A few of the top current trends in instore bakeries and delis are global influences, nostalgia based in cultural roots and bright colors.
Many consumers are looking to branch out and try new flavors from countries around the world, and they are also cherishing their family traditions and the flavors that bring them comfort.
While every consumer comes to the supermarket with their own unique family backgrounds and varied stages of life, it is important for them to receive a personalized experience. Gone are the days of generalization.
Focus on the five
Whitney Atkins, global marketing vice president for the Madison, Wis.-based International Dairy Deli Bakery Association (IDDBA), identified the significance of the number five for the deli and bakery industry in 2023.
She explained that engaging consumers with all five senses is the key for retailers wanting to stand out.
Atkins also pointed out that there are currently five generations in the workforce. While Millennials and Gen Z consumers are getting the most marketing attention right now, she said it is important to ask, “How do you reach all of the generations we still have?”
Another five that IDDBA is focusing on in 2023 is the five steps in the supply chain and improving communication between suppliers and retailers.
One thing that retailers are expecting from suppliers, Atkins said, is for the brands to travel to them and make it easier for them to experience what they are offering.
“The key is getting it out there and showing it to them,” she said. “It is important that they are able to distinctly talk about innovations and get in front of retailers. Everyone is wearing more hats than ever, and finding a way to get through that communication chain is key.”
Care for the whole consumer
An important message that IDDBA wants to share with the bakery and deli industry this year is to focus on the consumer’s whole health, whole self and whole heart, Atkins said.
“Out of the last couple of years, consumers are more in tune with their health than ever before,” she said.
However, health does not look the same for every consumer, Atkins pointed out. For some it may be wanting healthier ingredients, and for others it may be wanting smaller package sizes of indulgent products so they can eat however much they want of it in the moment without having a lot leftover and worrying about food waste.
This consumer individuality also influences the convenience trend.
“The consumer in today’s world defines their own convenience,” Atkins said. “We can all feel what we want, but what matters to consumers?”
Assuming that every shopper looking for convenience wants to purchase a full meal kit can alienate other groups who view convenience differently.
“Maybe they just want to come into the bakery and get some fresh bread to go with the meal they are cooking that night,” Atkins said. “Defining on a broad base is the wrong way to go about it. Consumers are more involved in the product cycle than ever before. Understanding what it means to the consumer is key.”
Continuing down that path, Atkins said that consumers are also defining their own value.
“Do you have a mix of product that is going to answer the consumer on a budget?”
Some consumers see value purchasing in bulk, while others opt for smaller sizes to get only as much as they need. These things depend on the size of their families, the ages of their kids and their own places in life.
“Make sure we aren’t defining value for the consumer; let the consumer define that,” Atkins advised.
For many consumers, private label brands have grown in value in the last year. Atkins said that as consumers have been purchasing more private label products, they have become accustomed to them and consider private labels as their own brands within a store.
This is particularly true for Gen Z.
“Younger generations say they like private labels” Atkins said. “They want quality for their money. Focusing on the quality of private label products within your bakery is going to be key. Growing those type of brands is going to be huge.”
Acknowledging the current challenges retailers are facing, Atkins said that one of IDDBA’s main goals this year is to support stores in offering this personalized experience to customers.
“What we’re focusing on is to cut through the noise,” Atkins said. “How can we help carry the message and help retailers do that? How can we help them have labor efficiency to focus on the customer? It’s going to continue to be a struggle.”
Another challenge for retailers with providing value to consumers is pricing.
“How we look at food is a little bit different now,” Atkins said. “We can’t have this discussion without talking about inflation. It went down a percent in March, so that’s good. But the consumer’s overall budget and overall spend still plays a part. What challenges we are seeing is the increasing cost of ingredients.”
One area where the industry is seeing a little bit of relief is in dealing with supply shortages. Atkins said that while the supply chain is still facing these problems, they have had some experience dealing with them over the last few years and are better at problem solving and moving forward.
“What manufacturers and retailers are saying is they can react a little easier,” Atkins said. “One month, one ingredient is in full supply, and another month it’s not, or the cost goes up. There is still unpredictability, but they are more equipped to react to it.”
Reviewing holiday history
While the last few years have been unpredictable and ever-changing, Atkins said that 2023 is the first year the food industry is able to start seeing patterns in consumer behavior again. This is useful as the industry prepares for the holiday season.
“What’s going to be easier is being able to use some data from 2022 as far as what consumers were buying for the holidays,” Atkins said. “What we’re seeing is the trends in how they are shopping. Retailers will be able to use data from Easter and how that compared to what they saw in 2022 and how that’s changed. It’s kind of a clean slate going forward after all that has changed in the world.”
An important thing for retailers to offer holiday shoppers is individual items that they can contribute to a holiday meal.
“Family occasions are coming back, but everyone is bringing their own twist and tradition,” Atkins said. No one wants to be responsible for the entire meal. Everyone is bringing different things.”
There is big interest in nostalgia among consumers right now, and many family traditions are regional.
“Be sure that you are ready for those holidays in your area of the country,” Atkins said. “For Easter, maybe you had hot cross buns in one area, cinnamon rolls in another. Know your area and what those local traditions are and be ready for them. Now we have the data to know what customers are looking for.”
Consumers have also recently discovered that every day can be a party if they really want it to be.
“Bakery has historically been about special occasion shopping,” Atkins said. “What we are seeing is price promotions are not making a difference on cakes. Consumers are looking for how to make each day a special occasion. The question was always, ‘How do we get people in when it’s not just a birthday?’ We can get on that and make every day a special education.”
Breakfast business is booming
As many consumers are continuing to work from home, the way they are shopping for breakfast is different.
If consumers no longer have a commute to work, they are not stopping for coffee and breakfast at a restaurant or coffee shop in the morning, Atkins pointed out. The trend she is seeing more is consumers buying breakfast items from instore bakeries that will stay fresh in their homes for a few days so they have breakfast ready to go when they wake up and start working.
“A positive sales trend that we are seeing post-pandemic is that breakfast continues to grow in sales,” Atkins said. “As we look at how the consumer’s day has changed, breakfast foods will continue to be a sales in-unit driver in retail.”
Going global, creating with color
Flavors from all around the world have been making their way to American grocery stores. Some of this has to do with nostalgia and consumers connecting with their cultural roots, and some of it is people wanting to branch out and try foods from other cultures.
According to the Washington, D.C.-based National Restaurant Association’s What’s Hot 2023 Culinary Forecast, globally inspired salads, flavors from Southeast Asian countries — such as Vietnam, Singapore and the Philippines — and Caribbean cuisines are among the top 10 hot trends this year.
“Consumers are obsessed with Asian cuisine,” said Shannon Cushen, director of marketing for Hampstead Md.-based Fuchs North America. “They are craving spicy, pickled, fermented and sweet-heat flavors. Korean, Indian, Vietnamese and Thai food are seeing quite a bit of demand from consumers.”
Claire Conaghan, associate director of content at Chicago-based market research firm Datassential, said that Middle Eastern and Japanese ingredients are among the trendiest right now, including matcha, rose and tahini. She also sees Latin American and Chinese items growing in popularity in the bakery.
“Mexican bakery continues to grow after years of Mexican cuisine outside of the bakery being a source of inspiration,” Conaghan said. “We now see things like churros — even used as a flavor — mangonada, again as a flavor, and item types like concha growing. Also growing in bakery are Chinese items with many food-forward consumers learning of such flavors from new cookbooks or learning of new holidays such as increased awareness of things like moon cakes.”
In its annual FoodBytes report, Datassential shared its list of top 10 2023 flavor trends for individual ingredients.
One of trending ingredients is mushrooms, bringing a nostalgic earthy flavor to foods. Regarding the whole health concept that IDDBA is focused on, Atkins also pointed out that mushrooms are making a comeback.
“Mushrooms have a lot of health benefits to people,” she said. “It’s coming back in bakery as well as deli and foodservice.”
Atkins also mentioned that chestnut flour from Mediterranean cuisine is becoming popular as a gluten-free option, and using insects milled down into flour for protein is gaining traction. She said that for many people in other countries, insect protein has been a great way to combat food insecurity.
Another ingredient Datassential ranked in the top 10 is yuzu, an aromatic East Asian citrus fruit that traditionally is used in ponzu sauce. It has a bright yellow color like a lemon.
Ube, a semisweet purple yam found in a variety of Filipino cuisines, also made the list. It is especially popular due to its natural lavender color, making instore bakery items stand out. For Millennials and Gen Z, it gives them a lot of opportunities to create interesting food-related content on TikTok and Instagram.
“Colors are making a big impact in the way people are eating,” said John Stephanian, vice president of global culinary and innovation at Chicago-based ADM. “That could be influenced by social media, just having some things that are very vibrant. There’s kind of a health and wellness connection to that, too. For a while, people said eat the rainbow and try to add all of these colors to your diet, and I’m definitely seeing a resurgence when it comes to colors specifically.”
Atkins agreed that yuzu and ube are creating a lot of buzz for instore bakeries.
“As the bakery industry continues to be innovative, flavors like ube and yuzu as ingredients will continue to set them apart in the consumer’s mind and reach the Millennial and Gen Z consumer that’s looking for that new twist and that foodie that wants to stay on top of the latest trends.”
“Consumers are definitely more engaged with some of the ingredients that are more progressive and willing to try new things,” Stephanian said.
One way that instore delis are helping consumers “eat the rainbow” is with poke bowls, a Hawaiian cuisine with Japanese influence. Poke is a convenient and healthy grab-and-go option that has a balance of protein, fat and carbohydrates along with a lot of vitamins from the different vegetables.
Geneva-based Firmenich Inc. placed dragon fruit as a top trending ingredient. Similarly to yuzu and ube, it was for both the fruit’s color and flavor.
“It’s brave and fearless, a pulsating color whose exuberance promotes optimism and joy,” said Mikel Cirkus, global creative director for taste and beyond at Firmenich. “Our 2023 choice of dragon fruit reflects the global consumer’s increasingly adventurous palate and desire for the new or exotic when it comes to ingredients and taste.”
“Dragon fruit may be still a ‘rare’ fruit flavor for food and beverage brands, but it is no longer rare to consumers,” said Jeff Schmoyer, global head of human insights at Firmenich. “It’s possible that the initial lag in new product innovation is in part related to the challenge of realizing the flavor of dragon fruit. Our consumer research shows that the fruit can sometimes surprise people by not having the strong flavor to match its visual appearance. Instead, the taste is light, refreshing, sweet and delicious.”
While research and data have identified all of these popular flavors from so many different countries, the common denominator is that consumers want the world.
Does your strategic plan match today's shoppers?
A Feb. 28 webinar hosted by Arlington, Va.-based FMI – The Food Industry Association and Chicago-based Circana Inc. raised this important question for retailers and shared the following statistics:
- The average United States household is 2.5 people, the lowest it has ever been.
- 70% of households do not have children.
- 17 states lost population in the last year, shifting west and south.
- Households led by adults under the age of 40 will soon outnumber those led by adults over 40.