Supermarkets see a mix of baby boomers, Generation X and millennials in the store every day. Knowing what each generation’s purchasing tendencies and priorities are as a whole gives retailers an advantage when it comes to marketing and merchandising. Many of preferences overlap, and this is the best place for bakeries, delis and foodservice departments to start.

Changing flavor preferences in cheese

According to IDDBA’s What’s in Store 2014, cheese makers continue to add flavors to keep pace with ever-changing demand. Some are new takes on traditional varieties; others are original varieties. According to Allen Hendricks, vice president of foodservice and education for the Wisconsin Milk Marketing Board, “We are seeing many robust flavors in cheese, such as specialty peppers, aging, spices like cumin, and smoked varieties.” Jim Dimataris, director of processor relations for the California Milk Advisory Board, agrees. “The spicy and smoky flavors like chipotle, jalapeño, habanero, etc., continue to be popular. There is a continued appetite for smoked cheeses and the bold flavors of super-aged cheeses, too,” he says.

Restaurants continue to be the training ground for many culinary adventures — and that includes cheese, notes Dimataris. “We continue to see the trend of cheese plates as dessert (vs. appetizer). This trend generates additional wine and/or port sales to top off the dinner.” One format that has been at the forefront is burger chains. Robust flavors have proliferated, as more burger menus include sharp cheddar, pepper jack, and smoked gouda. New varieties like chèvre and brie are showing up on burgers, too.

“Increased emphasis on artisan and specialty cheeses is generating a lot of buzz, giving retailers the opportunity to put on a show in their store where the specialized staff and displays live,” Dimataris says. “They can sample more exotic cheeses and can show consumers pairing ideas for wines, beers, and other beverages right in the store. This always translates into higher sales and is part of the reason specialty cheeses are so popular now. It’s also a way that retailers can tap into the expertise of commodity organizations. . . that offer pairing apps, brochures, and tips sheets with ideas of how to maximize merchandising for cheese and other dairy items.”

Mediterranean cheeses are also a popular trend. Feta is very popular in restaurants, as it is found on 31% of menus. In addition, CMAB’s Dimataris says, “Interest is increasing in Mediterranean cheeses and dairy items like Haloumi, a grilling cheese also known as Yanni, and Labne, a yogurt cheese.” Latin American cuisine continues to drive sales of Hispanic cheese.

Jennifer Giambroni, director of communications for the California Milk Advisory Board, points out that Millennials “really could be considered the cheese generation — they grew up eating it, they have been exposed to many new varieties of cheese beyond commodity cheeses and they have an adventurous spirit. The artisan and specialty cheese category is made for this buyer — as long as they can access it easily and in a convenient format.”

Premium bakery in demand

Convenience-focused couples and families are a strong demographic driving ISB sales, but the group that skews strongest towards ISB are shoppers who tend to buy more premium products in the store, according to IDDBA’s What’s in Store 2014. Jonna Parker, director of consumer insights for Nielsen Perishables Group, points out this shopper group spends the most in the department and visits the most frequently. Many retailers are targeting this demographic. A surprise in ISB demographics, and a group that’s often not thought of, is the healthy living lifestyle group, who don’t make a huge impact on sales, but do still buy from the department, Parker says. “Healthy living shoppers are a force in the country and a big part of the consumer demographic today. They can’t be left by the wayside. The ISB might be where they indulge,” she says. They may buy enhanced products or shop in the ISB because of product quality, particularly breads.

Healthful bakery product sales are very small, though products with attributes like whole grains and superfruits are showing sales gains. Sales of organic ISB items are relatively small at just $45 million in national sales, though they’re showing growth, Parker says. Consumers are more enthused about foods with added benefits, such as omega-3 fatty acids, than those with attributes taken out, such as low fat or reduced sugar.

“When customers want to splurge, they want the best quality these days, and they are looking at labels to see if there are hydrogenated oils, preservatives, etc.,” says Jennifer Dahm, bakery merchandiser for Dorothy Lane Market.

“The ability to have fresh baked bread within five minutes combines the convenience aspect that shoppers are seeking, as well as the quality and freshness that they’re expecting from the instore bakery,” says Matt Lally, bakery specialist for Nielsen Perishables Group. “Products that appeal to the convenience-minded shopper are playing a role in terms of snacking.”

John Cheesman, vice president of sales/corporate accounts for Maplehurst Bakeries, says that guava and pineapple flavors and fillings are popular ethnic flavors found in many products today. Additionally, cake designs and color schemes are shifting as Asian and Hispanic consumer demographics grow, he says. Tropical colors and the “tropical Christmas” theme — or lighter greens, pinks, and golds, instead of typical red and green — are also popular, according to Cindi Walters, senior technical advisor for Dawn Foods. At the most recent IDDBA Dairy-Deli-Bake Show & Sell Center cakes with brightly colored checkerboards and striped crumb centers were featured as attention-getting designs.

Deli shoppers seek involvement

While there appears to be a resurging interest in cooking at home, the very definition of cooking is beginning to change, opening an opportunity for delis to appeal to the new way consumers are preparing meals at home. With shopper desire to become more involved in food preparation, retailers can offer cooking and product demos to enhance interactions with their customers.

IDDBA’s Filling the Gap Deli and Bakery: White Space Opportunities to Yield Growth and Impact found that value can be exclusive from price. “Many consumers seem to be indicating that they would potentially pay the overall asking price if only they could see the value in doing so. If there is a premium attached to the price tag at the deli, then it must be made clear to shoppers what they’re getting for that incremental cost, whether it comes from a higher convenience factor, extra time savings, or better quality or flavor.”

As consumers explore higher quality forms of deli meat, such as charcuterie they might see in restaurants, they do so within their budgets often leading them to peg rack specialty meats merchandised near specialty cheeses. Of note, specialty deli meat experienced the largest increase in dollars and volume, helped by increased sales in the salami category, according to Nielsen Perishables Group.

“As pricing slightly declined and promotions were more effective, deli specialty meat impressions per store per week rose 10.9%,” says Chris Zagorski, analyst forNielsen Perishables Group, leading to a 10.5% and 10.9% increase in dollars and volume, respectively.