Heather Henstock

While our economy remains in the cellar, the baking industry—especially certain segments of it—is holding its own and even prospering in some cases. You're probably inundated with recession talk streaming in from all angles…TV, Web, print news, your friends, your enemies.

If you're like me, you're probably getting a little sick of the chatter too. So, I don't mean to add to the noise about the state of our economy, but I'd like to wade through some of the clutter and relay some of the things Modern Baking is hearing from different segments of the industry.

The good:

• Celebrations—Consumers still celebrate birthdays, holidays, graduations and other life events even during a recession. The cake business is good as are bakeries supplying party platters, mini desserts and other party products.

• Comfort foods—The theory that people are drawn towards “comfort foods” during tough times is a bit misplaced to me because when do people not like comfort foods? But, with most bakery products falling under the comfort category, bakeries are taking this idea and running with it. Cookies, cupcakes, brownies, fresh bread, good pies and other “down home” bakery products are selling like hot cakes.

• More meals at home—Consumers are eating more meals at home and brown-bagging their lunches. While people may be cooking more, they're not baking more. So, all those bakery products needed to accompany or complete these home meals are coming from you. This consumer trend is really evident in positive bread and roll sales, but other bakery products that are convenient and naturally fit specific day parts also benefit from the home meal trend.

The bad:

• Struggling restaurants—While there seems to be some uptick in the restaurant business, according to new reports from the National Restaurant Association, restaurants are feeling the crunch from consumers watching budgets and opting for home meals. Specialty wholesale bakeries that supply restaurants, especially the high-end ones, are struggling with this segment of their business.

• Trading down—No doubt consumer spending is down everywhere. Your customers are scrutinizing prices and choosing items and venues that give them the biggest bang for their buck. This doesn't mean they want lesser quality. They're just looking for deals. So, high-priced, extremely specialized bakery products that are considered luxuries to the average consumer are out. Most bakeries, however, offer products at varied price points, allowing customers to treat themselves for a great value.

The ugly:

• To be honest, we're not hearing a ton of ugly. Ugly was the crazy ingredient prices we saw last year, but that seems to have eased a bit. Ugly was having to lay off staff or even close up shop for lack of business or high cost of operations, but that has slowed as well. The difficult business cuts have already been made, and the fittest bakery businesses are surviving and making new opportunities.

• So let us know how you're faring. Even better, tell us about the business strategies that are working for your bakery in this economy. Your willingness to share ideas only helps to strengthen the bakery trade.