Description

Providing the most comprehensive and up-to-date information and analysis of the U.S In-Store Bakeries market including the behaviours, preferences and habits of the consumer.

After several years of growth, the in-store bakery category experienced sales declines as a result of pandemic-triggered closures and changed shopping behaviors. Declines don’t indicate a lack of consumer interest though; ISBs rebounded from an early pandemic drop-off, and a strong share of consumers increased their ISB product consumption in 2020. Still, the ISB will be challenged to rise to quickly evolving opportunities like reaching shoppers out-ofstore, ensuring that the ISB meets a variety of dietary preferences and preventing cost-conscious consumers from deserting the ISB for the aisle.

Quickly understand

  • The impact of COVID-19 on consumer behavior and the in-store bakery market
  • The impact of past recessions on in-store bakery sales
  • Change in ISB product consumption from 2020
  • Motivations for choosing the ISB over the aisle and vice versa

Covered in this report

The core focus is on: In store bakeries within supermarkets, mass merchandisers or club stores that offer an assortment of bakery products such as breads, cakes, pies, bagels, cookies, doughnuts and muffins.

Expert analysis from a specialist in the field

Written by Kaitlin Kamp, a leading analyst in the Food & Drink sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

In-store bakery sales declined for the first time in more than a decade in 2020, as some retailers shut down bakeries during the initial phase of pandemic response and consumers turned to affordable aisle offerings and online shopping channels during a time of uncertainty and disruption. But the dip doesn’t point to a lack of interest.

Kaitlin Kamp
Food & Drink Analyst

 

Table of Contents

  1. Overview

    • What you need to know
    • Key issues covered in this Report
    • Definition
    • COVID-19: Market context
    • Economic and other assumptions
  2. Executive Summary

    • Top takeaways
    • Market overview
      • Figure 1: Total US sales and fan chart forecast of in-store bakeries, at current prices, 2015-25
    • Impact of COVID-19 on in-store bakeries
      • Figure 2: Short-, medium- and long-term impact of COVID-19 on in-store bakeries, February 2021
    • Opportunities and Challenges
    • Re-emergence
      • Figure 3: Interest and experience with making and purchasing baked goods, December 2020
      • Figure 4: Baked goods purchase, by household income, December 2020
    • Recovery
      • Figure 5: claims on new product introductions, bread products, % total, 2020
      • Figure 6: claims on new product introductions, cakes, pastries, sweet goods and cookies, % total, 2020
  3. The Market – Key Takeaways

    • ISB sales dip 2.4% amid pandemic disruption; bread rises above the rest
    • Increased safety measures ease consumer health concerns
    • #quaratinebaking has a short shelf life
    • The ISB needs to improve its value proposition
    • Extend the ISB experience online
    • Put the BFY into ISB
  4. Market Size and Forecast

    • ISB sales slip as a result of COVID-19 limitations
      • Figure 7: Total US sales and fan chart forecast of in-store bakeries, at current prices, 2015-25
      • Figure 8: Total US retail sales and forecast of in-store bakeries, at current prices, 2015-25
    • Impact of COVID-19 on in-store bakeries
      • Figure 9: Short-, medium- and long-term impact of COVID-19 on in-store bakeries, February 2021
    • Lockdown
    • Re-emergence
    • Recovery
    • COVID-19: US context
    • Learnings from the last recession
      • Figure 10: Total US retail sales and forecast of in-store bakeries, 2007-12
  5. Segment Performance

    • Breads and rolls find growth amid lagging market sales
    • Breakfast bakery faces steep competition
    • Desserts may need to go smaller in the interim
      • Figure 11: Total US retail sales and forecast of in-store bakeries, by segment, at current prices, 2015-25
      • Figure 12: Market share % of total (and share change 2018-20), by segment, 2020
  6. Market Factors

    • ISB safety measures have made a dent in COVID-19 concerns
      • Figure 13: Baked goods from 7-Eleven in individual packaging
    • Cautious consumers hesitant to hold gatherings for the foreseeable future
    • COVID-19 accelerates eCommerce
      • Figure 14: Major grocery categories, online vs instore, February 2020
    • The at-home baking craze cools down
      • Figure 15: Monthly social media mentions of at-home baking on Instagram, Pinterest and Twitter, March-November 2020
    • Persisting unemployment favors the center store
      • Figure 16: U.S. unemployment, June 2018-November 2020
    • Consumers have a fresh take on BFY eating
      • Figure 17: Opinions on food types, Net – any healthy, August 2020
    • Standalone bakeries take a hit
  7. Market Opportunities

    • Expand the in-store bakery to include an online experience
      • Figure 18: Examples of extended online engagement from grocery retailers
    • Encourage convenient, affordable experimentation
      • Figure 19: Grocery retailer advertisements
    • A baked good for everyone – appealing to specialty diets
      • Figure 20: Specialized diet-friendly baked goods
    • Seasonal offerings are still an opportunity
      • Figure 21: Seasonal baked goods
  8. Companies and Brands – Key Takeaways

    • The ISB expands its BFY territory
    • Who needs a sheet cake right now, anyway?
    • All the banana bread, none of the mess
  9. Competitive Strategies

    • ISB offerings slowly catch up on BFY claims
      • Figure 22: Claims on new product introductions, bread products, % change, 2019-2020
      • Figure 23: Claims on new product introductions, bread products, % total, 2020
      • Figure 24: Claims on new product introductions, cakes, pastries, sweet goods and cookies, % change 2019-2020,
      • Figure 25: Claims on new product introductions, cakes, pastries, sweet goods and cookies % total 2020,
    • Big baked goods go small for smaller gatherings
      • Figure 26: Smaller sized baked goods
    • The ISB takes a page out of home bakers’ playbook
      • Figure 27: Trending bakery items
      • Figure 28: Top baking hashtags, Pinterest and Twitter, March-November 2020
      • Figure 29: Lemon and berry-flavored baked goods
  10. The Consumer – Key Takeaways

    • The aisle continues to dominate baked goods purchases
    • Despite sales declines, a strong share are eating more ISB items
    • The aisle is pragmatic; the ISB is an experience
    • Some COVID-19 safety concerns linger
    • eCommerce participation has nowhere to go but up
    • Consumers want to have their cake and health goals too
  11. Baked Good Purchase

    • ISB breads fall behind packaged options
      • Figure 30: Baked goods purchase, December 2020
    • Young consumers are less-engaged in baked goods
      • Figure 31: Baked goods purchase, by age, December 2020
    • Parents are engaged ISB users
      • Figure 32: Baked goods purchase, by parental status, December 2020
    • Consumers recognize that the ISB comes at a premium
      • Figure 33: Baked goods purchase – nets, by household income, December 2020
  12. Change in Baked Goods Consumption

    • More than a third have increased their ISB patronage during COVID-19
      • Figure 34: Change in baked goods consumption, December 2020
      • Figure 35: Baked goods purchases, November 2019-December 2020
    • Keep the Millennial momentum going
      • Figure 36: Change in baked goods consumption, by age, December 2020
    • Convenience rules with dads
      • Figure 37: Change in baked goods consumption, by parental status and gender, December 2020
  13. Reasons for Shopping the Aisle

    • The aisle wins for affordability, longer shelf life and range
      • Figure 38: Reasons for choosing baked goods from the aisle over the ISB, December 2020
    • Highlight convenience to win over younger consumers
      • Figure 39: Reasons for choosing baked goods from the aisle over the ISB, by age, December 2020
    • Target dads with health and flavor innovation
      • Figure 40: Reasons for choosing baked goods from the aisle over the ISB, by parental status and gender, December 2020
  14. Reasons for Shopping the ISB

    • In-store bakeries should feel more like a bakery, less like a store
      • Figure 41: Reasons for choosing baked goods from the ISB over the aisle, December 2020
    • Experimentation and customization are distinct advantages for those 25-34
      • Figure 42: Reasons for choosing baked goods from the ISB over the aisle, by age, December 2020
      • Figure 43: Milk Bar sampler box
    • Position the ISB as a convenient option for special and everyday occasions
      • Figure 44: Reasons for choosing baked goods from the ISB over the aisle, by food and drink segmentation, December 2020
  15. ISB Attitudes

    • A quarter of consumers have lingering safety anxieties around the ISB
    • Nurture impulsivity
      • Figure 45: ISB attitudes, December 2020
    • Those under 45 the most concerned about safety
      • Figure 46: ISB attitudes, by age, December 2020
  16. Interest and Experience with Making and Purchasing Baked Goods

    • There’s opportunity to expand online participation
      • Figure 47: Interest and experience with making and purchasing baked goods, December 2020
    • Consumers under 45 more receptive to new methods
      • Figure 48: Interest and experience with making and purchasing baked goods, by age, December 2020
    • Convert mix users with take and bake
      • Figure 49: Interest and experience with making and purchasing baked goods by baked good purchase, December 2020
  17. Interest in Innovation by Baked Good

    • Embrace freshness and health
    • Breads can rise to artisanal, wellness challenges
    • Sweets can bring the flavor
      • Figure 50: Interest in ISB baked good innovation, December 2020
    • Freshness the key to inspiring stronger engagement from older consumers
      • Figure 51: Interest in ISB baked good innovation – freshly made, by age, December 2020
    • Parents seeking out healthier options
      • Figure 52: Interest in ISB baked good innovation, net – any baked good, by parental status, December 2020
  18. Appendix – Data Sources and Abbreviations

    • Data sources
    • Sales data
    • Forecast
    • Consumer survey data
    • Direct marketing creative
    • Abbreviations and terms
    • Abbreviations
  19. Appendix – The Market

      • Figure 53: Total US retail sales and forecast of in-store bakeries, at inflation-adjusted prices, 2015-25
      • Figure 54: Average household spending on in-store bakeries, by segment, 2015-20
      • Figure 55: Total US retail sales of in-store bakeries, by segment, at current prices, 2018 and 2020
      • Figure 56: Total US retail sales and forecast of in-store bakery desserts, at current prices, 2015-25
      • Figure 57: Total US retail sales and forecast of in-store bakery desserts, at inflation-adjusted prices, 2015-25
      • Figure 58: Total US retail sales and forecast of in-store bakery breads and rolls, at current prices, 2015-25
      • Figure 59: Total US retail sales and forecast of in-store bakery breads and rolls, at inflation-adjusted prices, 2015-25
      • Figure 60: Total US retail sales and forecast of in-store breakfast bakery, at current prices, 2015-25
      • Figure 61: Total US retail sales and forecast of in-store breakfast bakery, at inflation-adjusted prices, 2015-25
  20. Food and Drink Consumer Segmentation

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