At El Rey Markets in Milwaukee, Wisconsin, customer service has gained even more importance in the post-Covid era.
As you walk into the bakery department in any of El Rey’s four stores, customers encounter a highly friendly staff that is committed to serve your needs for freshly baked breads, sweet bakery items, and custom decorated cakes.
There is an experienced cake decorator working on the newest cake designs at one corner of the front of the department. This presence showcases the creative designs available at El Rey Markets, as well as emphasizing the freshness factor.
Shoppers love it.
“Our customers are very happy with the cakes we offer,” says Karla Bonilla, cake decorator at El Rey Markets.
At La Luz Bakery on Chicago’s northside in Round Lake, Illinois, owner Esteban Montes points out that customers respond to a beautiful and clean environment where they can shop for many choices of fresh bakery items.
“We always like to try to improvise and try new things,” Montes emphasizes. “We have been very successful in cakes. Right now, if you don’t have a good cake business, it is going to be a little hard to be successful.”
At Tony’s Bakery in Waukegan, Illinois, customers love the hand-held sweets and treats, such as the individual tarts. There are a variety of options available of the tarts, including strawberries and whipped cream or blueberries, kiwifruit and sliced apples.
Nationally, consumers shopping at food stores are craving more bakery items and fresh foods that can be enjoyed at home and packaged in convenient portion sizes.
It is important to understand the latest consumer trends in order to respond appropriately to shifts in customer demand.
While inflation is more moderate for food away-from-home (7.6% versus a year ago*) compared to food-at-home (13.1% versus a year ago*), the typical away-from-home eating occasion still costs 3.4 times more than in-home food sourced from retail. To offset rising food costs, consumers are bargain hunting when grocery shopping, eating more meals at home and cutting back on restaurant visits, reports Information Resources, Inc. (IRI®) and The NPD Group (NPD), which recently merged to create a leading global technology, analytics and data provider.
The nearly $1.5 trillion at- and away-from-home food market is forecast to grow around 8% in 2022, with at-home food (8.7% sales growth versus a year ago) outpacing away-from-home (6% versus a year ago), according to IRI’s and NPD’s inaugural joint research. The research offers the first-ever comprehensive view of the Complete Food™ market, examining how consumers buy and consume food at home, use restaurants and foodservice outlets and uncovers new insights about consumers’ trade-offs to save money and splurge in the current inflationary environment. The research forecasts the Complete Food market to grow by 3-5% in 2023.
Other key findings from the IRI-NPD research identify what is driving shifts, how occasions at home are evolving, and the impact of rising inflation, including:
Hybrid and flexible work schedules enable up to 20 million U.S. workers to work from home, which keeps the substantial majority – 62.5% – of the food dollar based on retail at-home sales, while 37.5% represents foodservice spending.
Consumers are bargain hunting, preferring more mainstream and value brands over premium brands, choosing private label foods in select categories and occasionally buying premium products as affordable luxuries.
Consumers are migrating to more at-home food to offset rising costs, as noted by the deceleration in foodservice traffic, down 3% in July. Even when dining out, consumers trade down to more value foodservice outlets, like quick service restaurants, as evidenced by the growth in average customer check versus menu prices.
Market bifurcation intensifies as higher-income households prefer premium products and lower-income shoppers prefer mainstream and value products. More growth is driven by higher-income households, as lower-income households are more economically challenged.
“With inflation hitting 8.5% in July, it’s no surprise that consumers are trading down to lower-priced options and opting for more value, especially when dining out,” said Dr. Krishnakumar (KK) Davey, president of CPG and Retail Thought Leadership for IRI and NPD. “While the pandemic and recent inflationary pressures shifted demand, restaurants and foodservice outlets offering value, convenience and at-home indulgence are top of mind for consumers and will continue to grow.”
The sustainability factor
Another important variable to consider is that bakery shoppers are increasingly factoring in environment issues in their daily purchases.
According to new research from the 2022 Mintel Consulting Sustainability Barometer, the number of global consumers citing climate change as a top three environmental concern has risen from an average of 39% to 46% between 2021-22*.
In addition to climate change, concern over water shortages (up from 27% in 2021 to 31% in 2022) and food shortages (up from 17% to 23%) have made the most significant gains in terms of environmental priorities in the past 12 months.
And it seems helping the planet brings with it a feel-good factor as an overwhelming 68% of consumers globally say doing things that benefit the environment makes them feel happy. While 38% say they want to show other people how they are doing good for the environment (by sharing on social media). A further 24% say they have researched their annual carbon footprint (eg with an online calculator or app).
While environmental priorities have shifted in the last year, consumers’ sustainable behaviors remain focused on simplicity and frugality, including recycling packaging and meal planning to avoid food waste.