KANSAS CITY - Fresh bakery continues to reinvent itself. During a recent webinar, “Top Trends in Fresh: A Year in Review as We Look to the Future,” IRI and the Food Marketing Institute dove deeper into how fresh food has performed throughout the pandemic, including anticipated trends for the winter and new ideas for 2021 and beyond.

“As the US turned to new normal in August and September, we saw some very interesting things. Bread is doing really well,” said Jonna Parker, IRI fresh center of excellence.

The perimeter bakery is significantly smaller than the bakery aisle and results were mixed. As seen throughout the pandemic, the more functional items of breads and rolls are mostly trending above year-ago levels.

But desserts, sweet snacks and breakfast items continued to be below 2019 sales trends. These results are affected by the closing down of bulk, self-serve sections as well as the very different nature of celebrations and gatherings amid the pandemic.

“Shortened time in store and shoppers’ desire to focus on their essential, list items are also hampering the browsability that anchors especially the sweeter, impulse elements of the fresh perimeter bakery,” Parker said.

For starters, Parker pointed out a need to further define “what is fresh,” because the industry employs a variety of definitions. She advocates a “fact-based view of perishables definitions.” This would include the following steps:

  • Use retailers’ and suppliers’ own systems to analyze which items they consider bakery and other fresh departments.
  • Let numbers guide the definition.
  • Where the data is not definitive, leverage a governance board of unbiased suppliers, retailers and industry leaders.
  • Build this industry standard in an easily accessible, ongoing data set for sales and shoppers.

Unlike the center store bakery, the perimeter bakery performance by area is much more mixed. Only two areas reported increases, including croissants and tortillas/wraps and flatbreads.

October was the first month that fresh perimeter bread fell below last year’s levels. What’s next? Everyday demand continues to slowly erode back to 2019 levels. However, with renewed shelter-in-place restrictions and rising COVID-19 cases, retail sales may swing up again in the next few months.

Holiday lessons

The end-of-year holiday demand is likely going to be very different, much like Thanksgiving. According to the latest weekly shopper survey by IRI, conducted mid-November, the holidays will involve much less travel and smaller gatherings.

  • Only one in four shoppers plan to celebrate with others outside their household, about half the rate of 2019.
  • One in three expect to spend less on groceries for the December holidays this year, primarily due to hosting fewer/no guests this year or cutting back to save money

Some key points from the IRI session:     

  • Most states saw an increase of COVID cases, but only 24% of consumers were planning to “pantry-stock” as they had in anticipation of a rise in cases.
  • E-commerce opens massive opportunities for fresh foods, with sales reaching $4 billion in the last 26 weeks.
  • The definition of “fresh foods” differed across five major US grocers. IRI’s Integrated Fresh solution offers a fact-based definition of food and beverage across the store.

“This has been quite a year,” said Sally Lyons Wyatt, executive vice president, IRI center-of-store and produce vertical. “It has been a roller coaster year. It is still going on.”

Of note, holistic health and other trends have evolved dramatically. Two of the top dynamics are more people are at home and more meals are prepared at home. According to IRI, 55% of school children are still online only, and 53% of working adults are working from home or an alternate location.

“We are anticipating more people at home until next summer,” Wyatt said.

In other notable trends, 81% of meals are now prepared at home. Trips are down, but baskets are high. When restrictions lessen again, Wyatt said consumers will spend more time in the store.

As for ecommerce, “we’ve blown all those records away, especially for perishables,” she said.

  • 17% of households use online as primary way to buy groceries.
  • $4 billion in latest fresh food ecommerce sales over 26 weeks, up 99% vs year ago.
  • 58% fresh ecommerce sales in brick-and-mortar retailer sites – 15 points higher than center store/frozen.

Retailers certainly have taken note.

“The most popular foods and beverages of 2020 underscore how our customers not only adapted to the challenges of this unique year but embraced cooking and eating at home as part of their new routine,” said Stuart Aitken, chief merchant at Kroger. “As many of our customers transitioned to working from home and virtual schoolrooms this year, coffee, fresh deli meat and artisan bread emerged as go-to staples for elevated breakfast and lunch routines, while zero-calorie soft drinks, unique potato chip flavors, wine and chocolate stood out as comfort-food favorites.”

Other factors at work

Sustainability is influencing purchase decisions, too. Products that reduce carbon footprint, reduce food waste or feature plastic packaging will gain greater traction in the new year, according to Kroger. 

At Wegmans Food Markets, one consequence of consumers spending more time at home is them baking and cooking more. As a result, the chain has seen increased demand in categories such as bakery and cuisine-focused categories (Asian, Latin, Italian, etc.). Unlike the sudden panic buying in March, this shift has been more gradual, which has lowered the impact on supply, but not completely avoided it.

Going into the holidays, some national brand suppliers continue to face supply challenges on key items. To help ensure the available product is spread evenly across retailers, suppliers have placed these limited-supply items on allocation, controlling how much product each retailer receives. To ensure Wegmans has options available for customers in every category, the company has spent the past several months sourcing additional suppliers, bringing in new brands, and working with its Wegmans Brand suppliers to build up its holiday and winter reserves, in its own warehouses, as well as at its suppliers’.

“Looking back to where we were in March at the start of the panic, and where we are today, eight months later, it’s incredible to think about how much we’ve learned, and how much more we all know about living through a pandemic,” said Sarah DePeters, vice president of grocery, dairy, frozen merchandising. “Our merchandising and store teams have done an incredible job ensuring our customers have options available in every category. If everyone focuses on buying what they need, when they need it, there will be plenty to go around.”

All Wegmans stores now offer online ordering with the option of picking up groceries curbside or having them delivered to customers’ doors. As more customers turned to online grocery shopping during the pandemic, the supermarket company rolled out a new program with Instacart that has Wegmans employees shopping customers’ curbside orders using Instacart’s technology. Instacart shoppers continue to shop delivery orders.

With Wegmans Meals 2Go, customers can order meals like fresh subs, pizza, and more for carryout, curbside pickup, or contactless delivery.

On Nov. 11, the newest United Supermarkets opened its doors in Pecos, Texas. The 44,000-square-foot store includes a full-service bakery, along with a sushi bar, a full-service deli and a meat market with an in-house butcher.

Sergio Aguillon, store director for the Pecos store, said it has been amazing to see it all come together. He said he is excited to have his team together and start serving the Pecos community. 

“We have all watched as this store went from being a concept to becoming reality,” Aguillon said. “It has been really fantastic to welcome everyone in to see this store. We are really proud of it and think the community of Pecos will be served well by it.”