Bakery Bites: Takeaways From the ABA Convention 2021

The 2021 ABA Convention was held virtually on March 23-24. As the dust settles from what was likely the most meaningful event in decades for the bakery industry (and essentially for all industries, for that matter), the convention provided a safe room for discussions on the lessons learned from the Covid-19 pandemic and what to expect in the months and years ahead. We share the main takeaways from the event in this inaugural Bakery Bites publication, which has been developed to regularly bring you the latest bakery sector news.

The Future Is No Longer What It Used to Be

The Annual American Bakers Association (ABA) Convention was held virtually this year. From the comfort of our home or office, we had the opportunity to share experiences and to receive valuable input on the US bakery industry.

Inevitably, the ongoing Covid-19 pandemic was the main topic discussed by most of the panels. As one participant remembered, early last year the future of the industry looked pretty steady, with opportunities lying in product differentiation and reinventing the category in a constant search for the next greatest thing. Pockets of growth were found in foodservice and supermarket in-store bakeries. Then the pandemic hit and food consumption abruptly pivoted to consumers’ homes, a movement that boosted the sales of reliable products and known brands. Moreover, the pandemic highlighted the relevance of bakery to various players in the market: investors and – most importantly – consumers.

According to IRI, total retail bakery sales rose by 5.2% in 2020, to USD 34.2bn, driven by increased at-home consumption of baked goods, namely new/expanded breakfast habits and a robust grilling season. Within grocery stores, center aisles recorded an 8.4% growth in morning baked goods, while in-store bakery sales dropped by 6.8% due to consumers making fewer trips to the grocery store and labor optimization at retailers (compared to the mid- to high single-digit growth seen in the preceding years).

The shared view is that the Covid tail/headwinds – depending on where one is positioned – were unexpected external factors that should be seen as a turning point for all players to rethink their strategies and operations. Innovation, operational simplification, and transparency building remain key drivers to keep the bakery momentum going, encouraging players to adopt…

…A Whole New Level of Consumer Centricity

Retaining the enthusiastic consumer who (re)discovered the comfort of baking and baked goods during this period of confinement is a priority for all bakeries as life is slowly returning to normal. Consumers resorted to known products during their scarce trips to the grocery store or while doing their grocery shopping online. Looking ahead, we expect consumers’ curiosity to discover new products and ingredients to pick up.

For bakery and ingredient players, it’s all about being able to benefit from the experimentation and to connect new cooking/baking skills to the convenience of packaged foods. Participants pointed out the existing demand for intermediary offerings of easier-to-prepare goods with a homemade touch, such as sourdough bread packages and DIY cake kits (this was brought up by the sourcing manager at The Giant Group). In this context, Aryzta North America also mentioned the surge in demand for its Take & Bake line that was expanded during the pandemic from a limited assortment of par-baked, shelf-stable rolls and baguettes to other bread options that promise to recreate the bakery atmosphere at home within minutes. Social media was the go-to for real-time data gathering when traditional marketing tools were unavailable. When communicating with clients, these inputs allowed Aryzta North America to pivot their message from large gatherings and social events to more focus on family moments and solo eating experiences.

Connecting Health & Wellness and “Elevated Indulgent Experiences”

Health and wellness are and will continue to be a main concern for consumers. Plant-based, keto, and immunity-boosting products and overall nutrition transparency are expected to remain part of consumers’ top goals to be and to eat healthier and, therefore, should also be incorporated into baked goods. 

But the pandemic has proved we also like the comfort of our favorite meals, from desserts to artisan breads, and this should not be considered inconsistent with health-related goals. Indulgence has a place in our hearts and stomachs, but not just any indulgence. “Elevated indulgent experience” – as mentioned in panels – means consciously accepting the calories that are worth it. It can be achieved by associating indulgence with responsible consumption through smaller sizes, clean label ingredients, and – essentially – an improved tasting experience. Taste is king, and more consumers will be inclined to pay the extra buck for the extra wow.

A New Growth Formula for the in-Store Bakery?

We were all pleased when Cordia Harrington shared her experience as Crown Bakeries’ CEO and former foodservice operator. She brought up a point we have long taken for granted in the US packaged food industry: food safety.

This was confirmed by Taneya Clark of The Giant Company, who mentioned traditional in-store bakeries sealing brown bags and plastic wrap to guarantee sanitation. Our view is that the current scenario provides an opportunity for further packaging upgrading, including branding, at in-store bakeries, increased take-and-bake offerings, additional health claims, smaller/individual sizes, and sustainable materials as a way to provide a superior and convenient shopping experience across all consumer segments.

Supporting Foodservice Partner

Foodservice recovery will be measured in years, not months. As the industry moves from surviving to thriving, we expect changes in menus and sourcing methods. This requires suppliers to support their partners and to develop solutions together, as summarized by chef Jeffrey Quasha.