Cakes often are center stage in some of life's biggest celebrations, such as weddings and birthdays, so it is not surprising that the category seems to be weathering the economy.
Cakes Often are center stage in some of life's biggest celebrations, such as weddings and birthdays, so it is not surprising that the category seems to be weathering the current economy. In Modern Baking's 2008 Supermarket Bakery Survey, custom-decorated cakes were the highest contributor to in-store bakery sales, accounting for 11.3 percent of sales, tying with crusty/hearth breads and rolls. When combining all subcategories-custom-decorated, all-occasion, wedding and upscale dessert-cakes contribute more than 27 percent to in-store bakery sales.
This is in line with the Perishables Group's FreshFacts® data from the 52 weeks ending Oct. 31, 2009. Its cake category includes wedding, decorated, dessert, ice cream, mousse, crème or pudding and snack cakes; cupcakes; cheesecakes; individual desserts; tortes and specialty dessert cakes, and accounts for 28.5 percent of in-store bakery sales. According to the Perishables Group, the category grew 2.7 percent when compared to the previous year. That is not to say that changes in what customers purchase have not occurred.
Tammy Kampsula, business director of bakery for United Super-markets, Lubbock, Texas, discusses the trends she has seen in the 50-unit chain's market. Cakes account for about 30 percent of the chain's bakery sales, its largest contributing category.
What are you seeing in the cake category?
Traditional birthday cakes and sheet cakes continue to hold strong. Where we're seeing a bigger change is in the dessert/specialty cake category. Customers still want to indulge, but they aren't necessarily buying a large specialty cake. We're selling single layer or smaller sizes of specialty cakes as well as smaller desserts. I think part of that is driven by the economy and the retail price of the cakes. Also driving the trend is people becoming more health conscious; they still want to indulge, and the smaller size provides that. If a customer purchased a large cake, it may stay on their counter for a few days.
When the economy recovers, will the smaller sizes remain popular?
I think the smaller sizes will still hold their own, but we'll also see some movement back up to the larger sizes as people have bigger parties and spend their money on that type of dessert item.
With the smaller sizes' lower price point, what has United done to continue to grow sales?
We have a 5-in. critter cake line, and we've had tremendous success with that. In fact, we recently had a Critter Day event. We created a whole Saturday event around the critter cake. It included a cakewalk-basically musical chairs-and it was intended for children, but everyone participated. We gave a cake away every hour, and during the peak times, we gave away a cake every 30 minutes. In addition, we sold quite a few cakes. We've been selling between 800 and 1,000 of the critter cakes per week; the line has been a huge success. The retail is $5.99, so it's a low enough price point that customers can take one home for their children, or grandparents can buy it for their grandchildren. Those are all incremental sales-we're growing the cake category.
How else has United boosted cake sales?
The key is to keep the varieties and the selection alive and refreshed so we are growing the category. We change our cakes on a quarterly basis. Not the entire line, but we bring varieties in and out to tempt the customer to buy. That's what's really helping to move those sales along.
How has the cake category evolved in the last five years?
You really have to look at it at two different levels. The birthday and celebration cakes continue to grow. The birthday category is evolutionary; our goal is to provide our customers with a memorable, positive cake experience for their child's birthday so they continue to buy a cake each year from us. And that flows over into purchases in other cake categories.
Where is the cake category headed?
Five years ago, we were selling larger sized cakes and that has evolved to smaller sizes for portion control. Total units are up, but we have a little self-imposed deflation with the lower retails. Still, it's about getting more units in the basket and more repeat sales.
What about cupcakes?
I think cupcakes are here to stay. You'll see different evolutions of that. There's the traditional 1.2-oz. cupcake, to a larger, gourmet-style cupcake, sort of a dessert for two. But I think you'll also see the subcategory move into the mini cupcakes. This provides another option when someone just wants a small, sweet treat. We just have to reinvent ourselves all the time, and if cupcakes do that for us and help satisfy that dessert niche or that extra treat niche, then we should be looking at that and following it.
What are you seeing as flavor trends in the cake category?
Red velvet is popular now, almond is coming on for us, and strawberry is good. Traditional, seasonal flavors, like apple and pumpkin, are popular. But almond is the one I'm hearing the most requests for. In our Amigos stores-our Hispanic format-we're looking at how to bring different flavors to market to that customer. We do cakes in our United and Market Street stores with rum flavors or amaretto flavors. We make a simple syrup, and we brush it on the cake. But in terms of infusing the cake or something like that, we're not at that point and haven't really had a lot of requests for that.
What is your best-selling cake flavor?
In our market, the traditional white and devil's food chocolate are the top two. Strawberry and tres leches do very well for us, predominantly because we have a larger concentration of Hispanics in our market.
How have the cake decorating shows on TV influenced the cake category?
I think it has actually helped because people are more aware of cakes. Just that visibility, I think it's wonderful. I think the Food Network trend has helped our industry.
Have the shows changed how you decorate your cakes?
Where we are seeing the effect is in wedding cakes. Customers want more customization, even though that subcategory has always been pretty customized. They are looking for more custom flavors, like almond, and more are requesting fondant cakes.
What trends are you seeing in in-store baking as a whole?
The cookie category continues to be strong and is growing; not only in traditional everyday cookies, but the gourmet, higher-end cookies continue to do very well. We sell those in individual units, as well as packaged.
With customers watching their spending, what advice do you have to keep customers buying?
I think it's about change. You have to continually reinvent. I'm not saying you have to develop product after product after product; it's about how you reinvent what you have while managing your SKUs. For example, in the cake category, it's bringing flavors in and out to keep the line alive or changing the decorations.
On our critter cakes, for example, the next phase is we’re bringing in a monster cake as another version of it. So we’re not adding any more SKUs, we’re just changing the decoration slightly. In the cookie category, in our butter cookies, we change the colors on them, some of them are topped with different sugars or sprinkles or decorations, and we change those according to the season or holiday, so we’re keeping the product line fresh. Every time the customer comes in, they are seeing something different. If we don’t do that, that’s what hurts sales, and we have fight for every penny we can get.
How does United handle marketing with cake category? Has the economy changed the strategy?
We’re doing a couple of things. We do direct mail as well as weekly circulars. For our Critter Day, we had a promo strip in the direct mail piece that announced when it was to get that reminder of cakes out there. We also do some specific targeted mailings. For example, for graduation, we do a direct mail piece specifically on that. In March, we’re going to do a bridal expo in our Dallas-area stores. We did it two or three years ago, and we’re going to bring it back. It’s storewide and all focused around weddings. We’re going to have cakes on display, and we’ll have a team member dress up as a bride to sample our cakes. The other departments also participate in it. We carve an area out in the store and bring awareness to the wedding cake category.
The other thing we’ve done is to do email blasts and put information about new products on our website or targeted to a holiday or special event.
How are United’s cakes produced?
In our higher volume stores, we’re doing scratch production of cakes, and in our lower sales volume stores, we’re doing frozen.
How has baking in general evolved or changed?
It’s unfortunately a dying trade. There is less scratch production today, but manufacturers of bakery products have come a long way in their quality, so that part is better. We have three different banners, and in our Market Street stores–our higher volume and where gourmet meets everyday stores–I’d say 60 percent of our sales come from scratch production. But it’s difficult to find bakers.
I think all products have gotten better. You look at par-baked artisan breads, the quality on those are great. Mixes are great. Frozen cake layers, the quality on those is great. Even pre-fried donut quality is better.
Tammy Kampsula grew up in her parent's Minnesota retail bakery. After they sold it when she was 16, she was determined she'd never work in the industry again. After a brief stint at a department store, she was once again in baking, working as a sales clerk for McGlynn Bakery's Target store outlets. For the next 30 years, she served as a bakery manager, district manager, visual merchandising manager and vice president of operations before moving to McGlynn's frozen product division, Concept 2 Bakers, as national account manager. In 2004, Kampsula joined United Supermarkets as business director of bakery.
United Supermarkets, Lubbock, Texas, which opened its first store in 1916, operates 50 units with 32 in-store bakeries. Its banners include A Taste of Market Street, Amigos United, Market Street and United.