In-store Bakeries - US
Report description
The smaller-format trend has arisen in response to two overall demographic trends—smaller household sizes as well as return to urban and closer exurban areas after years of extended development sprawl. To respond to these new needs, ISBs must offer smaller footprints in stores that are located where their customers now are. Since these smaller stores can be located in denser urban areas, they are easier for consumers to access as well as easier to navigate, encouraging quick trips at the beginning or end of a workday rather than “stock up” excursions during weekends.
Table of contents
What you need to know
Definition
Data sources
Sales data
Consumer data
Abbreviations and terms
Abbreviations
Terms
Executive Summary
Robust growth since 2006 continues through economic downturn
ISB segment performance led by desserts
Many opportunities for ISBs to attract new customers
Higher commodity prices likely to hurt ISBs
ISB competition comes from a variety of sources
Some retailers setting themselves apart
Nearly three fourths of shoppers have purchased at ISBs in last month
Insights and Opportunities
Get consumers in the door first, by whatever means possible
ISBs can capitalize by emphasizing the fun factor
Openly courting Hispanic consumers
Figure 1: Amount spent on groceries in average week by race/Hispanic origin, February 2009-March 2010
Baking with the “enemy”
Branching out into new segments
Kosher
Gluten-free and sugar-free products
Pie is the new cupcake
Tiny treats
Inspire Insights
Trend: Premiumization and Indulgence
Trend: Carnivore, Herbivore...Locavore
Market Size and Forecast
Key points
Healthy sales growth for ISBs
Sales and forecast of ISBs
Figure 2: U.S. retail* sales and forecast of in-store bakery products, at current prices, 2006-16
Figure 3: U.S. retail* sales and forecast of in-store bakery products, at inflation-adjusted prices, 2006-16
Number of ISBs and average weekly sales
Figure 4: Number of ISBs and average weekly sales per store*, 2006-11
Fan chart forecast
Figure 5: U.S. retail* sales and fan chart forecast of in-store bakery products, 2006-16
Market Drivers
Higher commodity prices impacting costs
Increasing Hispanic population will have positive impact on ISBs
Figure 6: Population by race and Hispanic origin, 2006-16
Competitive Context
Key points
“Grocery aisle” manufacturers becoming more nimble
QSRs stepping up their offerings
Homebaked goods and stand-alone bakeries still play a large role
Young adults and large households eat a variety of baked goods
Figure 7: Bread and baked good household usage, by age, February 2010-March 2011
Figure 8: Bread and baked good household usage, by household size, February 2010-March 2011
Segment Performance
Key points
ISB desserts account for roughly half the market
Figure 9: U.S. retail* ISB sales, by segment, 2009-11
Segment Performance—Desserts
Key points
Dessert sales growth continues, albeit at a slower pace
Figure 10: U.S. retail* ISB sales of desserts, 2006-16
Segment Performance—Bread and Rolls
Key points
Breads and rolls benefit from being viewed as a staple
Figure 11: U.S. retail* ISB sales of bread and rolls, 2006-16
Segment Performance—Breakfast Bakery
Key points
Breakfast bakery items, especially doughnuts, hold their own
Figure 12: U.S. retail* ISB sales of breakfast bakery products, 2006-16
Marketing Strategies
Key points
Some stores taking it up a notch
Regional differences lead to different marketing approaches
Stores tailoring their assortment to reflect demographics
Other ways that supermarkets can drive sales to ISBs
Bakery and ISB Usage
Key points
Figure 13: Shopping role in household, by gender, June 2011
Relatively high incidence of bakery and ISB usage
Figure 14: Bakery and ISB usage and purchase frequency, June 2011
Figure 15: Bakery and ISB usage and purchase frequency, by age, June 2011
Figure 16: Bakery and ISB usage and purchase frequency, by household income, June 2011
Italian or French bread the most frequent purchases at ISBs
Figure 17: ISB purchases, by bakery item type, by age, June 2011
Figure 18: ISB purchases, by bakery item type, by household income, June 2011
Figure 19: ISB purchases, by bakery item type, by household size, June 2011
ISB Shopping and Purchase Occasions
Key points
Supermarkets lead the pack by a substantial margin
Figure 20: Types of stores where consumers buy ISB items, by age, June 2011
Figure 21: Types of stores where consumers buy ISB items, by household income, June 2011
Purchasing behavior varies greatly depending on ISB item
Figure 22: Where consumers buy ISB items for home consumption, by bakery item type, by age, June 2011
The impetus for buying ISB baked goods varies dependent on age
Figure 23: Bakery item purchase occasions, by age, June 2011
Figure 24: Bakery item purchase occasions, by household income, June 2011
Figure 25: Bakery item purchase occasions, by household size, June 2011
Reasons for Shopping at ISBs
Key points
Fresher products draw ISB users
Figure 26: Reasons for shopping at ISBs, by age, June 2011
Figure 27: Reasons for shopping at ISBs, by household income, June 2011
ISB Products/Services of Importance
Key points
ISBs should hone in on one freshness factor—“made on-site from scratch”
Figure 28: Products and services that consumers use, like, or would like from local ISB, June 2011
Certain amenities more important to younger ISB users
Figure 29: Products and services that are important to get from local ISB, by age, June 2011
Figure 30: Products and services that are important from local ISB, by household size, June 2011
The ISB “wish list”
ISB users looking for special deals for frequent customers
Figure 31: ISB products and services that consumers desire, by age, June 2011
Figure 32: ISB products and services that consumers desire, by household income, June 2011
Impact of Race and Hispanic Origin
Key points
Blacks and Hispanics over index on recent ISB usage
Figure 33: Bakery and ISB usage and purchase frequency, by race/Hispanic origin, June 2011
Figure 34: Types of stores where consumers buy ISB items, by race/Hispanic origin, June 2011
Figure 35: Reasons for shopping at ISBs, by race/Hispanic origin, June 2011
Figure 36: Products and services that are important from local ISB, by race/Hispanic origin, June 2011
Cluster Analysis
Bakery Lovers
Demographics
Characteristics
Opportunity
Fresh Treaters
Demographics
Characteristics
Opportunity
Tasteless Values
Demographics
Characteristics
Opportunity
Cluster characteristic tables
Figure 37: In-store bakery clusters, June 2011
Figure 38: Bakery purchases by in-store bakery clusters, June 2011
Figure 39: Bakery item purchase occasions by in-store bakery clusters, June 2011
Figure 40: Reasons for shopping at ISBs by in-store bakery clusters, June 2011
Cluster demographic tables
Figure 41: In-store bakery clusters by gender, June 2011
Figure 42: In-store bakery clusters by age, June 2011
Figure 43: In-store bakery clusters by household income, June 2011
Figure 44: In-store bakery clusters by race, June 2011
Figure 45: In-store bakery clusters by Hispanic origin, June 2011
Figure 46: In-store bakery clusters by presence of children in household, June 2011
Cluster methodology
Custom Consumer Groups
Key points
Usage and attitudes among recent, occasional, and infrequent/nonusers
ISB purchases, by bakery item type
Figure 47: ISB purchases, by bakery item type, by custom consumer groups, June 2011
Types of stores where consumers buy ISB items
Figure 48: Types of stores where consumers buy ISB items, by custom consumer groups, June 2011
Reasons for shopping at ISBs
Figure 49: Reasons for shopping at ISBs, by custom consumer groups, June 2011
Products and services that are important to consumers
Figure 50: Products and services that are important, by custom consumer groups, June 2011
Figure 51: ISB products and services that consumers desire, by custom consumer groups, June 2011
Appendix—Trade Associations
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