Wholesalers add a touch of elegance to sweet goods

After the coronavirus (COVID-19) hit, it accelerated some trends and derailed others. Take supermarket in-store bakeries, which had been struggling with a skilled labor shortage for years and had been steadily turning to wholesalers instead of baking in-house.

Still, when it came to putting the finishing touches on some products, many were hesitant to relinquish control of the decorating process, which was vital to sustaining the image of the in-store operation as the hometown bakery for many consumers.

“At the wholesale frozen level, full finishing of donuts — especially those produced at high volumes — was not something that was done,” noted David Moline, vice president, sales and marketing, Moline Machinery. “For the most part, donuts were pre-fried, then finished at the store level.”

In March, however, food-safety-conscious grocers emptied their bulk bins and self-serve cases and began packing donuts in boxes and clamshells. For cost-savings, many retailers turned to wholesalers to put the finishing touch on a greater share of the Danish, donuts and other lower-margin, iced and glazed baked goods.

“We did see a trend and it was happening before COVID, but the pandemic injected it with steroids, so to speak,” Mr. Moline observed. “It was the desire for wholesale manufacturers to have full finishing at the manufacturing level and not at the retail level.”

The shift to the center store — and away from the perimeter — was swift and dramatic, and it’s a trend with some staying power even as in-store bakery sales rebound. This transition prompted some supermarket bakeries to evaluate whether to maintain the labor they had in the past or just keep skilled decorators who focused on higher-margin items.

According to recent IRI data supplied by the International Dairy Deli Bakery Association (IDDBA), sales of packaged baked goods rose 8.9% for the four weeks ending July 26 compared with the same four-week period a year ago. Packaged pastries/Danish/coffeecakes increased 7.0% while donut sales jumped 8.2% in July 2019.

On the flipside, total in-store bakery revenue fell 5.3% from its July 2019 levels, while donut sales plummeted 37.8% and breakfast items such as Danish and other breakfast baked goods slid downward 4.3%. The good news? In-store bakery sales have been improving steadily since they hit their nadir in April and May, according to IDDBA.

In the dessert category, cakes inched up 1.6%% in June, a significant improvement over the steep double-digit declines in previous months. The rebound in cake sales could be attributed to the shift away from large sheet cakes to smaller ones as the size of graduations, Father’s Day, birthdays and other special celebrations shrunk due to social distancing and restrictions on group gatherings.

Outside of increasing requests for more packaged products, bakers haven’t reported any new food safety challenges specifically related to the icing and finishing of baked goods.

“Instead, I see customers streamlining their product offerings to focus on more popular or revenue-sustaining product lines, while other customers are pivoting their business models and distribution channels,” said Sonia Bal, director of marketing for Unifiller Systems.

For wholesalers, the key to future penetration in the in-store bakery and foodservice market involves creating indulgent sweet goods that appear handmade and differentiate themselves from their prepackaged counterparts. Donut producers, for instance, are taking a page from the cupcake category and going gourmet.

“In Europe, donuts have been sold individually for a long time, so they use premium ingredients like real chocolate coatings,” Mr. Moline pointed out. “You may buy one donut in Europe with a real cream filling and chocolate enrobing and pay more for that donut than you would for a dozen here.”

He added that it requires less labor for commercial bakers to consistently finish premium donuts that are frozen, then slacked out at the store level.

“It’s very practical to do so now,” Mr. Moline said. “At the wholesale level, fondant-based icings are designed to withstand freezing. To do that, you can’t just melt it and apply it. You need precise temperatures in a very controlled environment. You just can’t run a fondant-based icing through a glazing system and expect it to work.”

Formulations dictate the process and the equipment needed. Moline offers icing systems for fondants, which aren’t as temperature-sensitive during shipping and don’t need to be tempered like real chocolate. Depending on the formula, he noted, fondants are most commonly applied at temperatures ranging from 115˚F to 135˚F.

“Temperature control is perhaps the most critical part of an icing process,” Mr. Moline observed. “When you change temperatures, you vary the amount of icing coverage on the product.”

Belshaw Adamatic Bakery Group offers donut systems for retail bakeries and cafes as well as for commercial operations. Mike Baxter, product information and marketing coordinator, said Belshaw’s industrial icers and glazers can be sized for production lines with rows ranging from six to 10 donuts wide.

“They work with multiple flavor icings or glazes, but keep in mind that quick changeovers, say in 5 to 10 minutes, are going to need separate holding tanks for each flavor,” Mr. Baxter said. “Creative and attractive icings are all the rage, but typically these are still applied at the retail outlet where customers can sometimes choose their donut finish and have it applied on the spot. Even mini donuts are part of the customization trend these days.”

This article is an excerpt from the September 2020 issue of Baking & Snack. To read the entire feature on finishing, click here.