Less bakery being consumed or more?

Dan Dilauro

Everyday you can be sure to see a news article, Instagram post, blog, Substack (you get the point) regarding health trends and specifically healthy eating trends. That might lead you to think that consumers are buying less baked goods. Are they consuming less bakery goods or more? In a not so distant past retail bakery sales, and particularly AM sales were a distinct category all to themselves and to those who worked and grew up in that environment you might wish for the good old days again. Truth is those days for many are gone and not coming back. Workers commuting to to their office or shop would stop at the bakery for coffee and a bun or roll. Many bakeries nowadays tell me it’s not worth opening early in the day, weekday sales of donuts and buns are way off compared to what they remember, or more importantly what they need for it to be worthwhile. All that being said are people now eating so much better or different than previous generations? I would say no, they are just getting their AM sweet offerings from different sources. The proliferation of club stores, in store bakeries, Amazon, and the incredible marketing jobs Starbucks, & Dunkin have done the last twenty years has forever changed the habits of generations of consumers. In the past the quality of “Supermarket” bakery was of inferior to the retail baker, but the hook was it was cheaper and it was convenient. The big players have slowly but surely brought their prices in line with the retail baker, if not exceeded it. At the same time their quality and offerings has improved and expanded. Conversely retailers pressured on the labor front have moved to thaw and serve, and pack out items to keep their stores full. The negative consequence of this can be there is no longer a discernible difference between the In Store and the retailer, giving the customer one more reason not to make another trip during a busy week.

So how to react to Not Less Bakery but More? Rents and over head are so expensive and every square foot needs to be earning. I had one successful baker tell me a few weeks ago, right before Easter, he would change hours after the holiday and no longer open for a morning trade that isn’t there anymore. His overall sales are strong and late day sales and custom orders are driving the business. These are also some of the highest tickets sales of the week so using the resources he has to cater to these customers seems to make sense. This change is a fundamental change to a baker who has grown up in the trade since he was tall enough to stand at the bench. To change so completely something you have great pride in will not be easy but could be necessary.

More bakery or less bakery and how to react and reinvent yourself will look different to each location. I saw a customer who dedicated a whole wall of the shop to character and theme disposable plates, cups, candles, piñatas etc. If his customer orders a cartoon or theme cake now hopefully he buys the matching themed party ware from you also. These bundle sales could generate the needed extra margin necessary.

Online ordering services are changing the habits of customers dramatically as well. How do you sell more often or deeper to customers who aren’t inclined to come into the store? A comprehensive media approach combining a web presence and free social media platforms can let you on a daily basis promote your brand as your customer scrolls. Beverages are a whole category, lifestyle, and language to itself but they are profitable can you add a coffee bar, barista, angle to your shop?

This is a lot to think about and requires further investment of capital, of labor, and time. An important takeaway is do not try and compete item for item and worry about matching the price of the In store or club store. They usually will have a budget for marketing that you won’t enjoy. Sell your self, sell quality, sell tradition and sell it for the right price, and importantly sell when the customers are there to buy, because there isn’t less bakery being consumed but more.

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