CHICAGO — Many foodservice bakers struggled in the wake of the COVID-19 pandemic as consumers stopped eating out and businesses closed their doors. And while the industry rebounded in 2021 and 2022, some pandemic effects remained while new challenges have emerged. 

According to market research firm Datassential, the number of restaurants in the United States has shrunk 3.9% since the start of the pandemic. The average menu size has also fallen, dropping 8.4% in 2021 and remaining at this level since. The rate of introduction and uniqueness of limited time offers has fallen as well, Datassential found. 

Shrinking menu sizes mean it’s more important than ever that the products bakers present to foodservice businesses can ‘work harder,’ said Andrea Brule, executive vice president, sales and marketing for Sugar Foods Corp., New York.

“In years past you might get away with presenting a very unique item that can drive interest,” she said during a March 2 session at BakingTech 2023 in Chicago. “But today what we’re finding is we’re more successful showing items that can be used across multiple times or work harder as a SKU in the backroom.”

Inflation is a concern for 87% of foodservice operators in 2023, while labor and ingredient shortages remain challenges as well. Inflation has led to a decrease in consumer spending on fine dining, while quick-service restaurants (QSR) have been hit hardest by labor shortages. Meanwhile, ingredient and product shortages have harmed places like K-12 cafeterias that are often reliant on single suppliers.

Inflation requires foodservice bakers to boost the perceived value of their product and warrant a higher price point, Ms. Brule said.

“Baked goods can really work harder than a lot of other items because they aren’t typically the most expensive cost driver in a meal,” she said. “So the more we can boost that value perception either through key words or how to market that baked good, that can be a benefit to the operator.”

The projected growth of QSR, fast casual and casual dining is expected to fall in 2023, but other areas are expected to expand, providing opportunity for foodservice bakers.

“We see that QSR has a slight decline, but we see places like ghost kitchens and lodging grow tremendously,” said Mollie Walter, associate director at Datassential. “So depending on who you’re selling to, you want to know where they’re at in projected growth. Ghost kitchens may have more opportunities than QSR, although QSR may have more volume opportunity.” 

Datassential examined the popularity of a variety of breads, classifying them as either being in their inception, adoption, proliferation or ubiquity among consumers. Examples of proliferating breads include gluten-free, brioche, focaccia and marble rye options, while ancient grain, keto, naan and semolina options are in the consumer adoption stage.

Datassential also examined the growth of A.M. and P.M. sandwich carriers. Its report found buttermilk biscuits, asiago bagels, croissant and waffle buns to be trending with consumers. For restaurant P.M. bread carriers, the greatest growth over the last four years came from brioche (101%), herb tortilla (81%), hard roll (76%) and Cuban bread (61%).