A 2016 survey by Q1 Consulting found that 16% of respondents listed in-store bakery as the primary reason for their last c-store visit. Moreover, 85% found bakery items to be the most portable grab-and-go foods at c-stores.
“Portability is critical for all grab-and-go foods in c-stores and especially for bakery items that are usually eaten on the go,” said Tim Powell, vice president and senior analyst for Q1 Consulting.
In the survey, c-store consumers said the cues that they found most interesting are “made-in-store” and “fresh,” Powell noted.
“Fresh is an abstract term, but when a baked good is not prepackaged and there is an appearance that the item was baked in-store—like Subway’s breads—consumers will be more likely to try the product,” Powell explained.
Retailers are responding by expanding their in-store bakery sections based on consumer demands—a trend expected to rise in 2017.
Wesco Convenience Stores, for example, found its ‘Sweet Spot.’ When customers recently told the Muskegon, Mich.-based c-store chain they wanted smaller-portion bakery products at lower prices, the company introduced two-for-99-cent 1.25-ounce packaged cookies under the Sweet Spot brand name. Currently, there are four varieties of cookies that carry the Sweet Spot label.
“Our marketing department created some great labels to sell the Sweet Spot products and they definitely caught the attention of our shoppers,” said Kimberley Loniecki, Wesco’s director of foodservice. “The packaging is relatively inexpensive so we have been able to maintain our margins.”
To further meet customers’ request for smaller portions, Wesco took one of its most popular items—a chocolate-enrobed no-bake cookie—and adapted it into a size that is “a little larger than a quarter, but smaller than a half-dollar,” said Bill Yandian, supervisor of the company’s 16,000-square-foot production plant.
Yandian said the total volume of bakery items he produces increased by double digits in the past year. While most of the growth is from fresh-case items, sales of packaged bakery products also increased. One top seller in the packaged division is a 12-ounce dome-lidded cup filled with the stores’ signature no-bake cookies.
The commissary services 35 of the total 52 Wesco stores. Two Wesco stores with on-site bakeries service the rest.
The stores also sell an average of 20,000 doughnuts per day as well as muffins, brownies and full-size (3.5-4-ounce) cookies.
Last year, Wesco started offering mini cake doughnuts in concession-size packs containing 20 doughnuts each for resale at schools and fundraisers. Initial response was lukewarm, but when the company merchandised the same vanilla cake doughnuts with Halloween-themed toppings in October, they flew off of the shelves, puffing up sales, Yandian explained.
“We thought we would sell about 100 or 150 cases in October, but instead we sold 1,500 cases,” Yandian said. “We did the same thing for Christmas and our results were just as solid.”
Retailers that rely on bakery to boost profits must also face stricter federal guidelines. For example, under new rules from the U.S. Food and Drug Administration, bakers have until June 2018 to reformulate bakery products without partially hydrogenated oils (phos). That means 2017 will be a pivotal year for the transition to non-pho shortenings and oils.