Snacking Opportunities Boost Bakery

Packaged bakery sales jumped nearly 6% in 2012, according to SymphonyIRI, as time-pressed customers gravitated toward lower-cost indulgences for breakfast and throughout the day. For the 52 weeks ended Dec. 31, 2012, packaged bakery sales in U.S. convenience stores reached $705 million. Overall unit sales increased 1.98% to 539.54 million.

“People still talk skinny, but don’t eat that way, although I think that pendulum is moving,” said Jerry Weiner, vice president of foodservice for 57-store Rutter’s Farm Stores in York, Pa. “I think customers have approached the point of feeling better about making some healthier choices, but are not actually eating healthy.”
Rutter’s is heavily invested in all facets of the bakery business. The chain bakes six varieties of bread with a seventh on the way in the next several months. Also baked fresh daily in 43 stores are cookies, muffins and biscuits. Much of the growth in baked is coming through the muffins, Weiner pointed out. “Sales have just jumped on muffins and the biscuits are also doing extremely well. Cookies have always been strong.”

Consumers’ choices provide insights into what they value which, of course, is a cue to convenience store operators. “The biscuits, I believe, are just a function of a fresh-baked bread item for breakfast being a big deal,” said Weiner. “I think the muffins are about quality and freshness. You can never have a bakery item that is too fresh.”

All-Day Dining
While breakfast is growing opportunity for c-stores, baked goods provide customers with an excellent snack source throughout the day. “Doughnuts are definitely a morning item, but muffins and cookies sell 24/7, and they need to be marketed that way. That’s what’s driving the business.”

Not that a connection to breakfast business is a bad thing. In fact, many c-stores have done quite well catering to the early morning rush.
“Breakfast is a very dynamic segment in which consumers are looking for healthier options and place a premium on convenience,” said Technomic Executive Vice President Darren Tristano. “Our busy lives and weekly routines drive the need for fast, convenient options in the morning. When consumers don’t have convenient options, they’re increasingly bringing breakfast from home to eat elsewhere.”

There are, in Weiner’s estimation, a lot of convenience store operators around the country who do a good job with baked goods. Most notably, La Crosse, Wis.-based Kwik Trip has been producing baked items out of a central commissary, and quite profitably, for more than a decade and a half. Altoona, Pa.-based Sheetz has followed the same route, distributing its high quality breads, cookies, rolls and muffin tops to locations across six states. Family Express in Valparaiso, Ind., owns the local market with its proprietary square doughnuts.

“How chains get customers into stores isn’t as important, in the long run, as making sure they get there,” Weiner said.

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