Report Summary

Building longer-term loyalty, shopping habits, and growth in the ISB will require a healthy balance of indulgence and meeting everyday needs. Innovation on the menu can create new occasions, but so can getting creative with pairings and merchandising that embraces the full power of the perimeter.

Kelsey Olsen, Food & Drink Analyst

Table of Contents

  1. Executive Summary

    • What you need to know
    • Consumer trends: key takeaways
    • Market size and forecast
    • Market predictions
    • Opportunities
  2. Market Dynamics

    • Market context
    • Market drivers
    • Retailers can address labor issues through tech
    • Cooling inflation will benefit some baked goods more than others
    • Away-from-home food costs suggest at-home eating occasions will stick around
    • Upbeat consumers may indulge in new ways…
    • Graph 1: consumer sentiment index, 2021-24
    • …yet comfort and value will remain priority
    • Graph 2: overall food and drink shopping priorities – important factors when selecting food and drink , 2023
    • Market size and forecast
    • In-store traffic and inflation fuel ISB growth
    • Steadier, enduring growth on the horizon
    • ISB market is almost $4B stronger than 2018…
    • …with inflation playing a hand
    • Market segmentation
    • Embrace the savory side of the ISB
    • Build the routine portion of the ISB business: breads and rolls, and breakfast
    • Graph 3: total retail sales and forecast of in-store bakery, by segment, at current prices, 2018-28
    • Retail sales of in-store bakery, by segment
  3. Consumer Insights

    • Consumer fast facts
    • In-store bakery products purchased
    • ISB gains traction despite, or because of, lingering inflation
    • Graph 4: in-store bakery purchase, 2023-24
    • Even ISB shoppers with limited repertoires buy both sweets and pantry staples
    • Graph 5: repertoire of ISB items purchased, 2024
    • Graph 6: products purchased, by repertoire of products purchased, 2024
    • From Gen X to Gen Z, the ISB is rising
    • Graph 7: in-store bakery purchase, by generation, 2024
    • Flexibility creates relevance for all household sizes
    • Graph 8: in-store bakery purchase, by household size, 2024
    • ISB purchase frequency by product type
    • Breads aren't the stars of the ISB, but maybe they should be
    • Graph 9: frequency of in-store bakery purchase, 2024
    • The ISB is seeing broader generational shifts in shopping habits
    • Graph 10: ISB product purchase frequency, regular purchase, by generation, 2024
    • Household size is a barrier to regular ISB engagement…
    • Graph 11: frequency of in-store bakery purchase by product – regularly purchase, by household size, 2024
    • In-store bakery occasions
    • Bend, don't break, consumers' ideas about the ISB
    • Graph 12: in-store bakery occasions, 2024
    • Gen Zs and Millennials have changes in mind for the ISB
    • Graph 13: in-store bakery occasions, by generation, 2024
    • The ISB can act as an extension of prepared foods
    • Graph 14: in-store bakery occasions, by household size, 2024
    • Interest in in-store bakery experience
    • Retailers: create a sense of ISB FOMO with simple experiences
    • Graph 15: interest in in-store bakery experience, 2024
    • Think like an operator to meet the ISB needs of the now and next generations
    • Graph 16: interest in in-store bakery experience, by generation, 2024
    • The ISB can bring instant and delayed convenience to larger households
    • Graph 17: interest in in-store bakery experience, by household size, 2024
    • In-store bakery product concept interest
    • Give ISB shoppers what they want: options for all day, every day
    • Graph 18: interest in in-store bakery product concepts, 2024
    • Millennials and Gen Zs paving the way for an ISB that meets all-day needs
    • Graph 19: interest in in-store bakery product concepts, by generation, 2024
    • Value is not one size fits all
    • Graph 20: interest in in-store bakery concepts, by household size, 2024
    • Competitive baked goods attributes
    • Convenience is an ISB staple, yet the department can wear many other hats
    • Graph 21: attributes associated with baked goods from specific locations, 2024
    • Let Boomers know the ISB can fulfill needs beyond sweets
    • Graph 22: attributes associated with baked goods from the in-store bakery, by generation, 2024
    • Today's investment to update ISB will deliver long-term returns
    • Graph 23: attributes associated with baked goods from the in-store bakery, by generation, 2024
    • Add premium options to turn occasional to habitual
    • Graph 24: attributes associated with baked goods from the in-store bakery, by household size, 2024
    • In-store bakery attitudes
    • Driving traffic to the ISB may be as simple as leaving it
    • Graph 25: in-store bakery attitudes, 2024
    • Gen Zs and Boomers don't see eye to eye on experiences
    • Graph 26: in-store bakery attitudes, by generation, 2024
    • Don't just think big, there are small opportunities
    • Graph 27: in-store bakery attitudes, by household size, 2024
  4. Innovation and Marketing Trends

    • Launch activity and innovation
    • Brands bridge the household size gap with small bites
    • Consumers are open to indulgence in different, yet everyday ways
    • Target's Favorite Day blurs the line between center of store and ISB
    • Brands extend the celebration with year-round reasons
    • Brands are inviting consumers to explore on their own
    • Flavorscape AI: Bakery
    • Marketing and advertising
    • Think outside the pack for premium positioning
    • Making ISB just another destination for international flavors at the store
    • The ISB can fit different dietary needs and preferences
    • Opportunities
    • Meeting the in-between moments
  5. Appendix

    • Market definition
    • Consumer research methodology
    • Generations
    • Abbreviations and terms
    • Market size methodology
    • Forecast
    • Forecast fan chart
    • The market: inflation-adjusted tables
    • Total retail sales and forecast of desserts, at inflation-adjusted prices, 2018-28
    • Total retail sales and forecast of breads and rolls, at inflation-adjusted prices, 2018-28
    • Total retail sales and forecast of breakfast bakery, at inflation-adjusted prices, 2018-28

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