Consumers are split into two categories: Those still suffering the recent economic recession and those who have recovered and are spending again, said Jonna Parker, Nielsen Perishables Group, during her morning session at the Atlantic Bakery Expo. People increasing their spending across the country, and they are spending more on fresh food. The in-store bakery along with the in-store deli are the only two categories that are growing in both unit and dollar sales, she added.
But what is making customers spend? Parker presented three factors that cause them to open their wallets.
- Indulgence–they want a treat and they most likely won't even remember how much it cost. Cupcakes fit well in this category since they cost more than a decorated cake but more people are buying the cupcakes.
- Gourmet–they want to impress whoever is eating with them. Artisan bread, not crusty bread, is a good example of this sense of wanting gourmet food. Dipped fruit, such as chocolate-covered strawberries, also have increased in sales for the last three years with an average price of $7.24
- Niche–products that fit in with health needs or ethnic preferences. Flatbread and bolillos are good examples of niche ethnic products that consumers are looking for.
On the flip side, there are three things that don't induce consumers to spend.
- Center-store substitute–hamburger buns and everyday cookies are examples. Customers can easily get a fairly identical product in the commercial aisle for less or more name recognition.
- Competition within the in-store bakery itself–customers getting tired of purchasing a product that hasn't changed or been updated and are instead buying another product all together. Mini brownies are a perfect example.
- Breakfast items