The success of the in-store bakery is affecting sales in the baking needs aisle.The good news is that the baking aisle remains a big category at supermarkets, and consumers continue to use the grocery store as the prime source for any baking needs.
The bad news is that this is a mature category and growth is hard to find. Many industry observers say this has been caused by changing consumer lifestyles and the willingness by many shoppers to simply purchase pre-made bakery products from the in-store bakery.
Still, the baking aisle remains an intense battlefield among several very large players, most notably, General Mills and Pinnacle Brands, with Smuckers gaining more traction in the market.
Retailers, meanwhile, have been hesitant to give the section additional space in their stores. In an informal poll, more than 50% of merchants say they are either happy with the size of the baking needs section or are looking to decrease space for the category. Less than 10% of retailers surveyed say they are looking to find more room for the category. “It is just not on our radar right now for growth,” says one retailer. “There are too many other categories that are more important right now. But we still view this as a significant part of our business.”
A number of retailers add that they are looking at new products and brands to perhaps light a spark for the segment. Meanwhile, consumers have not shown much interest in the private label side of the market either.