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- Home Baking - US - January 2012
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Strong growth in the $12 billion home baking industry at FDMx in 2008 and 2009 slowed to a halt in 2010 and 2011. Similarly, strong growth in consumer interest in home baking waned slightly in the period, having been driven in recent years in part by a desire to save money during the economic downturn. A rebounding economy that frees consumers from the need to prepare food at home, competition from in-store bakeries (ISBs) and alternative markets, as well as a growing consumer interest in healthy eating challenge sales.
Product innovation and targeted outreach is necessary to stimulate market interest and retain consumers through the economy’s ups and downs.
This report aims to help companies that compete in this sector make informed decisions in marketing messages, launch new products that are on trend, as well as identify strategies that can help invigorate sales.
Some key aspects covered in the report include:
The size of the market, and explanations for its movement.
Who are the leading companies and brands and how they are performing in a recently declining market (including private label)?
The effect of demographic shifts on the industry, with particular focus on age and households with children.
Understanding the challenges imposed by competitive sources such as ISBs, as well as rising commodity costs.
Discussion of health and wellness trends as they influence consumer behavior.
Opportunities for sales growth, including new product innovation and positioning.
Segment performance within the category and the role of these segments in the growth of the industry as a whole.
The most prevalent product claims in the past several years.
Retail channel performance and opportunities for growth.
Understanding who the home baker is, as well as usage comparisons and motivations by key demographic profiles.
An assessment of consumer attitudes and opinions of home bakers, including what they use, what they bake, where they shop, what drives purchases, and innovations of interest.
Differences between scratch bakers and mix bakers.
Marketing and promotional strategies of leading suppliers.
The importance of technology in growing the market.
Issues in the Market
Key themes
Definition
Data sources
Sales data
Consumer data
Abbreviations and terms
Abbreviations
Terms
Future Opportunities
The heart of the matter
Think outside of the chocolate box
Sensory experience in the shopping aisle
Gifting opportunities
Figure 1: Pie carrier, September 2011
Playing with food
Baking-centric stores
Market in Brief
Regular home bakers are golden
Instance of home baking
Home baking industry strong in 2008-09; not so strong in 2010-11
Rising costs and competition always challenging
It’s the economy
Demographics portend substantial changes in the market
How can the industry drive both indulgent and BFY simultaneously?
Ingredient choices
Leading companies lose ground to private label
Social media is the place to be
Internal Market Environment
Key points
Food costs on the rise…
…but consumers are spending less on groceries
Changing flavor preferences
Figure 2: Top 10 flavors, baking ingredients and mixes, 2006 and 2011*
Figure 3: Duncan Hines strawberry cupcakes, 2011
Broader Market Environment
Key points
Economic uncertainty keeps consumers cost-conscious
Figure 4: University of Michigan’s index for consumer sentiment, January 2007-August 2011
Aging population presents a challenge to the industry
Figure 5: Frequency of baking at home, by age, August 2011
Figure 6: Population, by age, 2006-16
Decline in households with children further reduces target audiences
Figure 7: Frequency of baking at home, by household size and number of children, August 2011
Figure 8: Households, by presence of children, 2000-10
Race/ethnic population trends could be beneficial to the industry
Figure 9: Frequency of baking at home, by race/Hispanic origin, August 2011
Figure 10: Population, by race/Hispanic origin, 2006-16
Competitive Context
Key points
Competing baked goods
Packaged goods
Figure 11: New bakery product releases, 2005-10
Smaller servings
Healthy
Alternatives to chocolate
In-store bakeries
Foodservice
Strengths and Weaknesses
Strengths
Weaknesses
Who’s Innovating?
Key points
Significant increase in product releases
Figure 12: New U.S. baking mixes and ingredients, 2005-10
Leading companies with new product activity
Figure 13: New U.S. baking mixes and ingredients, by company, 2010
Health claims reign in home baking product releases
Figure 14: Top 10 U.S. food claims, baking ingredients and mixes, 2006 and 2011*
Companies gaining confidence in new product introduction
Figure 15: New baking mixes and ingredients, by launch type, 2009-11*
Health-conscious
Figure 16: Dietary habits, by gender and age, April 2011
Smaller portions
Organic
Gluten-free
Convenience
Growth of private label
New formats
New packaging
Throwback
A muffin by any other name
Specialty getting in on the act
Going the extra mile
Local specialty
Market Size and Forecast
Key points
Home baking market slows
Figure 17: Total U.S. FDMx sales and forecast of home baking products, at current and constant prices, 2006-16
Figure 18: Total U.S. FDMx sales and forecast of home baking products, at current prices, fan chart, 2006-16
Segment activity is evidence of decrease in home baking
Figure 19: Total U.S. FDMx sales of home baking products, by segment, 2006-16
Walmart sales
Segment Performance
Key points
Segment growth/decline patterns indicate slowing market
Figure 20: FDMx sales of home baking products, by segment, 2007-10
Shortening and oil
Sugar
Baking mixes
Syrups/molasses
Dried/glazed fruit and baking nuts
Flour
Baking chocolate/cocoa
Sugar substitutes
Market Share
Key points
Market leaders see significant shifts, but little share change
Private label grows by nearly a third
Figure 21: FDMx sales of home baking products, by company, 2006-10
Private label likely to continue to grow
Companies and Products
Manufacturers and brands
Figure 22: Leading companies in the U.S. home baking market and their brands, 2011
Major players
McCormick and Company
Recent activity
Product range and innovation
Figure 23: Products launched by McCormick in the U.S. home baking market, 2009-11*
J.M. Smucker Co.
Recent activity
Product range and innovation
Figure 24: Products launched by Smucker’s in the U.S. home baking market, 2009-11*
General Mills, Inc.
Recent activity
Product range and innovation
Figure 25: Products launched by General Mills in the U.S. home baking market, 2009-11*
Kraft Foods, Inc.
Recent activity
Product range and innovation
Figure 26: Products launched by Kraft in the U.S. home baking market, 2009-11*
Nestlé S.A. (Switzerland)
Product range and innovation
Figure 27: Products launched by Nestlé in the U.S. home baking market, 2009-11*
Pinnacle Foods Corp.
Recent activity
Product range and innovation
Figure 28: Products launched by Pinnacle Foods in the U.S. home baking market, 2009-11*
ConAgra Foods Inc.
Recent activity
Product range and innovation
Figure 29: Products launched by ConAgra Foods in the U.S. home baking market, 2009-11*
Associated British Foods (ABF)
Recent activity
Product range and innovation
Figure 30: Products launched by ABF in the U.S. home baking market, 2009-11*
Brand Communication and Promotion
Key points
A look at adspend
Traditional media adspend is unstable
Figure 31: Superbrands, 2008 and 2009
Increases forecast for online and mobile ad spending
Figure 32: Projected U.S. online ad spending, by format, 2010-15
Figure 33: Projected change in U.S. ad spending rate from previous year, by format, 2010-15
Figure 34: Google recipe view, September 2011
Figure 35: Top 10 U.S. online display ad* publishers, Q1 2011
Messaging: Focus on adults
Tactics: Building a connection with the consumer
Figure 36: King Arthur Flour wheat farmer videos, September 2011
Figure 37: King Arthur Flour ad, Real Simple magazine, October 2011
Brand advocates
Tactics: Promoting cost savings
Daily deals
Magazine coupons
Figure 38: Domino agave nectar ad, Eating Well, September/October 2011
Tactic: Dynamic engagement
Figure 39: Cooking Light ad, Cooking Light, October 2011
Figure 40: Simply Organic ad, Eating Well, September/October 2011
Channels to Market
Key points
Food stores dominate home baking sales
Figure 41: FDMx sales of home baking products, by segment, 2006-10
Challenges within retail channels and opportunities to grow business
Baking Aisle Audit
Supermarket: Jewel
Supermarket: Safeway
Natural Foods: Whole Foods
Mass merchandise: Target
Mass merchandise: Walmart
Drug store: Walgreens
Drug Store: Rite Aid
Convenience store: 7-11
The Consumer—Home Baking Frequency
Key points
Getting bakers to bake more is key to growing business
Home is for both male and female bakers
Consumers aged 25-44 comprise target audience
Figure 42: Frequency of baking at home, by gender and age, August 2011
Higher income earners bake with greater frequency than the rest
Figure 43: Frequency of baking at home, by income, August 2011
Bigger households bake more
Figure 44: Frequency of baking at home, by household size and number of children, August 2011
Age of children impacts frequency of home baking
Figure 45: Frequency of baking at home, by age of children, August 2011
Those who work more, bake more
Figure 46: Frequency of baking at home, by employment, August 2011
The Consumer—Baking Ingredients Purchased
Key points
Sugar, butter and flour top the list of baking ingredients purchased
Figure 47: Ingredients bought in the last six months for baking at home, by baking frequency, August 2011
Bakers aged 25-44 are most likely target shoppers
Figure 48: Ingredients bought in the last six months for baking at home, by gender and age, August 2011
Higher income earners buy more
Figure 49: Ingredients bought in the last six months for baking at home, by income, August 2011
The Consumer—What’s in the Oven?
Key points
Mix baking more common than scratch baking among home bakers
Mix brownies take the cake
Using knowledge of baking preferences to boost sales
Mixing up the mix/scratch mix
Figure 50: Items baked at home in the last six months, mix versus scratch, August 2011
Baking frequency an indication of baking skill
Figure 51: Items baked at home from a mix in the last six months, by baking frequency, August 2011
Figure 52: Items baked at home from scratch in the last six months, by baking frequency, August 2011
The South is into mix, while the Northeast does it from scratch
Figure 53: Items baked at home from a mix in the last six months, by region, August 2011
Figure 54: Items baked at home from scratch in the last six months, by region, August 2011
The Consumer—Reasons for Home Baking
Key points
Care and control represent important reasons for home baking
Learning to bake, or not
Figure 55: Reasons for home baking, by gender and age, August 2011
High income earners looking to do more
Figure 56: Reasons for home baking, by income, August 2011
Large households find greater freedom in baking than smaller ones
Children as backseat drivers to home baking
Figure 57: Reasons for home baking, by household size and number of children, August 2011
Age of children plays a role in engagement
Figure 58: Reasons for home baking, by age of children, August 2011
The Consumer—Home Baking Habits
Key points
Home bakers like to be in the know
The importance of branded recipes
Finding recipes online
Positioning scratch as easy
Thinking about ingredients
Figure 59: Home baking habits, by baking frequency, August 2011
Men drawn to freedom and flexibility in the kitchen
Figure 60: Home baking habits, by gender and age, August 2011
Highest income earners most selective about ingredients
Figure 61: Home baking habits, by income, August 2011
Largest households look for ways to stretch the food dollar
Figure 62: Home baking habits, by household size and presence of children, August 2011
The Consumer—Home Baking Motivations
Key points
Home baking as a way of life
Shifts toward and away from home baking
Figure 63: Home baking motivations, by gender and age, August 2011
Lower income earners look to home baking to save money
Figure 64: Home baking motivations, by income, August 2011
Keeping up with family tradition strongest among families
Larger households turn to home baking for cost savings
Figure 65: Home baking motivations, by household size and presence of children, August 2011
The Consumer—Importance of Health Claims
Key points
“All natural” tops the list of important ingredient attributes
Some demographics may be stronger preference drivers than others
Figure 66: Importance of health claims, by gender and age, August 2011
The impact of income
Figure 67: Importance of health claims, by income, August 2011
Age of children might not drive preferences of parents
Figure 68: Importance of health claims, by age of children, August 2011
Midwesterners go with the flow
Figure 69: Importance of health claims, by region, August 2011
Daily bakers are demanding shoppers
Figure 70: Importance of health claims, by baking frequency, August 2011
The Consumer—Where Ingredients Are Purchased
Key points
Supermarkets are leading shopping preference of home bakers
Growth of other retail channels
Figure 71: Where ingredients are purchased, by gender and age, August 2011
Low income earners seek cost savings, high earners seek specialty
Figure 72: Where ingredients are purchased, by income, August 2011
Larger households take advantage of any opportunity to stock up
Figure 73: Where ingredients are purchased, by household size and presence of children, August 2011
Geographic landscape defines shopping patterns
Figure 74: Where ingredients are purchased, by region, August 2011
Daily bakers shop everywhere to get what they want
Growing online sales
Figure 75: Where ingredients are purchased, by baking frequency, August 2011
The Consumer—Reasons for Not Baking
Key points
Baking seen as taking too much time
Combating a limited view of baked goods
Instilling the consumer with the confidence that they can do it
Competition from RTE
Figure 76: Reasons for not baking, by gender and age, August 2011
Baking time could be family time well spent
Catering products to single households
Figure 77: Reasons for not baking, by household size and presence of children, August 2011
Figure 78: Reasons for not baking, by age of children, August 2011
Impact of Race and Hispanic Origin
Key points
Hispanic and Asian home bakers key to future growth
Figure 79: FREQUENCY OF BAKING AT HOME, by race/Hispanic origin, August 2011
Asian bakers are prolific shoppers
Figure 80: INGREDIENTS BOUGHT IN THE LAST six MONTHS FOR BAKING AT HOME, by race/Hispanic origin, August 2011
Giving the people what they want
Figure 81: ITEMS BAKED AT HOME from a mix IN THE LAST six MONTHS, by race/Hispanic origin, August 2011
A point of entry for the black home baker
Figure 82: ITEMS BAKED AT HOME from scratch IN THE LAST six MONTHS, by race/Hispanic origin, August 2011
Asians take control
Figure 83: Attitudes towards baking, by baking frequency, August 2011
Asian bakers do what they want, Hispanic bakers seek advice
Figure 84: Home baking habits, by race/Hispanic origin, August 2011
Baking as a part of life for Asians
Figure 85: Home baking motivations, by race/Hispanic origin, August 2011
Asian and Hispanic home bakers exhibit a strong interest in health
Figure 86: Importance of health claims, by race/Hispanic origin, August 2011
Asians willing to shop at a variety of venues
Figure 87: Where ingredients are purchased, by race/Hispanic origin, August 2011
Time is of the utmost importance to Asian home bakers
Figure 88: Reasons for not baking, by race/Hispanic origin, August 2011
- ACH Food Companies Inc.
- Aldi (USA)
- AOL
- Associated British Foods Plc
- Blue Diamond Growers
- Bob's Red Mill Natural Foods
- Campbell Soup Company
- Cargill Incorporated
- CBS Corporation
- Cinnabon, Inc.
- ConAgra Foods, Inc
- Continental Mills Inc
- Crate & Barrel
- Dole Food Company Inc.
- Dr Oetker
- Facebook, Inc.
- Fox Interactive Media
- General Mills Inc
- Google, Inc.
- Groupon, Inc.
- Hershey Company, The
- Institute of Food Technologists (IFT)
- Interactive Advertising Bureau (US)
- International Dairy·Deli·Bakery Association
- International Food Information Council Foundation (IFIC)
- International Speedway Corporation
- Kinnikinnick Foods
- Kraft Foods Inc. (U.S.A.)
- Lindt & Sprüngli (US)
- McCormick & Company, Inc.
- Microsoft USA
- Nestlé USA
- NutraSweet Company, The
- Pillsbury
- Pinnacle Foods Group Inc.
- Republic of Tea Inc., The
- Rite Aid Corporation
- Safeway Inc
- Subway
- Sunsweet Growers Inc.
- Target Corporation
- The Ghirardelli Chocolate Company
- The J. M. Smucker Company
- The Kroger Co.
- The New York Times Company
- Trader Joe's Company Inc
- Turner Broadcasting System, Inc.
- U.S. Bureau of Labor Statistics
- U.S. Bureau of the Census
- U.S. Department of Agriculture
- US Department of Commerce
- Viacom Inc.
- Walgreen Co
- Walmart Stores (USA)
- Whole Foods Market Inc
- Williams-Sonoma, Inc
- Yahoo! Inc
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