KANSAS CITY - The instore bakery department has “yet to return to normal,” said Todd Hale, principal at Cincinnati-based Todd Hale LLC, noting this part of the business has underperformed during the crisis. This department can make progress through new spins on popular pre-COVID-19 trends, he added.
“There had been a lot of demand for single-serve items like bagels or cookies. So how about more packaged single-serve?”
Consumers are unlikely to completely abandon their new home-based behaviors when the COVID-19 crisis is over, Hale predicted, referring to at-home baking and cooking.
“I don’t think people will become weary of cooking and entertaining at home,” he said. “It will continue to be a growth engine. I would suggest more advertising that helps continue to fill demand around the enjoyment of eating at home and family togetherness.”
Digital marketing has the potential to fuel momentum for bread and baked goods, said Hale. He pointed to an 8% average weekly growth rate for these categories in the latest eight weeks, not including impacts from the Labor Day period.
“How do you keep this going?” he asked. “Can you be creative with digital engagement? What’s in your innovation basket to fuel growth?”
Hale urged bakers to make investments that position their businesses for the future, despite near-term challenges.
“Don’t sit on the sidelines and think you can win,” he said. “Companies that invest during a recession come out ahead.”
Jim Hertel, senior vice president, analytics, at Winston-Salem, N.C.-based Inmar Intelligence, shares thoughts on what the COVID-19 crisis has taught us about the future of variety for bakery and perishable foods sold in the supermarket.
“Fresh variety will always be in high demand,” Hertel said. “More people today are looking to improve their personal and at-home health and wellness and fresh is a big part of that. What will likely evolve is safety around fresh. Shoppers are looking for more pre-packaged fresh product because they are concerned about open-air and the number of human touches in the store. So, fresh variety will be in demand but packaging and possibly merchandising (how product is displayed) will play an increasingly important role.”
Hertel continues by stressing the importance of fresh variety.
“There is less browsing and shopping online today than in a store and therefore we do see less variety purchased online. This shift could impact variety which largely will depend on where ecommerce orders are fulfilled, e.g., micro-fulfillment center vs. directly from the store,” he said. “While ecommerce in theory allows for the endless aisle and ability to expand assortment, this hasn’t played out yet for today’s online fresh shoppers. This could change as more households shop online.”
Other factors to consider, he said, include the number of trips a household makes to their stores and the number of outlets shopped, which are down, while basket sizes are up. Purchases are more planned and impulse sales are down significantly.
“Consumers have more defined shopping missions today and that will have an impact on variety,” he said. “As far as a longer-term outlook goes, online shopping will continue to grow, and more routine purchase will shift online and more inventory will be centralized. Fresh, to a lesser extent. This ultimately will require grocers to rethink center store space and the overall shopping experience. This could lead to expanded fresh space and ultimately more fresh variety as fresh plays an even greater role. It will all depend on foot traffic and a retailer’s ability to re-invent the in-store shopping experience.”
State of the bakery
Hale sizes up the state of the baking industry by leveraging Nielsen data and providing his perspectives, with points including the following:
Food Retail: Supermarkets and value-focused retailers have been driving the most growth over the past 52 weeks, up 11.9% and 7.8%, respectively.
Economy: The economy remains challenging, and there is greater inflationary pressure from food at home. If the economy worsens, many shoppers will likely cook more at home and seek more savings strategies.
Grocery: The grocery department has dominated year-to-date bread and baked good sales, accounting for $40.8 billion of the total $55.8 billion in this segment across the store —as the fresh bakery department continues to suffer.
Categories: The pandemic has reminded consumers of the benefits of the commercial bread aisle, but refrigerated and frozen bread and baked goods are growing faster.
Restaurants: The restaurant business is likely to encounter challenges for at least another six months, with mixed impacts on the quick-serve sector and severe implications for upscale segments.
Demand: Food retailers and manufacturers are already preparing for the possibility of another COVID surge, including stockpiling groceries to be ready for rising demand.
Nielsen research found 29% of consumers are worse off financially compared to last year, and only 37% are secure in their jobs.
“This explains why so many observers are now talking about a K-shaped economic recovery,” Hale said, which suggests different impacts by consumer groups — in particular, a haves and have-nots scenario.
“The haves will be okay, so premium products will probably be good,” Hale said. “For those struggling to spend, the value retail players have a chance to fill demand.”
Adding to the concern is the potential for COVID-19 spikes as the year progresses.
“You need a plan that addresses the continued fallout from COVID-19 and the likely K-shaped recession recovery,” he said.
Austin, Texas-based Whole Foods Market just opened a new 57,000-square-foot store located in Westbury, NY, that features a wide range of merchandising and product placement strategies designed to help customers learn and know more about the products they purchase.
In-house bakery offering pies, cookies, cakes and items for special diets, as well as sliced breads from local bakery Bread Alone, pastries from Pain D’Avignon and gluten-free, dairy-free red velvet cake from By The Way Bakery.
To help spur innovation and creating merchandising, Dawn Food Products features the Dawn Innovation Studio at its headquarters office in Jackson, Mich. Melissa Trimmer, senior applications chef at Dawn, shares that Dawn has used the Innovation Studio as a vehicle to work with many bakers and customers in ways that inspire creativity, encourage innovation and strengthen collaboration.
One example of this is Dawn’s program “Inspired By You,” which Dawn created with the mission of pushing the boundaries of texture and flavors and giving customers the ability to create desserts reflective of their style. Pushing said boundaries has proven to be a fruitful one as bringing different stakeholders to the Innovation Studio has led to the development of new products including the first-ever sourdough donut mix and three new cake flavors – coconut, honey and coffee.
A big challenge facing customers in the retail space, she said, is having to adjust to shifting consumer habits, especially as bakeries work to remain open during COVID-19. To help customers better navigate the new retail terrain, Dawn provides timely insights into what consumers are looking for, from investing in bake-at-home kits to ways bakers can capitalize on holiday trends.
“One of the biggest changes we have seen is a shift to individually portioned or smaller treats as consumers continue to stay home with their families and prefer smaller portion sizes,” she said. “The Dawn Foods website offers great recipes, many of which can be scaled up or down to achieve this balance from larger portions to individualized treats. Another trend we are seeing is that customers are making their menus smaller and easier to execute. In response, Dawn’s versatility guides help showcase how bakeries can use one mix in many different ways, while also saving on labor and menu space.”
Antimicrobial Door Handle
Door handles are high-contact surfaces, especially in supermarket, grocery, and convenience stores. Shoppers worry whether others have touched door handles before them, leaving disease-causing pathogens behind. Even though retailers have valiantly increased their cleaning protocols, they cannot disinfect every surface after each use.
Zero Zone, a leading manufacturer of refrigerated display cases and refrigeration systems, announces the introduction of the Zero Zone Copper Ally Antimicrobial Door Handle, a solid copper handle that literally cleans itself due to its permanent bactericidal properties.
The Copper Ally door handle does more than open doors. Copper itself is antimicrobial in nature, with tests proving that antimicrobial copper kills 99% of bacteria within 2 hours of exposure. The Copper Ally door handle is manufactured out of EPA-registered antimicrobial copper alloys in FIFRA-listed facilities, uses 94% recycled materials, and is proudly made in the USA.
Since the launch of contactless ordering in 2018, GoTab has set a new standard in contactless menu management for operators, allowing them to actively edit menus in real-time, 86ing food via the Kitchen Display Systems, and easily control digital menu displays.
GoTab's technology allows operators to create a master menu, control how the digital menu is displayed, use GoTags to facilitate food filtering options, and gives them the ability to seamlessly create sub-menus for delivery/takeout, in-room ordering, etc. A new feature launching just in time for the holiday season is fixed duration menus, which operators can leverage to promote and offer special food offerings for a set window of time (i.e. Thanksgiving, Christmas, Hanukkah, etc.).
With GoTab, scheduled orders are organized on operators' KDS and displayed with timers. GoTab's KDS will display scheduled orders and indicate their lead time so staff knows when to start preparing an order. They can easily handle 86 ingredients or menu items, which will automatically (and in real-time) update all of the published menus. It will also notify guests and allow them to communicate with the kitchen via two-way SMS text communications. GoTab's KDS keeps guests informed and allows the kitchen to communicate with customers. It also means operators can respond to guest feedback in real time, helping them clarify orders or update customers on their order status quickly and efficiently.
With GoTab's virtual deployment, operators are able to quickly set up takeout and delivery. Native GoTab features provide an efficient new model for operators to effectively serve their customers. They include: geofencing of delivery areas through Google Maps API, support for unlimited delivery addresses on customer profiles, delivery address verification through Google Maps API, route optimization for drivers by time or distance, and printed packing slip generator.