WASHINGTON — Food is still “stupid expensive.” That was the consumer sentiment echoed in Anne-Marie Roerink’s latest research, Bakery Playbook: A Deep Dive Into Consumer Trends, presented at NextGen Baker Leadership Forum, held Sept. 30-Oct. 1 in Washington, DC.

Roerink, principal 210 Analytics, outlined how bakery is performing in both foodservice and retail channels and against food at large, according to the latest Bakery Playbooks: tortillas, pastries, and buns and rolls, sponsored by Puratos. These studies and previous Bakery Playbook studies on bread and cookies are available to members on ABA’s website.

While inflation may have slowed, food prices have outpaced wages considerably, leaving consumers to feel the squeeze both at restaurants and the grocery store. Seventy-six percent of consumers believe restaurant prices are higher than last year and 80% of them believe grocery prices are higher. Compare that to 210 Analytics’ findings in 2023: 64% believed restaurant prices were higher and 74% believed grocery prices were higher. 

“When you look at the actual numbers, it’s absolutely true,” Roerink said. “Today, we are paying 35% more for food and beverages than we did in 2019. Very few of us are making 35% more, so a lot of us are constantly balancing.” 

Those actual numbers from Circana show that bakery aisle prices only came down 0.4% and while  perimeter bakery slipped 0.3%. 

The impact then has prompted consumers to eat out less and eat at home more. In August 2024, 210 Analytics’ report showed 52% of consumers say they buy from restaurants less, up from 48% last year. This results in more volume at retail, which had 71.9% share of the total volume of baked goods. 

Despite this gain, consumers are still impacted by pricing at the retail level, and they are adapting with fewer bakery items in their carts while trips to retail are flat. Much of the growth for bakery has been fueled by inflation. 

“You can always grow sales in three ways: more people buy, they buy more often or they spend a little bit more,” Roerink explained. 

Household penetration for bakery remains strong with the vast majority of households buying baked goods at least once a week. However, Circana data for the 52 weeks ending July 14 showed that consumers made about 65 trips annually to  the bakery aisle and perimeter compared to 217 trips for total food and beverage.  

“People buy baked goods more than once a week, which sounds really good until you look at total food and beverage, and that’s 217 trips per year,” Roerink said. 

Roerink outlined four trends baking companies can pursue to grow the category: dollars and sense; health, animal, people and prosperity; improving upon perfection; and healthy habits, healthy hearts. 

When it comes to dollars and sense, affordability is top of mind for consumers. Fifty-nine percent are focusing frequently on what and how much they need when grocery shopping, and 45% are purchasing store brand more often. Eighty percent of consumers are applying one or more money-saving measures when buying baked items. 

“We see that consumers are looking to buy store brands more often, checking promotions more often, and when you look at the actual sales numbers, that is absolutely happening,” Roerink explained. 

Both foodservice and retail channels are finding success by focusing on value and promotions. Roerink pointed out that while promotions are returning, they have yet to return to the frequency and depth seen in 2019 before the pandemic. While center-store bakery saw a 7.1% increase in dollars sold on merchandising since last year, according to Circana, that was still down 11.1% compared to 2019.

Roerink recommended retailers and baking companies get creative with promotions through category adjacencies, mix-and-match discounts, and meal bundles and happy hours. 

“We don’t have to wait for the economy to improve, though, because we found that 94% of consumers are willing to spend more when the time is right: holidays, entertaining, celebrating, if I’m just trying to do something nice for me,” she said. “So the time is right could mean a lot of different things, and one of them is if it replaces a restaurant meal.” 

When it comes to improving on perfection, consumers want freshness. It’s the No. 1 must-win for bakery product across categories.

Younger consumers, particularly Generation Z, are more likely to explore than older generations. Roerink pointed out that 44% of Gen Z consumers are willing to try something crazy and unique compared to 17% of boomers. 

The definition of health and well-being continues to evolve, with consumers seeing mental health as important as physical health. Roerink reported that 55% of consumers focus on eating a balanced diet.

Restrictive diets are out, she said, with 92% of consumers saying they agree that it is perfectly fine to occasionally enjoy a baked treat or dessert. That majority held out across generations: 87% of Gen Z and 95% of boomers agreed.  

Sustainability remains a driving trend and opportunity for growth, though Roerink pointed out that data suggests this is less of a purchasing priority and more of a tie-breaker when consumers compare products. 

“Sustainability started off with the bottom-line savings, but it’s very much developed into the right thing to do and my shopper is asking for it,” she said. 

This is another area with an evolving definition from going beyond simply bottom-line energy savings to now including social initiatives such as minimizing food waste and humane treatment of workers, farmers and animals. 

However, there is still an education gap that needs to be filled for consumers, who aren’t sure about the definitions of common sustainability terms like regenerative agriculture or carbon footprint.