Alfredo Sanchez, owner of Azteca Bakery, says that bakery sales continue to grow in step with the rising popularity of authentic breads and indulgent cakes, particularly among both Hispanic and non-Hispanic customers who are seeking out new flavors.
One of 10 locations of Azteca Bakery, his 6,000-square-foot store in Streamwood, Illinois, caters to a broad customer base, which is exactly what the bakery owner wants. He does not want to be known exclusively as a Hispanic bakery. He wants the general public to find something delicious to enjoy at his bakeries and dessert shops. That’s why his bakery carries novelty desserts such as cake pops, frozen treats, and ice cream in addition to a full line of Hispanic breads, tres leches cakes and pastries.
“We get a lot of different cultures shopping here,” he says.
On a larger scale, Sanchez is in the final stages of opening a bakery manufacturing warehouse in Streamwood, which he expects to be up and running by the end of 2019. Conchas and cookies are the products he expects to make in high volumes at this new facility.
In the retail store in Streamwood, Sanchez says he relies on BakeMark for innovative new products, including ready-to-bake muffins and croissants.
“We always do business with BakeMark — since I’ve been in business,” he says. “We have a very good relationship. We do more and more with them. All of our muffins come from BakeMark. They are ready to bake, frozen in the cup, and we bake them. We buy 15 different frozen items from BakeMark. We also buy frozen croissants from BakeMark. It’s very important to bake them here, so they come out fresh.”
Sanchez points to a lack of skilled labor in the bakery workforce as a continuing issue that makes buying ready-to-bake items a more attractive option for his operation.
“It’s making it easier for us to manage our production,” he says. “We still do a lot from scratch, but it helps us a lot.”
Having the right equipment in your bakery is equally important.
“Now we are replacing equipment at this store with new rack ovens this year,” Sanchez says. “One of the important things to stay in business is to replace your equipment when you can.”
Another leading Hispanic retailer in the Chicagoland shares valuable lessons for building your business.
Carnicerías Jiménez, a chain of eight supermarkets (each with its own bakery), is one of the oldest supermarket operators serving the Hispanic and ethnic markets in the Chicagoland and surrounding suburbs. The company opened its first store in 1975 — a 1,500-square-foot location on Pulaski Road and 26th street in the heart of La Villita in Chicago. Over the past four decades, the company has steadily grown.
There are many pockets of Hispanic and other ethnic populations scattered throughout the Chicago suburbs. Just to the west of Addison, there are many citizens of European descent who lives in the area. The key to success for Jiménez lies in finding the right location, starting with a strong Hispanic base and then attracting other communities to appreciate the quality and selection of fresh foods available at Jiménez.
“We have a big Hispanic presence here. There’s a strong following,” Addison store manager Jim Demeas says. “We do get a mix of customers though. It is not a big percentage, but I see different people coming into the store. Europeans love a great bakery just like Hispanics.”
The store manager says they strive to make everything fresh and made from scratch when possible. They pay close attention to the freshness of each display and rotate in fresh products as needed, so that customers are never purchasing any stale products. Every morning there is a checklist of tasks to complete, and the tasks are finished like clockwork, always keeping the customer in mind.
“We strive to maintain freshness in everything we do,” Demeas says.
Examining consumer trends
For bakeries to grow, it is vitally important to keep watch of influential trends in the consumer marketplace. Several trends are emerging that offer growth potential for bakeries, including increased demand for breakfast foods and better-for-you options.
Hispanics are among those Americans most likely to believe that breakfast is the most important meal of the day, market research firm Packaged Facts revealed in its latest report, Breakfast: Retail Product Trends and Opportunities in the U.S., 2nd Edition. These “breakfast believers” are more likely than average to use all types of breakfast foods, and savvy marketers will leverage this positive sentiment to debut new products as well as justify price premiums for some breakfast food products.
“With an increasingly diverse population, it’s prudent for breakfast marketers to understand the importance of targeting households across the cultural spectrum,” Packaged Facts reports. “The multicultural consumer requires marketers to leverage strategies in order to appeal to respective traditional and cultural values, such as advertising in Spanish to better communicate with Hispanics.”
In addition, demand for better-for-you breakfast offerings shows no signs of abating, and healthy breakfast innovations such as overnight oats, nutrition bars with simple ingredients, functional yogurts and heat-and-eat breakfast sandwiches remain prevalent at retail. However, marketers may need to work harder to unearth consumers’ attitudes toward healthy breakfast when dining out.
“While health trends are evident in food service too, it can be difficult to discern the importance of health to consumers when they dine out — necessitating breakfast menus feature items that play to indulgence and health independently,” Packaged Facts reports. “Industry players are doing their part in addressing health trends through new product development of better-for-you breakfast, but there’s clearly room for more players to find a seat at this table.”
In other key trends, research from the International Dairy-Deli-Bakery Association reveals that today’s consumers increasingly seek personal, self-betterment. They want both self-satisfaction and selflessness. These interests are carried through all aspects of life, including grocery shopping.
“While clean labels, sustainability efforts and environmentally conscious practices remain very important, there’s growing interest by consumers in upcycled products and self-care through companies touting positive messages and practices,” says Jeremy Johnson, vice president of education at IDDBA and managing editor of the IDDBA’s What’s In Store 2019 report. “Dairy, deli and bakery manufacturers — namely fresh players in the store perimeter — have the opportunity to expand integrity, credibility and accountability by leading in being good, by doing good.”
In the organic sector, it is notable to report that US organic sales surpassed $21 billion in sales in the 52-week period ended Nov. 24, 2018, which was up nearly 9% from the previous 52-week period, according to Nielsen Homescan household projected data.
Millennials, who spent 14% more on organic products compared to the previous 52-week period, and Hispanic consumers, who spent over 13% more, were top buyers.
“Gone are the days when organic products catered to a singular or specific audience,” New York-based Nielsen reports. “Today, organics have hit the mainstream. Not only are organic products boosting our industry’s top line, they are being purchased more by all generational and age cohorts. That said, some segments of our population are leaning into organic more than others.”
These trends speak to the changing ideas that bakery shoppers have about value.
According to IDDBA, there continues to be an increase in shoppers across generations that are interested in “alternate value propositions.” Sometimes called the “conscious consumer,” these shoppers value food origin, sourcing, company missions and clean labeling over price. Retailers and manufacturers should continue to refine their messaging to appeal to this growing consumer segment.
At the same time, private label products continue to be a source of interest for consumers. Often times that’s because many store brands are taking the extra step to tell their story to the conscious consumer.
“Brand experiences are built on relationships with customers who feel connected to each other while expressing who they are as individuals. They want to be part of the conversation. Conversation is collaborative: engaging, connecting, interactive and integrative force. Conversation is also about listening; listening builds trust,” Johnson says.