Innovation matters because the retail bakery industry is ever-changing.

The bakery cafe segment is faced with numerous opportunities to achieve growth, although brands must adapt to shifts in consumer behavior, according to Technomic’s 2018 Bakery & Coffee Cafe Consumer Trend Report.

Technomic’s new study reveals that health trends are pushing consumers toward better-for-you items at the center of cafe menus. In addition, a shift toward more off-premise occasions can benefit cafes with a grab-and-go focus as well as those that offer delivery service.

All this points to a pressing need for innovation in new product development.

“Despite some recent headwinds caused by increased competition and shifting consumer demands, bakery and coffee cafes are still well-positioned for growth,” explains Charles Winship, senior research analyst at Technomic. “However, cafes must be willing to evolve with a growing emphasis on functional offerings, new technology that enhances convenience and operational flexibility to satisfy consumers’ various need states.”

Key takeaways from the report include:

• 25% of consumers visit bakery cafes at least once a week
• 54% of bakery-cafe consumers visit these locations more so for their food or a specific food product
• 44% of coffee cafe consumers say they are loyal to a specific cafe because it serves their preferred coffee

In other recent food studies applicable to bakery’s future, a new Mintel report reveals that sugar is at the top of parents’ watchlists when it comes to what their kids eat and drink. In fact, 60% of parents with kids aged 12-17 and 55% of parents with kids aged 18+ in the household report saying “no” to their kids’ food and drink choices based on sugar content. But while sugar is a key concern for parents, just 11% of US food and drink launches aimed at children (ages 5-12) from June 2017-May 2018 had low, no or reduced sugar claims, according to Mintel Global New Products Database.

With parents on the lookout, America’s youngest consumers are increasingly growing health-conscious themselves. In fact, one quarter (25%) of teens aged 15-17 say they worry about staying healthy, with another 49% agreeing that they think drinking soda is unhealthy.

“Generation Z has come of age at a time when health and wellness is a major consideration. Many younger members of Generation Z follow their parents’ healthy ways and it seems health-consciousness only gets stronger as they approach adulthood. However, health is multi-faceted for this group, suggesting that better-for-you formulations can be expanded to give this generation options that fit with their ever-changing diet priorities,” says Dana Macke, associate director for lifestyles and leisure reports at Mintel.