1 Mar 2019
In today’s world, there is a lot of chatter about how the retail landscape is evolving and we notice that consumers are purchasing more and more online. So you could wonder: is this also the case for baked goods and if so, does this mean that the in-store bakery is seeing its end?
Based on consumer research, we can state the contrary: the in-store bakery will become even more important and allow retailers to gain a competitive advantage. We believe that turning your in-store bakery into a destination category can increase traffic to your physical locations.
First, we can rest assured; 97% of the Canadian population still prefers to do its grocery shopping at a physical location (FMCG Gurus, 2018: Understanding Grocery Shoppers in Canada). The 2018 In-Store Mintel study backs this up by showing that 55% of Canadians say they know what they want before entering the store. Canadians love their routine, as 55% said they know what they want before entering the store and 48% follow a strict routine around the aisles. The main reason why Canadian consumers still prefer the brick & mortar approach is the fact that they can evaluate the freshness of their groceries. This is also the case for the bakery category: with 54% of Canadians claiming to purchase bread and 43% claiming to purchase sweet baked goods from an in-store bakery, the importance of both categories can clearly not be understated.
When consumers were asked why they shop at an in-store bakery, “baked on the same day” was given as the most important consideration, aside from price. In addition, texture was provided as the next top answer, which can be interpreted as a factor that relates to freshness.
Freshness, together with taste and health, has always been a key factor when buying baked goods. Freshness is the core value for in-store bakeries and can become a point of differentiation when it comes to drive physical traffic to their locations.
However, there is room to improve the in-store bakery experience. According to the Mintel study, a substantial share of Canadians (39%) agree that “stand-alone bakeries”, such as bakery shops, offer a better experience compared to in-store bakeries and just one fifth (21%) agree that they “will make a special trip to a grocery store for its in-store bakery”. This indicates that if you really want the in-store bakery to become a destination category, it is important to focus on service, quality and innovation.
Next to freshness, the study also reveals that in 61% of cases, “local” matters. Locally made can be interpreted in different ways and we believe in the importance of showing consumers a product’s authenticity at in-store bakeries. Seeing how the bread is baked allows for more transparency and guarantees freshness. A consumer’s in-store decision is highly influenced by many sensorial cues: the smell of freshly baked bread and the way the products are presented. In addition to seeing and smelling, getting more details about the ingredients being used and the story behind the bread or cakes are some elements that could amp up the fresh bakery aisle (2018, Ipsos, Qualitative Bakery Category Shopper research).
At Puratos Canada, we believe that the in-store bakery is an important category for the retailer: it can become a destination category and help drive traffic to your physical stores. Seeing the bakers at work, smelling the bread, having a clear view of the offerings, sampling products and having additional information provided to the consumer – all of this will give the consumer a great experience that will make them want to come back.
Based on international and local research, we are able to offer you support to modify your bakery category, in terms of portfolio, as well as help you decide on the optimal production process that can work for you and provide you with merchandising inspiration. With this in mind, Puratos has developed a unique approach to Category Management, taking into consideration the specificities of the fresh bakery category and your way of operating.
This article is written by Liesbet Vandepoel, Marketing Director, Puratos Canada. She has over 15 years of expertise in marketing in Europe and North America, and has developed a true passion for food as well as a thorough understanding of the people who consume it.
· 2018, Mintel, In-Store Bakery Experience, online research
· 2018, FMCG Guru, Understanding Grocery Shoppers in Canada, online research.
· 2018, Ipsos & Puratos, Bakery Category Shopper, qualitative research