Friday, 4 July 2014

BAKING INDUSTRY TRENDS: Sales of Prepared Cakes, Pies Hit $11 Billion



Sales of Prepared Cakes, Pies Hit $11 Billion
 - Blogs
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Driven by interest in the prepared cakes and pies category during the economic recession, as well as the period surrounding the Hostess Brands bankruptcy in 2012, retail sales of prepared cakes and pies grew 24 percent from 2009-14 to reach $11.2 billion, according to a new report from Mintel.

Interestingly, consumer’s focus on fresh flavors and a shift toward viewing pies and cakes as an indulgent snack resulted in a 2.4 percent decline in the frozen and refrigerated cakes and pies segment.

Despite a general trend toward healthier eating in the United States, the category continues to grow. The report,“Prepared Cakes and Pies - US - June 2014," in-store baked cakes and pies are driving the category with sales representing 52 percent of the overall category, followed by shelf-stable cupcakes and brownies at 23 percent. Forty-six percent of consumers who eat prepared cakes and pies view them as an indulgence and 42 percent are open to trying new flavors. Good news for food manufacturers and retailers is the fact that 61 percent of consumers (and 72 percent of consumers aged 25 to 34) will pay more for gourmet or premium products.

Private label represents the largest category market share at 38 percent, a larger share than the market share of all five brand leaders combined. The majority of sales within the prepared cakes and pies category are in supermarkets, which make up 65.8 percent of the market.

“The snacking mindset has permeated the dessert segment, as people are mindful of what they eat, but at the same time, want to indulge and treat themselves as well," said Mintel food analyst Amanda Topper. “Much as we’ve seen with the high-end cupcake and doughnut trends, consumers are willing to pay a little bit extra for a small indulgence made with quality ingredients.

The report also found nearly two-thirds of consumers value taste over nutrition and more than two-thirds would like to see more flavor variety, which presents an opportunity to offer more unique, high-quality offerings, especially to younger consumers who are more brand loyal and willing to pay the price premium.

Topper said more than two-thirds of consumers have eaten some type of RTE cake or pie within the past six months, and the majority are open to experimenting with flavors and hybrid flavors, such as sweet and saltyoptions, or seasonal and limited-edition varieties. Consumers who buy prepared cakes and pies also are looking for products with natural ingredients, without additives or preservatives, which gives manufacturers the opportunity to focus on promoting the quality of their ingredients, and promote them via easy-to-read ingredient lists.
So what does this mean to product developers? Creating products to satisfy consumers’ demand for novel tastes and experiences will be key in combating the challenges this mature market will continue to face due to consumers increasingly seeking out fresher and more innovative snacks and desserts from in-store and independent bakeries.

Looking ahead, category growth will rely on manufacturers’ ability to meet consumer demands for better ingredients, great taste and portability. An increase in consumer snacking (1 out of every 5 eating occasions in the U.S. is a snack) and greater retail availability of prepared baked goods also will benefit the category.

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