.
“Retailers may want to explore some of the newer packaging options that have become available,” he adds. “Many consumers are willing to pay more for premium products, and packaging can be important way to tell the story behind the contents on the inside. Packaging with more colors, different substrates, or convenient features and sizes has the ability to break through the shopping aisle.”
Position them to sell
Just as important as having the right store brand baking products is putting into place the right marketing strategies and tactics to sell them.
“Own-brand teams must recognize that their own brand is the most important ‘national brand’ and support their lines,” Phillips says.
As for what marketing strategies work in this category, Phillips says retailers should be doing a number of things.
“Promotions and merchandising tactics such as coupons, cross-merchandising and end-aisle displays are key to trial, particularly with a higher-priced, premium brand,” she says.
In addition to those tactics, the right messaging on the package could also help sell the store brand. “Free-from” claims are connecting with consumers, as are ones that emphasize convenience.
“Claims that focus on the product’s simplicity are very impactful,” McCaul points out.
Packaging could also highlight convenience, which continues to be an important benefit to consumers, Trouba says.
“To today’s enlightened eater, that could mean anything from smaller packages to novel packaging features to ready-to-use grain mixes and blends,” he explains.
Retailers should also know who their store brand buyers are. For retailers with a younger base of shoppers, one potential opportunity to push sales growth is through highlighting baking ingredients not just as food products, but as part of a social event that can be shared with family or friends.
According to the Mintel report, millennials, in particular, cite both the enjoyment of baking and the fact that they consider it to be a fun activity to share with others as reasons they use baking mixes. The report also notes that households with children and Hispanic households are less likely to cite convenience as a reason for using baking mixes.
And when it comes down to it, the best marketing messages could be the ones that leave consumers feeling happy about their purchase.
“People want to feel good about what they’re consuming; they want to understand their food, which is itself an important benefit,” Trouba notes. “Many baking ingredients are actually quite simple; we just need to tell the story in an understandable way.”
Do consider adding baking mixes with simpler, cleaner ingredients.
Don’t ignore cross-merchandising and display opportunities.
Do engage in product development within the premium baking mix space.
Don’t forget to include product claims that emphasize simplicity, convenience.