KANSAS CITY — Sweet baked goods come in many forms — snack cakes, brownies, cupcakes, donuts and muffins, to name just a handful. Often consumed as an indulgent treat, the bakery snacks category has experienced a dip in demand over the past year. Dollar sales in the bakery snacks category rose 13% to $4.61 billion in the 52 weeks ended June 18, but unit sales fell 7.1% to 1.67 billion units, according to Circana, a Chicago-based market research firm.

Despite the lower unit sales, established and emerging sweet baked goods manufacturers have taken steps to breathe life into the category.

A smaller company actively expanding in the sweet baked foods space is Phoenix-based Café Valley, which over the past six months has acquired a company, formed a partnership, added to its product line and invested in equipment. In January, Café Valley acquired the assets of Freed’s Bakery, a Manchester, NH-based maker of iced mini cupcakes. Freed’s Bakery for many years was part of the Maplehurst Bakeries business that, in turn, was part of Weston Foods, a division of Toronto-based George Weston Ltd.

A few months later, Café Valley partnered with Mott’s and Hawaiian Punch to add new flavors and products to its line of 12-count mini muffins and 16-oz ring cakes. The partnership with Mott’s and Hawaiian Punch was followed by the debut of Café Valley’s 12-count and 24-count mini cupcake assortments in late May. The everyday mini cupcake line features vanilla, chocolate, cookies and crème and red velvet flavors available in 12-count packages. In addition, a 24-count pack of chocolate and vanilla checkerboard cupcakes will be offered.

To prepare for the new mini cupcake launch, Café Valley in June said it invested more than $5 million in its Marion, Ind., baking plant, adding high-speed production equipment to accommodate its new 12-count and 24-count mini cupcake product line. With the investment Café Valley said it will add 83 jobs at the Marion plant. Café Valley currently employs 560 at the facility.

“Mini iced cupcakes are a core offering in many retailers across the country and drive significant excitement to the in-store bakery category,” said Matt Goldthwaite, senior vice president of sales at Café Valley. “We’ve received tremendous feedback on our new mini iced cupcakes and are excited to get them in consumers’ hands.”

Combining categories

Hostess Brands, Inc., Lenexa, Kan., hopes to make the sweet baked goods category more relevant by accessing occasions from the broader snacking universe.

“Our most recent launch, Kazbars, does that beautifully in the sense that it takes a cake that puts it in a bar form in indulgent layers,” Andrew P. Callahan, president and chief executive officer of Hostess, said during a June 8 presentation at the Deutsche Banke dbAccess Global Consumer Conference in Paris. “So it meets with indulgence. It puts it in a form that consumers are used to, but they’re not used to having cakes in a bar form, and it really imagines what the indulgence and the stackability of a cake can be for their consumers in the $65 billion set.”

But it’s not just Kazbars that are bringing an innovative twist to the category, Mr. Callahan said. In fact, he said most of Hostess’ innovations are trending in that direction.

“We’re taking Zero Sugar for Voortman and put it in a more shareable package, in smaller packages,” he said. “Our Baby Bundts took a really popular and on-trend form and put it in a convenient thing, and our R&D team does a great, great job of building these products, not only with the attributes that consumers want, but a quality that usually surprises them. We spend a lot of time investing in quality, and we know that the gap between our actual quality when consumers try and get reintroduced to it and what they perceived it to be before that is high in our favor. In other words, when they try Twinkies again for the first time and reinvest in it, it’s always better than what they expected. And that’s why our advertising, our strategies with our customers are really important because when they try them again, they come back. The first sale is always the most expensive.”

LTOs and new swiss rolls

The summer months also are a prime time for sweet baked goods companies to bring back limited-time offerings. Bimbo Bakeries USA, a subsidiary of Grupo Bimbo SAB de CV, Mexico City, recently brought back its Entenmann’s Little Bites Chocolate Party Cake Muffins. The bite-size snack cakes contain cocoa and rainbow sprinkles.

Little Bites Chocolate Party Cake Muffins have no high-fructose corn syrup and are kosher certified. Each individual pouch of Little Bites Chocolate Party Cake Muffins contains 180 calories, and every box contains five individual pouches with four cake muffins in each pouch.

Little Bites Chocolate Party Cake Muffins (then called Little Bites Chocolate Party Cakes) were first introduced in January 2017.

“At Little Bites, we are committed to bringing families seasonal snacking innovations that will make each little moment, whether it be kids learning to tie their shoes or being tall enough to reach the top shelf, feel really big,” said Moira Flood, marketing director for Little Bites Snacks. “We can’t wait to hear how Little Bites Chocolate Party Cake Muffins help our fans create celebrations any time of day.”

Little Bites Chocolate Party Cake Muffins will be available through July.

Meanwhile, McKee Foods Corp., Collegedale, Tenn., in March expanded its Little Debbie portfolio with the launch of Strawberry Swiss Rolls. The company said it’s the first time it has introduced a year-round flavor extension to the classic Swiss Roll since the product’s launch in 1967.

The snack cakes feature the traditional Swiss Roll chocolate cake rolled around strawberry-
flavored crème and encased with a fudge coating. The Swiss Rolls also feature new packaging, McKee said.

“With such an eye-catching pop of color, paired with the iconic Swiss Rolls font, they’re sure to be instantly recognizable,” said Jill Sito, creative service manager at McKee Foods. “Overall, the new packaging for Strawberry Swiss Rolls not only looks stylish, but also effectively communicates the product’s flavor and quality.”

Erica Cunningham, product manager for Little Debbie, added, “Our consumers expressed that they liked the uniqueness of a Strawberry Swiss Roll, considering it a refreshing change from the majority vanilla and chocolate combos, and we couldn’t agree more.”

Los Angeles-based Aspire Bakeries brand Otis Spunkmeyer also is expanding its portfolio of individually wrapped sweet baked goods with the addition of a fudgy brownie square.

The individually packaged fudgy chocolate brownie comes in 3-oz portions and joins Otis Spunkmeyer’s ¼ sheet double fudge chocolate chip brownies as a foodservice, convenience store and in-store bakery solution.

“This is the sweet treat consumers will reach for time and time again,” said Paul Stippich, director of marketing at Aspire. “Brownies are considered one of the top three desserts in America. The talented research and development team at Otis Spunkmeyer developed this fudgy brownie with the perfect texture, flavor, and just the right amount of chocolate.”