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In-store Bakeries - US - June 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
In-store bakery sales growth expected to continue
Figure 1: Total US sales and fan chart forecast of in-store bakery products, in millions, at current prices, 2012-22
Stand-alone bakeries offer distinct competition
Figure 2: Opinions of in-store bakeries, April 2017
Need to evolve appeal beyond larger households
The opportunities
In-store bakeries as an economical indulgence
Figure 3: Opinions of in-store bakeries, by household income, April 2017
Flavor affording opportunity
Figure 4: Increasing purchase through flavors, April 2017
Leveraging freshness and variety
Figure 5: Purchase frequency, by purchase factors, April 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Continuing sales increases expected for the category
Strong growth in dessert sales for in-store bakeries
Stand-alone bakeries offer distinct competition
Declining number of households with children
MARKET SIZE AND FORECAST
In-store bakeries projected to see continued sales increases
Figure 6: Total US sales and fan chart forecast of in-store bakery products, in millions, at current prices, 2012-22
Figure 7: Total US sales and forecast of in-store bakery products, at current prices, 2012-22
MARKET BREAKDOWN
Breakfast emerging as in-store bakery occasion
Figure 8: Total US retail sales and forecast of in-store bakery products, by segment, at current prices, 2012-22
Desserts register strong sales growth over last two years
Figure 9: Total US retail sales of in-store bakery products, by segment, at current prices in thousands, 2015 and 2017, % change from 2015 in parentheses
MARKET PERSPECTIVE
Prepared cakes/pies see rising sales but fall short in terms of fresh
Figure 10: Sales of prepared cakes and pies, by segment, 2013 and 2015
Competition from stand-alone bakeries
Figure 11: Opinions of in-store bakeries, April 2017
MARKET FACTORS 
Consumer spending on food trending higher
Figure 12: Food sales at home and away from home, January 2003-January 2017
Households with children more likely to turn to ISB offerings
Figure 13: Households, by presence of own children, 2006-16
Hispanic consumers over index in the use of in-store bakeries
Figure 14: Population, by race and Hispanic origin, 2011-21
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Price matters but not as strongly as some other attributes
Health attributes may deter consumers from more-indulgent options
Free-from could communicate natural
WHAT’S WORKING?
Price matters
Figure 15: Notable in-store bakery dessert launches, 2017
WHAT’S STRUGGLING?
Health, a possible deterrent in certain segments
Figure 16: True Goodness by Meijer Organic Whole Grain Hot Dog Buns, 2017
WHAT’S NEXT?
Free-from claims could resonate
Flavor affording opportunity
Figure 17: Increasing purchase through flavors, April 2017
Figure 18: Walmart Marketside Pepperoni Cheese Bread, 2017
THE CONSUMER – WHAT YOU NEED TO KNOW 
Younger generations turning to in-store bakeries
Strong interest in freshness
Naturally good
Variety resonating with younger consumers
Occasional opportunities
Consumers seeking organic options
Diverse options for an increasingly diverse population
In-store bakery usage chiefly in supermarkets
ISB-loyal consumers and price
Consumers say they value freshness even over price
PURCHASE FREQUENCY 
Consumption of baked goods
Figure 19: Purchase frequency, April 2017
Opportunities in increasing frequency
Figure 20: Purchase frequency, by age, April 2017
Evolving beyond larger households
Figure 21: Purchase frequency, any purchase, by number of children under 18 in household, April 2017
Figure 22: Purchase frequency, by number of children under 18 in household, April 2017
Distinct opportunities among younger Hispanic consumers
Figure 23: Purchase frequency, any purchase, by Hispanic origin, April 2017
PURCHASE FACTORS
Fresh factors most strongly
Figure 24: Purchase factors, April 2017
Freshness and variety appeal to frequent shoppers
Figure 25: Purchase frequency, by purchase factors, April 2017
Factors to increase purchase
Figure 26: TURF Analysis – Purchase factors, April 2017
NATURAL FACTORS
Nutrients resonate with younger consumers
Figure 27: Purchase factors, by age, April 2017
Younger, higher-income consumers factoring nutrients and lack of allergens
Figure 28: Purchase factors, by age and household income, April 2017
Figure 29: Purchase factors, by number of children under 18 in household, April 2017
Older Hispanic consumers strongly likely to consider health
Figure 30: Purchase factors, by Hispanic origin, April 2017
FLAVOR FACTORS
Fresh resonates most strongly with youngest consumers
Figure 31: Purchase factors, by age, April 2017
Variety appeals to younger households with higher income levels
Figure 32: Purchase factors, by age and household income, April 2017
Flavor’s strong appeal to Hispanic Millennials
Figure 33: Purchase factors, by Hispanic origin, April 2017
USAGE
Potential in special occasions
Figure 34: Usage of in-store bakeries, April 2017
Hispanics more likely to use for special occasions
Figure 35: Usage of in-store bakeries, by Hispanic origin, April 2017
INCREASING PURCHASE
Health concerns offset by portioning
Figure 36: Increasing purchase, April 2017
Organic claims resonate strongly with younger generations
Figure 37: Increasing purchase, by age, April 2017
Organic options may resonate with consumers seeking healthy treats
Figure 38: Increasing purchase, by number of children under 18 in household, April 2017
Hispanic Millennial attitudes reflect Millennials’ overall
Figure 39: Increasing purchase, by Hispanic origin, April 2017
FLAVOR IMPROVEMENTS
In-store bakeries can assist during time-stressed holiday seasons
Figure 40: Increasing purchase, April 2017
Time savings from in-store bakeries
Figure 41: Increasing purchase, by age, April 2017
Diverse options could reach a diverse audience
Figure 42: Increasing purchase, by Hispanic origin, April 2017
Maximizing in-store bakery potential
Figure 43: TURF Analysis – Purchase increase, March 2017
PURCHASE LOCATION
Supermarket ISBs resonating more so than other retailers’
Figure 44: Purchase location, April 2017
Unexplored potential for mass merchandisers’ and natural stores’ in-store bakeries
Figure 45: Purchase location, April 2017
In-store bakery may create a sense of consumer loyalty
Figure 46: Purchase location, by repertoire of usage of in-store bakeries, April 2017
BRANDS AND BAKED
Quality factors strongly among bakery items
Figure 47: Opinions of in-store bakeries, April 2017
Baked goods as reassurance
Figure 48: Opinions of in-store bakeries, by household income, April 2017
Hispanic Millennial moms appear to be gatekeepers
Figure 49: Opinions of in-store bakeries, by Hispanic origin, April 2017
Frequent ISB consumers appear less impacted by price
Figure 50: Purchase frequency, by opinions of in-store bakeries, April 2017
QUALITY OF BAKED GOODS
Fresh appears more impactful even than price
Figure 51: Opinions of in-store bakeries, by gender and age, April 2017
Fresh appreciation among Hispanic non-Millennials, in particular
Figure 52: Opinions of in-store bakeries, by Hispanic origin, April 2017
IMPACT OF IN-STORE COMPETITION
Bakery expertise could be a draw
Figure 53: Opinions of in-store bakeries, by age, April 2017
Leveraging expertise via social media and apps
Figure 54: Opinions of in-store bakeries, by Hispanic origin, April 2017
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Abbreviations
APPENDIX – THE MARKET 
Figure 55: Total US retail sales and forecast of in-store bakery products, at inflation-adjusted prices, 2012-22
Figure 56: Total US retail sales and forecast of in-store bakery products, by segment, at current prices, 2012-22
Figure 57: Total US retail sales of in-store bakery products, by segment, at current prices, 2015 and 2017
Figure 58: Total US retail sales and forecast of desserts, at current prices, 2012-22
Figure 59: Total US retail sales and forecast of desserts, at inflation-adjusted prices, 2012-22
Figure 60: Total US retail sales and forecast of breads and rolls, at current prices, 2012-22
Figure 61: Total US retail sales and forecast of breads and rolls, at inflation-adjusted prices, 2012-22
Figure 62: Total US retail sales and forecast of breakfast bakery, at current prices, 2012-22
Figure 63: Total US retail sales and forecast of breakfast bakery, at inflation-adjusted prices, 2012-22
Figure 64: Total US retail sales and forecast of other in-store bakery products, at current prices, 2012-22
Figure 65: Total US retail sales and forecast of other in-store bakery products, at inflation-adjusted prices, 2012-22
APPENDIX – THE CONSUMER 
Figure 66: Bread types eaten, by gender, 2016
Figure 67: Bread types eaten, by age, 2016
Figure 68: Bread types eaten, by race, 2016
Figure 69: Bread types eaten, by Hispanic origin, 2016
Figure 70: Bread types eaten, by household income, 2016
Figure 71: Bread types eaten, by education level, 2016
Figure 72: Bread types eaten, by presence of children in the household, 2016
Figure 73: Bread types eaten, by region, 2016
TURF ANALYSIS METHODOLOGY
Methodology
Figure 74: Table – TURF Analysis – Purchase factors, March 2017
Figure 75: Table – TURF Analysis – Purchase increase, March 2017

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