What’s next for bakeries? Insights from ABA’s 2024 Playbooks

In an industry where bakery serves as both a staple and a canvas for creativity, the American Bakers Association (ABA) continues to equip its members with resources to better understand consumer behaviours.

The inaugural series – sponsored by Puratos – delves deep into consumer shopping habits across categories like pastries; buns and rolls; cookies; and tortillas. From shifting purchasing habits to the rise of seasonal flavours, 210 Analytic’s Anne-Marie Roerink and ABA’s Christina Donnelly share valuable insights for bakeries looking to thrive in a rapidly evolving market.

The secret ingredient to driving frequent purchases

According to Anne-Marie Roerink, president of Texas-based market researcher 210 Analytics, a standout finding from the research is that variety drives higher consumption.

“Since this is the first year of the ABA’s Bakery Playbooks series, we don’t yet have significant data for historical comparison, but some strong conclusions have still risen from the first year of research,” Roerink tells Bakery&Snacks.

“One that immediately comes to mind is the blueprint for growth that is derived from comparing the behaviour of consumers who frequently engage with the category to those who do so only every few weeks or months. We found the same formula, whether we’re looking at pastries, buns and rolls or tortillas. That is, frequent consumption relates to: 1) the variety of items purchased within the category; 2) the number of meal occasions during which the items are consumed; and 3) the variety and number of meal applications. In other words, variety in all its forms drives additional purchases.”

She illustrates this with tortillas, where frequent consumers diversify their purchases across all sizes – street tacos, taco-size and burrito-size – compared with light consumers who typically stick to taco-size. The same pattern emerges in pastries and buns/rolls. Offering variety, therefore, isn’t just about product innovation but about driving frequent purchases.

The balancing act of premium features

As consumers continue to navigate economic uncertainty, Roerink highlights how budget considerations influence their buying decisions.

“The consumer sentiment rollercoaster ride continues,” she tells us.

At the same time, the ABA Bakery Playbook series found that 80% of consumers believe that grocery prices are higher than they were last year and that has resulted in a host of money-saving measures when shopping for groceries too. Consumers are far more likely to buy items that are on promotion, for instance. This has resulted in consumers shopping more often while buying a little less each trip.

“The consumer sentiment rollercoaster ride continues,” she says, pointing to a shift back to home-centric meal occasions.

“More meal occasions moved back to the home or are now hybrid occasions in which consumers source some items from restaurants but complement them with foods or beverages they prepared at home.”

This has “led to strength in retail bakery sales, with dollar sales for instore bakery increasing by 1.1% over the past year, according to Circana’s MULO+ universe, while sales in the bakery aisle grew by 0.7%.”

However, inflation remains a concern, with 80% of consumers believing grocery prices are higher than last year. This is driving behaviours like buying smaller quantities more frequently and focusing on promotional items.

“In short, today’s food landscape is a nonstop balancing act in which consumers weigh price and promotion against time, convenience, nutrition, mood, sustainability and more.”

This is particularly prevalent when it comes to premium attributes like all-natural, high-fibre and artisan.

“Consumers who buy premium attributes tend to skew higher-income and have been less likely to change their behaviour. Meanwhile, lower and middle-income consumers are making more adjustments to their shopping and foodservice habits. This includes far fewer changes to their restaurant foodservice habits as well as far fewer changes as it relates to their grocery shopping.”

Tortilla trends: Millennials lead the charge

Millennials are leading the way in tortilla consumption, according to ABA’s senior director of Strategic Communication and Initiatives Christina Donnelly.

“They’re more likely to purchase all three sizes compared to older consumers,” she tells Bakery&Snacks.

For example, 49% of Millennials purchase street taco-sized tortillas versus just 31% of Boomers. This demographic is also more particular about whether their tortillas are freshly made or pre-packaged, a factor that bakeries can leverage in product marketing.

Expanding pastry occasions with seasonal flavours

Pastries have long been associated with breakfast and dessert, but opportunities for growth lie in their versatility, suggests Donnelly.

“The ever-growing selection of savoury pastries allows bakeries to expand into lunch, snacking and dinner occasions,” she says.

“According to ABA’s Bakery Playbook on pastries, Millennials currently have the highest engagement with savoury pastries, but this is also a growth opportunity with older consumers.”

Seasonal and limited time offerings (LTOs) also offer a compelling growth strategy.

“Our Pastries Playbook found that 71% of consumers want to see seasonal flavours, such as pumpkin for Fall or cinnamon during the winter months.”

Moreover, while many consumers stick to their favourites, 46% actively seek out new pastries. This dual demand for familiarity and novelty gives bakeries a chance to innovate while still catering to core preferences.

Engaging younger audiences with buns and rolls

The versatility of buns and rolls is particularly appealing to younger consumers, says Roerink.

“Younger audiences love variety and are more adventurous with flavours and cuisines. They use buns and rolls in casseroles, bread puddings and stratas – or even as a snack by itself.”

This contrasts with Boomers, who primarily use buns for burgers, hot dogs and deli sandwiches.

“Much like tortillas, these diverse applications encourage consumers to purchase larger pack sizes or buy more frequently. Both are big wins for sales growth,” explains Roerink.

Social media’s pivotal role

Roerink underscores the enormous influence of social media in shaping consumer choices.

“One of the best examples right now comes from the produce department, where an influencer known as the ‘cucumber guy’ has billions of views on his hashtag #cucumbersalad. Stores across the world are running out of cucumbers, with sales up 12% year-on-year in August and 18% in September, according to the Circana MULO+ sales numbers.”

This trend extends to baked goods.

“Fifteen percent of bun and roll consumers say social media prompts them to try a new brand or type they haven’t had before,” she adds.

Additionally, over half of Americans use platforms like TikTok, Instagram and YouTube for recipe inspiration involving buns and rolls.

To capitalize on these trends, Roerink says its critical for bakeries to have a plan in place to quickly scale production if a product goes viral.

However, “that’s the tricky part. Viral sensations are often unplanned, making it hard to react quickly. But the potential is enormous.”

Bridging generations and cultures

The insights from ABA’s Bakery Playbooks highlight a unifying theme: the power of diversity and adaptability. From appealing to Millennials’ adventurous palettes to offering premium options for higher-income consumers, bakeries that embrace variety in product offerings and meal applications are positioned for success.

“Consumers are balancing price, convenience and quality every day,” says Roerink.

“Understanding these dynamics and tailoring strategies accordingly will be key to growth in 2024 and beyond.”