For baked goods manufacturers, keeping up with consumer preferences and lifestyle changes is rarely simple. Bakeries must examine new trends from financial, operational and sales perspectives and then decide how to implement them.
The first task? Identify whether the trend is something the manufacturer can respond to with specialty products that complement what they already do.
And that comes down to finding ways to satisfy that growing demand without busting the budget. Start by capitalizing on relationships with suppliers, tweaking the manufacturing process where possible, offering a more artisanal product that doesn’t require a hefty investment in new equipment—and promoting the new products to customers (and their customers).
“If you can be among the first to recognize that something can provide a strong return, it gives your retail partners that much more confidence that you’re on top of things,” says Jeff Grogg, founder and managing director of food and beverage consultancy JPG Resources.
Collaborating With Bakery Suppliers
Ingredient suppliers can be a valuable source of information for bakeries that lack a dedicated research and development department, according to Randy Ross, owner and founder of Ross Food, a bakery sales and marketing consultancy in Montgomery, Alabama.
“Pushing research and development back to ingredient suppliers becomes an important part of their partnership,” Ross says. “Major ingredient suppliers have the resources to generate what the major market trends are. Bakers are also listening to market demand and developing their own products; there’s a lot of collaboration.”
Evaluating Bakery Manufacturing Capabilities
Some trends—such as interest in health-minded foods, including ingredient-restricted items geared toward people who follow a paleo, grain-free or other special diet—may prove difficult for bakeries with older facilities, according to Grogg, who also serves as president of Snackwerks of Michigan, a year-old manufacturer located in Battle Creek, that makes grain-free, high-protein and other baked goods for a variety of businesses.
“We had the luxury of building from the ground up, so, by design, we’re able to do a line of gluten-free cookies one day, and granola the next,” Grogg says. “Managing allergens is a big hurdle to overcome. A lot of bakeries don’t want nuts in their plant or don’t want to worry about wheat use all the time. If you cross that hurdle, you’re faced with another significant one—you have to have different ingredient technologies and equipment.”
While some larger bakeries may have the resources to configure space for specialty item production, smaller ones are less likely to, according to Ross. “Introducing a new product into a bakery is a big deal,” he says. “Plant machinery, in some cases, has a 20- to 25-year lifetime; it’s not like bakers are changing out equipment every year.
Capital Investment-Free Options for Bakeries
Manufacturers can still capitalize on consumer trends without overhauling their facilities. Rather than developing new products from the ground up, bakeries can leverage existing offerings.
To address the health trend, for example, some manufacturers are “using sprouted grains, multigrain, whole wheat, soaked grains—products that relate to adding ingredients into the process—or using ingredients to differentiate their product, such as pumpkin, spices, fruits and seeds,” Ross explains.
Another trend proving fruitful for bakeries is consumers’ increased interest in (and willingness to pay a premium for) artisanal items.
“Moving to a bit more upscale product is often a great way to go,” Grogg says.
Stressing locally sourced ingredients can also pique retail customers’ interest, according to Noah Munro, founder of food business consulting firm Taste Profit Consulting and co-owner of The Mill Fudge Factory, which sells fudge to retailers in the Northeast.
“It’s difficult to have 100 percent local baked goods because it’s hard to get local sugar and cocoa. But that doesn't mean you can’t take advantage of the local trend,” Munro says, “We use local honey in all our fudge; when marketing our brand, that’s part of the story.”
Mining Retail Bakery Customers’ Mindsets
In addition to suppliers, customers can be a source for ideas—provided bakery manufacturers ensure their interactions with these businesses amount to more than pushing products.
“Good salespeople ask good questions, instead of just showing up and saying, ‘Here’s what we have; what do you want to buy?’” Grogg explains. “It’s about having a dialogue with the retailer or foodservice operator and asking, ‘What else can we do for you? What would you really like to see?’”
Getting in front of retailers’ customers can also help inform product development decisions, Munro adds.
“In-store demos give you a chance to build a relationship with consumers,” he explains. “You’ve got to commit to knowing what the end consumer likes and doesn’t like—and by going to the store, you’re also keeping the product top of mind among the retail managers, department heads or other staff.”
Lastly, having proprietary market information to share with your customers and use to create products they may not know they need, can mean the difference between maintaining a lucrative contract and losing it to a competitor.
“It positions a manufacturer very well, if you can take what stores want to them before they ask for it,” Grogg says. “If they put out a request for proposal, you’re competing against a whole bunch of other companies, and it becomes a price battle—that’s tougher. Frankly, you’re at risk if you’re not keeping up with consumer trends."