When you think about it, the words bread and dough have always been synonymous with money. Earn more bread. Make more dough. Call it the universal currency. Baking is where it’s at. But as you look outside your own physical bakery or retail store and into the ever-changing consumer universe, you may start to wonder — even worry — that you may not be able to keep pace with what many are calling the new retail reality. You may ask, How am I going to sustain and grow my business in a digitally disruptive environment?
The International Baking Industry Exposition (IBIE) has the answers. The IBIE 2019 is catering to the needs of baking industry professionals in a variety of ways at its upcoming event in Las Vegas on Sept. 7-11. One way is through two new state-of-the-art Artisan Marketplaces, Crafted by Puratos and Crafted by the Bread Bakers Guild of America (BBGA). These interactive marketplaces will help artisan bakers to hone their skills, make connections, and grow their businesses, as well as help wholesale bakers to capitalize on this growing trend.
Additionally, IBIE will hold a newly implemented day of learning on Saturday, Sept. 7. Tailored sessions will provide attendees curated, business focused tools they need to enhance and grow their businesses. Courses will include talent management classes with a concentration on acquiring, developing, and retaining workforce and cultivating great leaders. The day will also offer hands-on workshops and interactive sessions designed for artisan and retail bakers.
15 key trends to watch
To help you navigate the waters, here are 15 trends to consider as you walk the aisles of IBIE 2019:
“Just walk out technology” has arrived at Amazon Go, with four retail stores (the newest in New York City) and counting. Customers walk in, select what they need and exit the store. No lines. No checkout. A virtual cart adds every product you pick up, and the receipt is sent straight to your app.
Autonomous food delivery and production is coming fast, and 5% of grocery shopping is now completed online.
While 74% of shoppers typically purchase functional items at their primary food store, conversion is much lower of indulgent items/desserts (63%) and special occasion items (40%), according to the inaugural Power of Bakery 2019 Report from The American Baker’s Association (ABA) and Food Marketing Institute (FMI).
Portion control is huge. “Particularly with indulgent items, people want a product that knocks their socks off. They just want it a little smaller,” says Robb MacKie, president and CEO of the ABA.
Celebration “themed” pizzas are hot, according to Ardent Mills. Seasonality and food holidays offer more ways to create festive eating occasions like National Bakery Day (Sept. 27, 219) or Fall Harvest Fest. Themed pizzas can capture some of this celebratory spirit and serve well as limited-time offers.
Convenience and entertaining “are growing like gangbusters,” says Jonna Parker, fresh foods market research expert with IRI. “There is a consumer need for convenience, and that’s what we need to be talking about.”
“Fresh” is the universal winner of production-related claims that matter to consumers, mentioned by seven in 10 shoppers overall and nearly eight in 10 Boomers, reports the Power of Bakery. “Fresh” and “baked today” are easily the two most popular production-related claims out of the list of 12 options. When asked to define freshness, particularly as it relates to functional bakery items, shoppers first point to the date and time.
Traditional food categories have dissolved because “our virtual way of listening and watching has changed our way of thinking about categories,” says Kevin Ryan, founder and CEO of Malachite Strategy and Research and former Amazon.com senior brand strategist. To combat the “endless scroll” of web surfers, retailers must “enhance your first moment of truth, require interaction and supply continual awe.”
As witnessed in many of the grocery perimeter departments, significant numbers of shoppers have a dual-store strategy, in which they purchase center-store groceries in one store and bakery items in another, according to Power of Bakery. Channel switching is highest for special occasion items, such as birthday cakes/cupcakes, and lowest for functional items. Stand-alone bakery specialty stores take a majority share of the switchers across all three categories.
The environment and sustainability are topics “that you can’t not talk about,” says Barb Stuckey, president and chief innovation officer at Mattson. “In bakery, we are watching alternative flours. We think we are going to see a lot more of this.”
Sales of plant-based foods have outpaced sales of conventional foods by a factor of 10 in the past few years, says Rick Findlay, IDDBA chairman and vice president of fresh for Fresh Thyme Farmers Market. “This is a trend we cannot ignore.”
The global sourdough bread market is forecast to grow 6.9% annually through 2023, according to Mordor Intelligence. From craft breweries to the proliferation of kombucha products and a focus on digestive health, sourdough has an opportunity to capture those same consumers, but with bread. According to a 2017 survey commissioned by research firm Ingredient Communications, 73% of consumers said they are willing to pay more at retail for products made with ingredients they trust and recognize.
By 2020, roughly half of Gen Z, Y and X will be multicultural, says Terry Soto, noted author and adviser on multicultural markets. “Consumers of other cultures are just consumers. They have the power to grow sales,” she says. “There is a $20 billion Hispanic market, and Asian, African and Middle Eastern are growing in leaps and bounds. There are six steps to success: see the future, keep an open mind, understand core market changes, define consumption and buying behavior, get to know them personally, and organize to take action.”
Toum, a Lebanese condiment featuring garlic, lemon juice, olive oil, and salt, is “coming on strong,” says foodservice analyst Nancy Kruse. Zhoug, a blend of hot pepper, garlic and cilantro, and za’atar, a combination of green herbs, sesame and olive oil, are gaining momentum on mainstream menus as flavorful in sandwiches.
Cannabis and cannabidiol (CBD) as two leading restaurant trends heading into 2019, according to an annual survey of chefs from the American Culinary Federation. “I’ve been doing this for a long time, and I’ve never seen anything like this,” Kruse says. The Agricultural Improvement Act of 2018 removed hemp from the Controlled Substances Act, which cleared the way for the cultivation, production, and commercial activity in the United States. CBD is derived from hemp. “Does that mean we are therefore legally everywhere allowed to ingest CBD?” Kruse says. “No. That’s coming on more slowly, subject to lots of legal variations by state and by city.”
Power of bakery
According to the 2019 Power of Bakery report, total bread and baked goods sales surpassed $59 billion in 2018, split between the fresh bakery department and items located in the grocery, frozen and dairy departments. In-store bakery sales were $13.8 billion and are dominated by desserts, sweet goods and cookies, whereas center-store sales are more evenly balanced between functional and indulgent items. Bakery is one of the biggest drivers for in-store trips, bringing shoppers to the store nearly once a week, yet opportunities exist for retailers to increase consumption frequency and household penetration across individual categories.
The survey also shared that top-of-mind “bakery” word associations are dominated by positive terms that convey emotion, such as “yummy” or even “love.” While it remains important to meet consumers’ desires for functional attributes, the data shows there is power in satisfying a customer’s emotion to drive sales.
Shoppers’ view on the importance of having someone to help with questions or purchases highly depends on the type of item purchased. More than three-quarters of shoppers want the ability to personalize, but this does not necessarily mean items need to be made from scratch to shoppers’ personal preferences. In fact, the greatest share, at 42%, prefer pre-packaged items but with the ability to personalize. While most shoppers believe scratch baking delivers superior quality, 57% are indifferent to their store using partially prepared/baked ingredients.
“Consumers are clearly looking for healthy ingredients to drive their dietary habits and bakers will need to leverage their products’ positive health attributes,” MacKie says. “However, bakers and retailers need to connect with consumers, give them opportunities to smell, touch and taste their products. That is what drives the emotional connection to the category, regardless of product segment.”