Commercial Baking February | Q1 2021 by AvantFoodMedia

ISSUE Q1 FEB 2021

ARTISAN BREAD

CATEGORY TRENDS

PEPSICO’S LAURA MAXWELL

www.commercialbaking.com

Inaugural Issue CLIF BAR & COMPANY THE BIG REVEAL

MARCH 2021 ISSUE 1

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OUR COMMUNITY Commercial Baking is published by Avant Food Media, 1625 Oak Street, Suite 201, Kansas City, MO 64108. Commercial Baking considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur. Consequently, readers using this information do so at their own risk. Commercial Baking is distributed with the understanding that the publisher is not liable for errors and omissions. Although persons and companies mentioned herein are believed to be reputable, neither Avant Food Media nor any of its employees accept any responsibility whatsoever for their activities. Commercial Baking magazine is printed in the USA and all rights are reserved. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission of the publisher. All contributed content and advertiser supplied information will be treated as unconditionally assigned for publication, copyright purposes and use in any publication or digital product and are subject to Commercial Baking’s right to edit. Commercial Baking magazine is published quarterly, along with two annual issues, in print and digital formats. Circulation is tightly controlled, and the print issues are sent free of charge only to hand-verified industry decision makers and influencers. To apply for a free subscription, please visit www.commercialbaking.com/magazine.

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IN THIS ISSUE

Features

Clif Bar & Company: Indianapolis’ Project Reveal In its second facility, Clif cranks out the bars during a massive building upgrade.

Laura Maxwell: The Influential Engineer

State of Foodservice: After The Hindsight

Emerging Market: The Artisan Effect

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IN THIS ISSUE

Departments

TRENDS Category Outlook: 59 Bread/Bun/Roll Category Outlook: 71 Cake 96

International Market

I N N OVAT I O N S Category Insight: 79 Bread/Bun/Roll Category Insight: Cake

Supplier Solutions

112

Ad Index

128

QUICK READS

112

Editor’s Note

Seen and Heard

Business Intel

103

Association Happenings

106

The Last Word

130

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A N OTE FR O M TH E ED ITO R

A Moment of Clarity

Like most of you, the pandemic stripped away nearly every element of what I, until that point, had believed to be “normal.” When our lives are pared down to the essentials, the quiet we are left with can be maddening. In this year of physical separation, I have spent a lot of time reflecting on my role in this industry I have come to love so much. Then, the opportunity arose to be part of Avant Food Media’s C ommercial Baking media group, and I found a new home. Today, a new vision for the future has emerged. Commercial Baking is designed to spark creativity and inspire new kinds of conversations ... and that starts with you, the bakers. The pages that follow will deliver a view of the industry through a whole new lens. Our content is based on real views of bakers, from the c-suite to the plant floor. Discover insights on production and dig into the current consumer and market trends. Then browse the most innovative solutions you’ll need to act on them. Most importantly, you’ll hear from bakers facing the same challenges you are. You’ll be reminded that as an industry, we may still be separated, but we are not alone. I am so proud to share this inaugural issue with you, and I look forward to heading into c ommercial baking’s future, together, on this all-new platform. Thanks for sharing the journey with us.

JOANIE SPENCER Editor-in-chief | joanie@avantfoodmedia.com FEBRUARY 2021 Q1

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AND “Consumers don’t care how many millions of pounds you produce; they only care about the product that’s sitting on their table.” Rod Radalia | VP of innovation | Aunt Millie’s Bakeries On the speed of changing consumer demand

“We cannot take 2020 as the baseline, nor 2019. We need to learn how to live with COVID while we make activities safer by bringing people together. New technology and innovation will be important, but we need to take advantage of the learnings and not go back to the old normal completely. We need to create a better balance and quality of life in the new normal.” Ramon Rivera | SVP, operations and supply chain | Bimbo Bakeries USA During BEMA’S C-Suite Roundtable

“Listen to your diverse consumers; listen to your diverse employees. They won’t lead you astray. When making diversity and equity pledges, be genuine and authentic. Don’t do it because you’re following a trend.” Ray Smith-Byrd | R&D cereal process engineer | General Mills | president of the National Society of Black Engineers for the Twin Cities Speaking on diversity in STEM during Pack EXPO Connects’ Workforce Development Jumpstart Session

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“There are opportunities to improve risk assessment practices in each company’s manufacturing process, and it’s a team effort to deliver successful results.” Karl Thorson | food safety and sanitation manager | General Mills During BEMA’s Sanitary Design Roundtable

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CHALLENGE ACCEPTED Clif Bar’s Project Reveal brings people and processing together … and proves anything is possible. BY J OAN I E S PEN C ER

Many assume that Clif Bar & Company’s first foray into self-manufacturing was at its facility in Twin Falls, ID. But that doesn’t necessarily tell the whole story. Technically, Indy came first. In 2016, around the time that Clif was constructing its first, sustainable and stunningly state-of-the-art, 300,000 sq-ft plant in Idaho, it also acquired 175,000 square feet of active co-manufacturing space from ConAgra in Indianapolis. The plant would undergo a transition to Clif’s trademark Five Aspirations — sustaining people, planet, community, brands and business. But in 2016, the focus was on designing the Twin Falls facility and starting up its first two lines concurrently with taking over in Indianapolis, where, operationally, not much changed other than who was signing the employees’ paychecks. “The fundamentals were on the floor,” said Dave Tintelnot, general manager of Clif Bar Baking Company of Indianapolis. “The process of how to make a bar was already in place.” This was a perfectly functional manufacturing plant for typical food production. But “good enough” isn’t good enough in the Clif culture, and there’s more to it than just making the product. “A copacker had always run the business here, so the business was first,” Tintelnot said. “We flipped the model and put people first.”

FEBRUARY 2021 Q1

That was the first summit to climb. During the first two years that Clif owned the facility, Tintelnot had been breaking down layers of culture and history while running the facility. Next, he was charged with leading the transformation of this former co-manufacturing facility into a Clif Bar site that was still uniquely Indy.

“We could ignore it, say they were wrong and just design the building how we thought it should be, or we could listen, make corrections and create a space everybody could own and love.” Dave Tintelnot | general manager | Clif Bar Baking Company of Indianapolis

It was a multi-faceted proposition: Understand the current culture of the workforce, bring them into the fold of the Five Aspirations, and then take what’s most important to them and use it as the basis for the building renovation. But it wasn’t just about making things more functional — though there was much to do in that department — it was also about creating a true representation of the people who work there every day. That’s the Clif Bar way.

F E AT U R E D B A K E R Y: C L I F B A R & C O M PA N Y

Photo courtesy of Kris Julius, Frederick | Julius Photography

Clif Bar’s Indianapolis facility has a grandstand that’s designed for company and community gatherings.

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Working with CSO Architects and DORIS, an Indianapolis-based design research firm, the company solicited feedback from more than half of the facility’s 400 employees to identify how exactly they needed the building to function. The result was a “challenger book,” 70 pages outlining exactly what the workforce needed from this land-locked building with compartmentalized office design. At first, that was a hard pill to swallow. “We had two choices,” Tintelnot said. “We could ignore it, say they were wrong and just design the building how we thought it should be, or we could listen, make corrections and create a space everybody could own and love.” Choosing the latter resulted in a total structural renovation with a 20,000 square-foot addition that doubled the office space. It also delivered almost everything the team envisioned, including functional locker rooms, a gym, a grandstand for employee and community gatherings, break areas easily accessible from the shop floor, and a safe and well-lit parking lot, not to mention the biophilic design Clif buildings are known for.

except the plant floor. Office staff worked in trailers, and the only working entrance was through a trailer adjacent to the warehouse fire exit. But that displacement serendipitously led to the project name: Reveal. “We called it ‘Project Reveal’ because we were tearing away the outside and revealing the Clif culture inside,” Tintelnot said.

Dave Tintelnot | Clif Bar Baking Company of Indianapolis

Getting to that big reveal took perseverance, and the work never stopped. “The message was, ‘We’ve got to make the bars; we just have to keep making them. We have this $10 million investment — it’s an investment in every employee here — but to justify it, we’ve got to get the bars out,’” Tintelnot said. He credits the will and the work ethic of the workforce, but Tintelnot was also

— Below The Indanapolis plant’s entrance was redesigned to become an inviting space that’s also safe.

Photo courtesy of Kris Julius, Frederick | Julius Photography

“I didn’t want a mediocre anything,” Tintelnot recalled. “I wanted a kick-ass everything. And if you compare the architect’s drawings to our actual space, it’s identical; that’s how closely we achieved the vision.” In what seemed like a marathon, construction of the building commenced around a fully functioning plant — o perating on two levels — that was still cranking out every flavor and variety pack of Clif Bars and Zbars. The operation continued throughout 2019, although the construction displaced everyone from every part of the building FEBRUARY 2021 Q1

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—Opposite, left Amid a total building overhaul, Clif’s Indy plant smashed production records. — Opposite, right COVID-19 didn’t stop progress, including equipment installations.

committed to communication through the process, reminding everyone there was, indeed, a light at the end of the tunnel. It was about keeping everyone updated and involved in the process, especially on what they identified in the challenger book. “We kept up monthly communication around all those pain points they had, to show that we were addressing them,” Tintelnot said. “That kept everyone engaged so when they were on the floor, they could focus. It’s a testament to the employees and a culture with an ownership mentality. Their job was to make bars, and they went out on the floor and made bars.” So many bars, in fact, that the Indy team smashed all Clif production records. October 2019 marked not only the building’s grand reopening but also the highest output of any month. By the end of the year, Indianapolis surpassed the previous annual record by a 5% year-over-year improvement. “Those increases in throughput came from making the operation more efficient, removing roadblocks, and focusing on top losses and fixing corrections,” Tintelnot said. That isn’t always easy in a two-story operation. Attention to detail at every point in the process is critical, especially at belt transfer points such as oven and cooling outfeeds or infeeds, conveyor turns, and inclines heading up to the packaging floor. These are the areas where buildup can create bottlenecks if the bars lose tracking on the belt and require downtime for more cleaning. Re-engineering and repositioning nose bars and using various belt types has increased efficiency

FEBRUARY 2021 Q1

for smooth transfers. Clif also worked with vendors such as KleenLine, a Promach brand, for transfer and connecting conveyors as well as equipment integration to keep all the parts working together from one floor to the next. And truly, Clif’s high standard for continuous improvement (CI) — despite having been in the manufacturing game for just five years — is its operational point of differentiation. This includes constant training to empirically show workers the losses that can result from variations. “We’ve taken Play Dough and cookie cutters to show the impact of weight variations and run ingredients through PVC pipes to demonstrate yield loss,” Tintelnot said.

“Our idea of OEE is that every minute of every hour of every day needs to be accounted for.” Jeb Sloan | engineer | Clif Bar & Company

Indy has a CI suggestion program that’s inspired ideas that have yielded cost savings of anywhere from $5,000 to several hundred thousand dollars. To meet equipment efficiency challenges, Clif Bar also developed a distinct overall equipment effectiveness (OEE) protocol. Developed as a self-reflection

Photo courtesy of Clif Bar & Company

Endurance is everything, and between the herculean p roduction effort during Project Reveal and an unwavering commitment to the Five Aspirations, Clif Bar Baking Company of Indianapolis was ready for anything … well, as ready as it could have been.

tool, it was initially used to measure Clif’s readiness for self- manufacturing. “Our idea of OEE is that every minute of every hour of every day needs to be accounted for,” said Jeb Sloan, Clif Bar engineer. That accountability has three components: availability, performance and quality. For Clif, the biggest OEE differentiator is the availability component because the model does not exclude downtime.

Three months after everyone settled into the new space, COVID-19 hit. Tintelnot jumped into action and formed a response team right away. In food manufacturing, flexibility is the key to efficiency, but in a pandemic, it’s the key to survival.

“I knew going into self-manufacturing that we were going to have a lot of changeovers,” Sloan said. “We use allergens, have a lot of sanitation and run several different SKUs. People look at OEE conventionally as, ‘Of your available runtime, how often were you running?’ But I wanted us to be accountable for the changeover process as well.”

“In the beginning, I probably spent 110% of my time focused on COVID,” Tintelnot said. “Keeping everyone safe was my No. 1 priority.”

In the bakery, OEE is used more as a self-reflection and m anagement tool, rather than a baseline measurement for o perators. On the floor, Sloan said, people should be focused on areas where they can impact the quality component rather than the OEE overall.

The response team still meets every week because, even after a year, regulations, recommendations and protocols can still change on a dime. And though there was no playbook in the early days of the pandemic, the wide-open spaces of the renovated building were conducive to the situation and easily lent themselves to social distancing.

“OEE isn’t something that should be on the shop floor,” Sloan said. “What we need are the components of it. You achieve that by focusing on the things you can control.”

Clif is known for high standards of food- and people-safety protocols, so on many levels, the bakery is about as safe a place as a person could be.

Ultimately, that led Indy to its record year. “It was no accident,” Sloan affirmed.

“We were early adopters of the camera-temperature system and the bio-mist sanitizing machines,” Tintelnot said. “Being at

COMMERCIAL BAKING

C L I F B A R & C O M PA N Y

the forefront of those was integral to the lack of spread in the bakery. This is the safest, cleanest place I could go, and I’m so proud of the work this team has done.” Keeping the people and plant safe enabled Clif to keep moving forward with production, and after five years, upgrades were inevitable, starting in the packaging area on the shop’s second floor. True to Clif form, Indy achieved the unthinkable and successfully completed the installation of three new Aagard case packing systems, one for each line, capable of packing anything that doesn’t go into a variety pack. “Prior to this project, we couldn’t run any faster than we were because the case packing set that pace,” Sloan said. Each mono-block line incorporates three individual equipment components into one operation; it forms, fills and closes the case, all in one piece. “It does it at a rate that removes the bottleneck and taps into about 10% more capacity,” Sloan said.

It takes some heavy lifting to successfully complete an installation during COVID, and for Clif, there was no other option. That said, it never could have happened without the pandemic response team’s strict protocols. “We chose to forge ahead with our projects,” Sloan attested. “It was a calculated decision. But in light of everything that had happened, we couldn’t just keep going; the work by Dave and his team, along with the safety group here, has allowed us to keep going. Our procedures and protocols meant we didn’t have to concede to COVID. We took it as a challenge, and the team stepped up.” With the case packing installation going smoothly, Clif moved forward to install Shick Esteve equipment on the first floor. Using a syrup only available in totes, Clif invested in a system to elevate the totes on lifts and dump the syrup into a pumping system that transports it to a buffer tank. From there, it’s pumped into one of six Peerless mixers to keep everything

moving at rates that keep pace with the increased capacity upstairs. Clif also installed a Shick AIM batch management system for hand-scaled ingredients until the bakery can fully automate its ingredient handling. Make no mistake, fulfilling nearly $10 million in total capital investments during a pandemic is a valiant effort that requires commitment from both sides. “There was definitely a customer service impact,” Tintelnot said. There were strict protocols around allowing outside vendors into the building, but with all parties on board, the system worked. “At the forefront of everything was not only keeping our people safe but also making sure that any person who walked through the front door — whether it’s a contractor or Clif Bar employee — was treated with their health and safety as a top priority,” Sloan said. At the finish line, Clif’s work goes far

FEBRUARY 2021 Q1

Photo courtesy of Kris Julius, Frederick | Julius Photography

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beyond manufacturing bars. In just a few years’ time, the company has embraced a former comanufacturing workforce into the Clif culture, created a workspace to foster an ownership mentality (including Clif’s Employee Stock Ownership Program available to all employees, in the office and on the plant floor), increased efficiency in production and became an active member of the Indianapolis community. “This space is the culmination of everything,” Tintelnot said. “It wouldn’t have been as great if we’d built it out in the beginning. It’s a representation of our culture — our diverse workforce, our community involvement and outreach — it’s all reflected in this building.” The building design — and everything inside — sustains people, planet, community, brands and business, in accordance with the Five Aspirations, from the minute a visitor approaches the front door. Inviting design with secure access lets visitors know they’re welcome while maintaining the safety required for a secure food plant. Design additions like a light fixture made from a Burmese canoe represent the ethnicity of its diverse workforce. Clif Bar never forgets where it came from or how it got to where it is now. That story — from its inception all the way to Project Reveal — is mapped out on the inner wall. Outside the building, a new parking lot not only provides smooth traffic flow for deliveries, workers and visitors but also provides safe, well-lit access for workers on all shifts for this bakery that runs 24/7. Ironically, ConAgra still operates its own business in a facility adjacent to Clif, so the parking lot was designed to function as a shared space for trucks and docks for both companies. To ensure a smooth transformation and to mitigate disruption, Clif invited a handful of ConAgra employees to be part of the planning team to have a voice in the process.

INNOVATIONS FROM THE PLANT FLOOR Before it makes any decision, Clif Bar & Company considers how it will impact the company’s Five Aspirations — sustaining people, planet, community, business and brands — on which it measures perforance. This includes decisions for capital expenditures as well. On the shop floor in Indianapolis, here’s a list of the key innovations that keep the bars cranking, oftentimes in record numbers. Aagard case packing systems Baker Perkins tunnel ovens KleenLine transfer and connecting conveyors Peerless horizontal mixers Schubert secondary packaging Shick Esteve AIM batch management and liquid systems Syntegon primary packaging —Below: The first major installation at Indy included three case packing lines to relieve bottlenecks.

“They were great partners,” Sloan said. “We just looked at them as part of the team. It doesn’t matter who’s paying your check … let’s just go on a ride together.”

“This city has been very proud of what we’ve done, and we might see more buildings like this in the future,” Tintelnot said. “It’s exciting to show what’s possible.” CB FEBRUARY 2021 Q1

Photo courtesy of Clif Bar & Company

In the end, Project Reveal has done just what the name intended: Revealed to the workforce, the community and the industry exactly what’s possible, even when the hurdles seem insurmountable. Like its sister plant in Twin Falls, Clif Bar Baking Company of Indianapolis stands to become a true influencer in manufacturing design.

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Photo courtesy of PepsiCo Foods North America

Laura Ma xwell | senior VP, supply chain | PepsiCo Foods North America

The Influential Engineer Laura Maxwell breaks down barriers to leadership, innovation and speed to market. BY J OA N I E S PEN C ER

“We have to follow the trends, and the most important thing we can do is break down the barriers that keep us from moving fast when those trends appear.” FEBRUARY 2021 Q1

Laura Maxwell, senior VP, supply chain for Plano, TX-based PepsiCo Foods North America, may have spent her career at the same company, but she’s had a hand in all facets of snack manufacturing from engineering work in Frito-Lay plants to holding executive positions in PepsiCo headquarters. Her involvement with PepsiCo’s growth agenda ranges from new product innovation and supply and asset planning to addressing retailers’ go-to-market strategies.

By doing so, Maxwell has unlocked keys to bridging the gap bwetween marketing and manufacturing in a time when change is the status quo and consumers are calling the shots. It’s been a long and winding road that brought several lessons along the way. In the beginning, leadership was not on this engineer’s radar. For Maxwell, technical and soft skills were mutually exclusive. “All I could think was, ‘I don’t want people reporting to me,’” she recalled. “I wanted my performance to be measured by my work.”

EXECUTIVE PROFILE: LAURA MA XWELL That mentality suited her first role as project engineer in a plant, but thanks to an early mentor, her mindset shifted.

“People often assume that professional development is all about promotions,” she said. “And while that’s true in some respect, I would argue that it’s also about leading something that you’re not an expert in because it develops different muscles, and it challenges you in an entirely different way.”

“He said, ‘I think you should try production supervision. Take on a team and see what you think.’ I did, and I loved it. I discovered I love working with people and the reward that comes with watching others get excited by their achievements. And I never looked back.” Maxwell learned quickly how to marry management and engineering through servant leadership in her first supervisor position on a Frito’s corn chips line. “I took the certification for processing operatives; I learned how to pack — though I could never do it as fast as the packers on the line — and I even did my best at moving the pallet jack around the warehouse,” she said. “I was determined to learn from people and show them I could do it.” That ingrained in Maxwell a love of the manufacturing process beyond the engineering scope, though that mindset has always driven efficiency for her teams. “Simplification in manufacturing and supply chain drives efficiency,” she said.

“There are roles where functional expertise is what carries the day,” she said. “But there are times that, when you take it away, all you’re left with is leadership. And in those times, your leadership skills develop like no other.”

However, simplification became rather complex when the marketing department came calling. In a bold move, the company’s CMO tapped Maxwell as a VP of marketing. She described it as a shot heard round the world when PepsiCo appointed a manufacturing engineer to lead a group in the marketing team. Traditionally, these two roles don’t play in the same sandbox, so what happens when you bring manufacturing into marketing … and then back again?

She offered a piece of executive advice: By leading in areas outside of your specialization, you can carry your proficiency into new frontiers. “For supply chain, especially in the food industry, we become known for our functional expertise,” she said, noting that stepping outside the comfort zone can sharpen skills that might otherwise lie dormant. This, Maxwell noted, often means learning from junior-level staff and charting unknown territory that can lead to personal and professional growth while benefitting the company at the same time. “There are roles where functional expertise is what carries the day,” she said. “But there are times that, when you take it away, all you’re left with is leadership. And in those times, your leadership skills develop like no other.” For Frito-Lay, this experiment created mindset shifts across the board. While marketing is generally known to think in terms of “new, better, faster,” the R&D and production sides often commit to achieving two of the three. But bringing a manufacturing expert into the marketing realm bridged that gap and opened new views to what’s possible for raising the bar in product development. When Maxwell made the move back to supply chain, she saw manufacturing through an entirely new lens.

The game changes.

“Now I see consumers are driving something that’s a greater need to the company in terms of growth,” she said. “I bring a consumer empathy into the role and have

On a personal note, Maxwell learned a lesson she believes all leaders should experience.

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EXECUTIVE PROFILE

Photo courtesy of PepsiCo Foods North America

(From lef t) Laura M a xwell; Steven Williams , CEO, PepsiC o Foods Nor th America ; and B rian M udd , site senior director at the Frito - Lay facilit y in Ir ving , T X .

gained a higher level of trust among the teams.” Back in the day, Frito-Lay was known for chips with a handful of flavors, which resulted in the scale and efficiency engineers so love. “In those days, we didn’t have as much complexity; we would run flavors for much longer and then put them on a truck, and we were on our way,” Maxwell recalled. In 2012, everything changed. The launch of Lay’s “Do Us a Flavor” campaign invited consumers into the world of p roduct development. Marketing and manufacturing came together in a whole new way.

FEBRUARY 2021 Q1

It was a genius marketing strategy, but it blew apart all previous conceptions about speed to market. “Think about it from the standpoint of the manufacturer and the one on the end-toend supply chain side,” Maxwell said. Where there once was a defined time to market, including product development and consumer and market testing, this campaign meant Frito-Lay had to manufacture much more quickly. “Everything we knew about timelines, handoffs — everything — had to be shattered,” Maxwell said. “We had to parallel 34

path everything, and the flavor houses had to do the same thing. I couldn’t tell you how many weeks we shaved off, but we shattered the timelines.” At that time, Frito-Lay had developed a campaign intended to disrupt how consumers interacted with the brand, and it disrupted how the supply chain would function … for this campaign and into the future. PepsiCo certainly could not have predicted how beneficial the change would be in the years to come. Today, people have been empowered to choose not only the types of snacks they

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want to eat but also when they want them to hit the shelves. “It used to be that, as the manufacturer, you largely designed the trends,” Maxwell said. “But the consumer is in charge now, and our role is to keep consumer-centricity core to all we do.” A combination of engineering and empathy has become integral to the process. “We’ve become more flexible to consumer needs this year more than ever,” Maxwell said. “COVID-19 has changed people’s habits in terms of how they use our product, and we have to be prepared to act quickly.”

“There’s a real opportunity here to help people understand that this industry is very exciting; it’s fastpaced, and it has a lot of problem solving through technology like automation and robotics.”

During the pandemic, snacking consumption skyrocketed, and it morphed in terms of product preferences and packaging types, depending on stages such as foodservice lockdowns and remote learning in the spring and fall. “All of a sudden, it became about big, multiserve offerings people can eat in their home,” Maxwell said. “But at some point, it will suddenly go back to being about portability and snacking on the go. These are the things we now recognize more easily. We have to follow the trends, and the most important thing we can do is break down the barriers that keep us from moving fast when those trends appear.” Breaking down barriers has become part of Maxwell’s functional expertise, whether it’s between manufacturing and marketing or consumers and the brand. And she’s also breaking down barriers to entry for young women to enter the engineering field and, more specifically, food manufacturing. For her, change must start with the leaders and managers whom students and young professionals see above them.

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“I always say that the No. 1 thing we can do to attract women and a diverse leadership group to the table is to make sure they see themselves,” she said. “That’s far and above any other action we can take, though I realize that doesn’t mean it will happen tomorrow.” The key, Maxwell noted, is communicating about STEM careers at an earlier age, such as high school or even middle school, and helping students make the connection between engineering and food production. “Last year, I was at one of our manufacturing sites talking with a group of female interns, and their biggest surprise was the amount of automation,” Maxwell said. “There’s a real opportunity here to help people understand that this industry is very exciting; it’s fast-paced, and

it has a lot of problem solving through technology like automation and robotics. There’s a lot we do that people just don’t know about.” Perhaps the pandemic has brought a bit of serendipity when a light was shed on the food supply chain and the people involved with it. “In a very odd way, the recognition of the role we play in delivering food has given us momentum to solve things, to make sure we meet the needs of consumers and, in some respect, the nation,” Maxwell said. Throughout her storied journey and her vast experience with the process, she has taken one thing to heart. “It’s a point of pride to be part of the supply chain.” CB

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CONSUMER TRENDS: S TAT E O F F O O D S E R V I C E

Following a Year of Hindsight Outlining the impact for some of commercial baking’s biggest customers BY J OA N I E S PEN C ER

Cabin fever and quarantine fatigue in the four th quar ter drew people out of their homes and back into bars and restaurants . Shor tly af ter, COVID -19 cases spiked , and foodser vice shutdowns and other limitations returned .

Lockdowns. Layoffs. Reopening at a quarter of capacity. Overhauling business models and menu offerings.

But that percentage is only a snapshot of the complicated havoc that COVID-19 wreaked on American foodservice operators.

Despite it all, many foodservice operators searched for new ways to keep foot traffic moving and their frontline workers safe.

The pandemic’s panic buying sent commercial baking’s retail business into hyper speed, but the foodservice side spiraled. According to the National Restaurant Association, the overall restaurant industry projected a $240 billion loss in sales for 2020, which translates to a 27% drop from the originally estimated $899 billion in sales.

In 2020, the industry went from freefall to rebound and then back into decline as it grappled with a range of challenges.

“We had to deal with quickly changing regulations — country by country, region by region — and they were all very different,” said Eric Kestenblatt, director of global bakery quality assurance for Lorton, VA-based Five Guys Enterprises LLC.

It was supposed to be a record year.

Weather changes either welcomed outdoor dining or shut it down, depending on the location, season or even week. Consumer cabin fever and quarantine fatigue led people back into bars and restaurants, which then t riggered more shutdowns and restrictions. 39

In one area, for instance, face masks were mandated; in another, they were merely suggested. And varying degrees of dinCOMMERCIAL BAKING

S TAT E O F F O O D S E R V I C E

able option to create new ways to stay afloat.

ing room occupancy rules became just as tenuous.

It’s true that some have faltered, especially full-service operators who don’t have carryout options or just can’t profitably operate at occupancy rates sometimes below 25%.

“Those types of changes were very challenging,” Kestenblatt said. “We’re a fresh and scratch business, so the constant changes would impact inventory and ordering of the produce, beef and buns. It created significant chaos.” Today, as we approach the one-year mark of the pandemic’s presence on US soil, a light is visible at the end of the tunnel … although right now, it’s just a dull flame. “Looking ahead at 2021, there’s not an immediate rebound to prosperity, not at the level of sales the industry posted in January and February of 2020,” said Hudson Riehle, senior VP of research for the National Restaurant Association. “The challenge of forecasting is that one really needs to know where the trough of the chasm is. From there, you can project going forward.” In terms of national economic growth and gross domestic product (GDP), while foodservice saw a relatively decent comeback mid-year, the overall GDP suggests the industry’s tangible rebound won’t fully be underway until the second half of 2021.

“The challenge of forecasting is that one really needs to know where the trough of the chasm is. From there, you can project going forward.” Hudson Riehle | senior VP of research | National Restaurant Association

“Moving forward, consumers will be more interested in supporting not only local foodservice establishments but also manufacturers that source more locally,” said Shelley Balanko, PhD., senior VP, the Hartman Group. It’s just a matter of getting people back into the restaurants, and although vaccines have become available in the US, there are still s afety c oncerns that will likely remain until the virus is eradicated. In November, the National Restaurant Association conducted a survey of 6,000 restaurant operators and 250 supply chain businesses. It revealed 17% of all eating and drinking establishments had temporarily or permanently closed in the fourth quarter, and 87% of full-service establishments reported a 36% drop in sales revenue and projected it to drop again in the winter.

“In other words, the first half of the year in terms of GDP growth and the consumer ability to spend, even with the integration of a vaccine, is still expected to be weaker than in the second half,” Riehle said. In August, Mintel’s prediction for a full recovery projected the year 2023 when the industry would see a rebound to pre- pandemic sales, and the recovery period is expected to last into 2025 because of recessionary effects further impeding consumers ability to dine out.

The “Blueprint for Revival” report, the N ational Restaurant Association’s rec ommendations submitted to House and Senate leaders in December, was integral to prioritizing foodservice workers for testing and vaccinations moving forward. This will help food and restaurant indus-

That doesn’t mean foodservice is completely without opportunity or that operators are not tapping into every availFEBRUARY 2021 Q1

But the pandemic has brought out the human element for restaurant workers’ safety and livelihood as well as the people who are responsible for getting the food to establishments in the first place. In many ways, it’s humanized food manufacturing and incentivized people to inject dollars into foodservice, especially on a local level. Many consumers know that supporting restaurants will provide jobs to the service industry and ultimately boost the economy.

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tries get back to growth and enable them to safely provide Americans with healthy food, a ccording to the association. In an industry with an average 5-6% profit margin, the effort of foodservice operators has been nothing short of extraordinary to enable consumers to safely eat on-premise. Balanko observed that peoples’ hesitation to eat onsite often does not come from restaurant protocols. In fact, in Hartman Group research, people reported feeling encouraged by foodservice safety measures; they’re just missing the overall experience. “They’re more fearful of other diners than they are the establishment itself,” B alanko said. As vaccines become more widely accessible, that fear could wane, and with those safety measures still in place for the first half of the year, it could lead to an uptick in business.

“Pre-pandemic, about 45% of all American adults reported they weren’t using restaurants as much as they would like to in their daily lifestyle,” Riehle said. That number reflects an elevation after the 2008 recession. “It went up and never really came back down to the levels before 2007.” During the pandemic, the National Restaurant Association reported that consumer pent-up demand reached 80% of all American adults. Although it’s going to take time, this hints t oward a bounce back. “Roughly 90% of all American adults enjoy going to restaurants; that certainly isn’t going to change in the long-term,” Riehle said. FEBRUARY 2021 Q1

Photo by Daria Shevtsova from Pexels

As things slowly creep back toward a semblance of normal, commercial bakers can expect incremental increases from their customers when consumers try to fulfill that untapped need, or as Riehle described it, “pent up” demand.

Although restaurant operators are master fully creating ways for consumers to order takeout, curbside and deliver y, the thing people are missing the most is the full experience that comes with dining out.

“The ability to understand and integrate not only traditional but also innovative new products in the years ahead is an important component of shifting food spending back toward the away-from-home solutions.” This spells opportunity for commercial baking companies. Experience is a big driver for consumers to eat out, but that need can’t be fulfilled during a lockdown or onsite at a quarter capacity. As a comfort food, baked goods 42

are a hallmark of the eating encounter, and that’s not only satisfying for a carryout indulgence during the winter, but it’s also a chance to enhance that onsite experience when the opportunity returns post-pandemic. That could come in the form of a decadent dessert, a cookie add-on to a QSR meal or even an incredible sandwich when the joy of cooking at home eventually loses its luster. There’s a long road ahead for foodser-

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87%

of full-service establishments reported a 36% drop in sales revenue. National Restaurant Association

vice, but technology advances help create change that will last in the long-term and even create more opportunity for operators and their bakery suppliers.

mphasis on off-premise dining will not e likely fade post-pandemic. “It was already a long-term trend, even pre-pandemic,” he said.

For example, Five Guys, whose model is built around on-premise dining, learned to make operational adjustments for convenient curbside and carryout and has conducted extensive tests for quality control to ensure a comparable eating experience at home vs. onsite.

In fact, Riehle noted that pre-COVID, nearly one in 20 orders was done digitally, and today it looks more like one in five. “That’s a huge jump,” he said. “And it has forced consumers to become much more familiar with how to navigate the restaurant industry from a technology standpoint.”

Before COVID-19, Five Guys ran that onsite operation with assembly-line efficiency.

According to Riehle, demographics are important factors in digital ordering. While younger consumers typically search for establishment by food type such as burers, sandwiches or sushi, older consumers search for companies or brands they know.

“When the pandemic hit, our orders were coming in from the phone, the web and delivery agents,” Kestenblatt said. “That drastically increased the c omplexity of our operation, but we very quickly shifted into that mode and did a great job with it.” Technology tools such as geofencing for curbside and carryout service will most likely have staying power for this global burger operator. Riehle also predicted that the current

“How people use technology to achieve a solution is different,” Riehle said. “And from the baking industry’s perspective — particularly over the upcoming decade with more r apid integration of t echnology — the ability to use that environment to promote and incent consumers to use baked goods is new territory.”

D uring the pandemic , consumer hesistation to dine onsite doesn’t t ypically come from concerns about the foodser vice operator. In fact, people are confident in restaurants’ food and people safet y practices . They ’re of ten more ner vous about other diners than the establishment itself.

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Specifically, he suggested yield management is a new horizon that s uppliers of baked goods should tap into for foodservice.

TRACKING THE FOODSERVICE COMEBACK

“This creates the ability to used baked goods as a nudge for consumers to use online ordering,” Riehle said. He also suggested that items such as muffins, cookies and other desserts make easy add-on incentives through yield management.

T O TA L S A L E S ( $ B I L L I O N S )

$800

This variable pricing strategy, often used for airline tickets and hotel reservations, is making its way into foodservice menu pricing by time of day or day of the week. And now, it’s evolving to generate demand through product p romotion as well.

$750

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$450 0 2015

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As a supplier of bread products to the foodservice industry, Baltimore-based H&S Bakery made several adjustments to accommodate customers who were still in business but unable to allow suppliers into their e stablishments.

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we’ve had the power to do that, and it’s been very helpful,” Paterakis said. On the road to recovery, it feels like “one step forward, two steps back.” Although the journey is slow, the return will come. “Looking toward the future of the industry, it certainly remains optimistic, but this current period of the pandemic and its lingering after-effects on consumer behavior is quite substantial,” Riehle advised. Photo by Clem Onojeghuo on Unsplash

H&S did a major overhaul to its proprietary web-based ordering system and offered flexibility on order minimums to reasonably meet foodservice customers where their biggest needs are. The company also launched a new website that is equipped with a marketing automation feature to identify targeted leads based on data from catalog downloads.

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2021

Source: Mintel ’s “ The COVID -19 Impact on Foodser vice: O peration Recover y ” repor t.

“The nursing homes and hospitals can’t see us,” said Shawn Paterakis, key accounts manager, H&S Bakery and Distribution. “We used to just walk right in, but we can’t do that anymore. So, we have to maintain those relationships and show our customers we’re still here for them and just a phone call away.”

This enables sales team members to c onnect directly with current and prospective customers. “It’s the first time

2020

O ne of the biggest challenges that foodser vice operators face is the abilit y to manage costs while operating at 25% capacit y.

“I don’t think anyone can doubt that the consumer has embraced using foodservice in their d aily lifestyle, and it’s very difficult for them to ratchet back long-term and revert back to at-home solutions.” Foodservice providers — and those bakeries who supply them — simply must stay the course. CB

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Capitalizing on the at-home baking movement for center-store growth BY M AG G I E G LI SA N

2020 was the year of baking bread. When COVID-19 put the world on lockdown, panicked consumers stocked up on flour and yeast and started kneading. As a result, baking staples saw exponential growth, with sales of baking yeast up 457%, baking powder up 178% and flour up 155%, over the previous year ending March 28, 2019, according to Nielsen data. Print sales for bread cookbooks in the United States also grew 145% for the nine months ending September 2020. And according to Kristen McLean, NPD book industry analyst, the at-home bread baking movement could have staying power. “Baking offered a comforting escape, and yeast suddenly became more difficult to find than toilet paper,” she said. “Sales of bread cookbooks are still well above 2019 levels, and given that the pandemic is still with us, the trend could be sticking around for a while.” Even if the popularity of at-home baking bread continues in a post-COVID world, signs indicate the increased interest in the bread category — particularly artisan and craft-style — could provide opportunities on grocery store shelves as well.

In a December 2020 episode of the American Bakers Association (ABA)’s Bake to the Future podcast, Robb MacKie, ABA president and CEO, interviewed Fred Penny, p resident, Horsham, PAbased Bimbo Bakeries USA (BBU). The discussion recapped 2020 and looked forward to 2021, and the conversation suggested that this is the year to build on consumers’ renewed appreciation for baked goods. Penny pointed to the change in consumer behavior as one reason for the lift in a c ategory that was previously struggling to grow. “The big shift to food consumed at home — as opposed to away from home — clearly has driven the category significantly. And one of the big questions we’re asking ourselves is, ‘How much of that shift is going to be s ustainable?’” But the growth in the bread category as a whole — coupled with other trends like the demand for clean labels and greater ethical and environmental transparency in foods and ingredients — indicate that consumer interest for artisan products in the grocery store could be an area for growth and innovation.

“The big shift to food consumed at home — as opposed to away from home — clearly has driven the category significantly. And one of the big questions we’re asking ourselves is, ‘How much of that shift is going to be sustainable?’” Fred Penny | president | Bimbo Bakeries USA

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E M ERGI NG MARKET: A RT ISA N “Transparency throughout the supply chain will dominate in 2021, with consumers searching for brands that can build trust, provide authentic and credible products and create shopper confidence in the current and post-COVID climate,” said Lu Ann Williams, director of insights and innovation at Innova Market Insights.

of shoppers are more likely to switch to a brand that provides in-depth product information.

Photo courtesy of La Brea Bakery

The International Dairy-Deli-Bakery Association’s What’s in Store 2020 supported that, indicating 75% of shoppers are more likely to switch to a brand that provides indepth product information, while 59% believe transparency means a “plain English” description of ingredients.

75%

International Dairy-Deli-Bakery Association In a September 2020 study commissioned by Ingredient Communications, most respondents expressed a preference for natural ingredients as well as a distaste for artificial additives. Eighty-one percent said they find a label that states it is “made with natural ingredients” very appealing or quite appealing, while 78% said they find a label that states it is “free from artificial ingredients” very appealing or quite appealing. Transparency has long been a hallmark for Los Angeles-based La Brea Bakery, which has been selling its artisan breads nationwide since 1998. “We know that consumers want to identify every ingredient on the label, and we deliver on that,” said Chris Prociv, VP of marketing and innovation, La Brea Bakery. The company saw a sales uptick in 2020, particularly in its Take & Bake portfolio. And Nielsen data shows that the artisan bread take-and-bake category is up almost 40% against a year ago, as compared to pre-COVID when the category was growing at a rate of 7%. “Consumers are realizing that take and bake is the next best thing to homemade,” Prociv said. “When they want bread, they want that sensory experience, even if they don’t have the time to make it themselves.”

FEBRUARY 2021 Q1

The artisan bread take-and-bake category is up significantly, and in 2020, La Brea Bakery saw an uptick in its Take & Bake portfolio.

In October 2020, Rustik Oven expanded its artisan bread line nationwide. The bread — available in Sourdough, Artisan White, and Hearty Grains & Seeds — is made using a traditional European baking process and is Non-GMO Project verified and made without artificial colors or flavors. Other large commercial baking companies have expanded into the artisan space as well. “For so long, we heard our consumers’ feedback over the struggle of choosing between the superior quality of bread from their favorite local bakery and the longer shelf life and convenience of bread from a grocery store,” said Jessica Grane, marketing director, premium and artisan breads at BBU. “Thanks to our signature baking process, we’re proud to bring this unique offering to the artisan bread category and offer our fans the taste that they love in a more convenient way.” Trend reports suggesting an increased demand for products that promote immunity

— no doubt sparked by the pandemic — and overall health could be another factor driving consumers to purchase artisan. According to Innova’s Top Ten Trends for 2021, six in 10 global consumers are increasingly looking for food and beverage products that support their immune health. And an October 2020 study by FMCG Gurus showed that 64% of consumers are more interested in ingredients or food and drink products that provide protective or preventative health benefits. Studies have shown that the slow-fermented bread could be easier to digest and contribute positively to the microbiome and overall gut health. “I think there’s an opportunity, especially with sourdough, to lean into the nutritional advantages that artisan bread can provide,” Prociv said. A simple, clean ingredient list could also be reframed and communicated more clearly to consumers. “At the end of the day, bread is flour, water, yeast and salt,” said

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E M ERGI NG MARKET: A RT ISA N Charles Negaro, Jr., CEO of New Haven, CT-based Chabaso Bakery, a family-owned commercial bakery that has been selling ciabattas and other artisan breads for more than 30 years. “I see an opportunity for increased storytelling in the bakery aisle and for better educating consumers on what they’re eating and how it contributes to their overall health.” When promoting the benefits of commercially produced bread, Penny suggested that it’s important to craft the message holistically, rather than honing in on just one small piece.

Regardless of the trend factors and supporting data that suggest now is the time to dip into artisan, there are certainly inherent production challenges — namely, time, resources and cost — to baking this style on a commercial scale. For Negaro, one thing is universally true when it comes to true artisan bread baking: There are no shortcuts. “Flavor and texture take time. At Chabaso, our bread fermentation process takes 20 hours or more. We have equipment that allows us to form the dough on a large scale, but we still do much of the work by hand. We never want to lose that quality of a neighborhood bakery.”

Photo courtesy of Chabaso Bakery

“I think it’s ensuring the messaging about a balanced diet and ensuring the messaging about the fact that the products we provide can fit into a healthy lifestyle,” he told MacKie on the podcast. “I think that’s part of it. I’m not so sure specific claims necessarily are going to be the end-all answer. I also don’t think we can forget about the fact that consumers are still interested in sustainability, food waste, etc., and as an industry we need to be all over that. We’ve got to continue to work on all elements of the areas of responsibility that we have as an industry. Nutrition is certainly one of them, but it’s not the only one.”

Chabaso Bakery is jumping on opportunities for the storytelling around the health benefits of artisan bread.

80%

of consumers reported that taste was the top factor in deciding whether to try a new food trend. Kearney Food Trends Survey

The same is true for La Brea Bakery, in that quality is never sacrificed for the sake of

FEBRUARY 2021 Q1

E M ERGI NG MARKET: A RT ISA N cost savings. “The craft of artisan is inherently a long process, and it’s a labor of love that’s baked into every loaf,” Prociv said. “But we’ve never wavered in ensuring we take the time to create a premium product. We always want to deliver the best, and you can’t skimp on the details if you want that rustic golden crust and moist, chewy interior.” And taste reigns in terms of consumer buying behaviors. According to a 2020 Kearney Food Trends Survey, 80% of consumers reported that taste was the top factor in deciding whether to try a new food trend, followed by price (61%) and health (55%). “I believe we’re going to have a demand for things that just taste better,” Negaro said. “We have people who have tried better- tasting bread in the past 12 months, and they don’t want to go back. But they want that high-quality product in a way that’s easily accessible.”

“I see an opportunity for increased storytelling in the bakery aisle and for better educating consumers on what they’re eating and how it contributes to their overall health.” Charles Negaro, Jr. | president | Chabaso Bakery

Whether those consumers who picked up quarantine bread baking will abandon their sourdough starters altogether is yet to be

Photo courtesy of La Brea Bakery

There are many implications with producing artisan bread on a commercial scale, including the time it takes to create bread that becomes a multi-sensory experience.

FEBRUARY 2021 Q1

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E M ERGI NG MARKET: A RT ISA N determined. But in an October 2020 ABA webinar, Todd Hale, principal, Todd Hale, LLC, emphasized the staying power of the home-baking trend and encouraged companies to find new ways to reach consumers, suggesting these new home-based behaviors will continue. “The at-home demand is still there,” he said. “I urge you to think about how to keep it going as away-from-home still struggles.”

Photo courtesy of Lachlan Ross from Pexels

That said, more consumers may venture back out in the coming months as vaccines proliferate and quarantines lift. Then baking companies can seize new opportunities to capitalize on the awareness of — and demand for — artisan breads as they take the spotlight in the center aisle. CB There are no guarantees on how long the homebaking trend will last, but commercial bakeries can deliver products that have the same — and likely better — qualities as bread made at home.

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It’s long been referred to as a staple of life, but in 2020, bread added new meaning to the old adage. As consumers came face-to-face with the unbelievable nature of a global pandemic and a range of associated unknowns, they demanded the basics ... with bread returning off-the-charts results thanks to the 24/7 efforts of commercial bakeries throughout the world.

$37B The bakery department recorded $37 billion in current dollar sales. Source: IRI

Supply and Demand Perimeter Dollar Share

TORTILLAS/WRAPS/ FLATBREADS: 7. 3 3 %

ENGLISH MUFFINS: 8.41%

BAGELS/BIALYS: 13.66% BREADS: 44.36%

BUNS/ROLLS: 2 6 .1 6 %

** Variance: 0.08 Total US - Multi Outlet w/ C-Store (Grocery, Drug, Mass Market, Convenience, Military and Select Club & Dollar Retailers) Latest 52 Weeks Ending Dec. 27, 2020

Practically overnight, calls for bread reached unprecedented highs, culminating in an 11.8% increase in dollar growth during 2020, a 4.2% change vs. 2019. Sales in the bakery department reached $37 billion, a 5.2% positive gain over 2019 and $1.7 billion in absolute dollar gains, according to the new report, IRI Total vs. Integrated Fresh, powered in partnership with IDDBA. Lockdowns and primal behaviors triggered by fears of an unknown virus found people turning away from the perimeter and returning in droves to the shelf-stable safety of the center store, creating unbelievable demand for a variety of bread items. Chicago-based IRI recorded dollar sales growth of center-store buns/rolls at 16.4% and center-store bread at 9.9%.

COMMERCIAL BAKING

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Plotting a New Course As consumers navigated the new normal of work- and school-fromhome mandates, households of all sizes quickly recognized they would now need to produce meals, including snacks, throughout the day, as most dining-out options became largely unavailable.

4.2% The bakery department saw a 4.2% increase vs. a year ago.

Center Store Dollar Share

ENGLISH MUFFINS: 5.0%

TORTILLAS/WRAPS/ FLATBREADS: 1.43%

BAGELS/BIALYS: 7. 3 9 %

BREADS: 56.89% BUNS/ROLLS: 28.24%

Source: IRI

In response, some took up the challenge to learn or revive cooking and baking skills. For others, the stress of the unknown and increased home-bound time left little energy to create from-scratch options for every meal. Even food-centric social media saw a shift away from aspirational and d estination-fueled food pics to more sedate and wholesome snaps of pantry-inspired and tried-and-true family favorites. In hopes of minimizing extraneous decision-making, many consumers also chose to stick with a dedicated shopping list and a commitment to less-frequent store trips, but this diligence quickly culminated in meal planning fatigue. The revival of the sandwich and a variety of accompanying bread products came to the rescue with breads and buns/rolls leading center-store growth. IRI also cited growing appreciation for the versatility of tortillas/wraps/flatbreads, which are FEBRUARY 2021 Q1

** Variance: 1.05 Source: IRI Total US - Multi Outlet w/ C-Store (Grocery, Drug, Mass Market, Convenience, Military and Select Club & Dollar Retailers) Latest 52 Weeks Ending Dec. 27, 2020

Bread products and buns/rolls lead center store growth with an increased appreciation for the versatility of tortillas/wraps/flatbreads for multiple dayparts and snacking.

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in use during multiple dayparts as well as for snacking, with a 13.2% change vs. a year ago.

One bright spot in the perimeter was bread at a 6.5% increase in dollar sales as consumers looked for fresh and par-baked organic, artisan and craft-inspired breads.

In its two-part 2020 Food Study Special Report, Hunter Integrated Marketing & PR compared consumer responses at the height of the pandemic to nine months later in December. In both reports, Hunter found many consumers used the same brands and products they always have. This found 71% reporting the use of the same brands and products in April 2020 and slightly fewer — 65% — in December. Discovery of new brands and products rose 7% between April (45%) and December (52%), and rediscovery of products registered a mere 1% difference, toggling between 15% in April and 16% in December. Lower sales of private label bakery products, as recorded by IRI, also speak to the preference for beloved brands.

Perimeter Bakery Dollar Sales ($ in billions)

Perimeter Woes

$2.5

Away from the buzz around the center aisles’ empty shelves, the perimeter of the store told a slightly different story. Throughout 2020, the in-store bakery saw an overall dollar sales increase, but growth for in-store buns/rolls just didn’t happen like it did in the center store. However, one bright spot in the perimeter was bread at a 6.5% increase in dollar sales as consumers looked for fresh and par-baked organic, artisan and craft-inspired breads to add an element of special to the mundane.

$2.0

$1.5

$1.0

$0.5

$0.0 BREAD

BUNS/ROLLS

BAGELS/ BIALYS

TORTILLAS/WRAPS/ FLATBREADS

Source: IRI Total US - Multi Outlet w/ C-Store (Grocery, Drug, Mass Market, Convenience, Military and Select Club & Dollar Retailers) Latest 52 Weeks Ending Dec. 27, 2020

FEBRUARY 2021 Q1

Buns/rolls saw a decrease of 3.7% and declines in average items per store as many bakeries made the difficult decision to eliminate bulk grab-and-go items in the perimeter.

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Faced with conflicting messages and the unknowns of how the virus could spread, the perimeter experienced overall losses as a result of mandated department closures, reduced bakery staff, and fewer — and smaller — gatherings and celebrations. As consumers drastically reduced time spent in the grocery store and kept to the familiar center aisles, browsing the

13.81 B

Bakery innovation focused around nutrition and health could be a successful differentiating point throughout 2021.

Bakery department unit sales: a -3.3% drop from a year ago. Source: IRI

perimeter bakery for freshly baked breads became a risk many shoppers chose to avoid. Time spent inside the store was instead largely characterized by stock-ups of shelf-stable and frozen items, while many people opted to stay out of the store altogether with click-and-collect online shopping and home delivery options. Still working and schooling at home, consumers are generating new demands when it comes to size count and packaging for baked goods. IRI saw large velocity increases among center-store bread and buns/rolls driven by more consumers who were spending more per trip. New shopping habits are also giving rise to stock-up buying as people make use of the freezer or an additional refrigerator while making fewer trips to the store, according to Tim Grzebinski, IRI principal, client insights for dairy and bakery.

FEBRUARY 2021 Q1

2021 Forecast Predicting those 2020 numbers will eventually come back down to earth, IRI recommended bakers and their brands seek new ways to capture consumer attention. Mealtime fatigue and the monotony of at-home cooking will take a toll on consumers, and Grzebinski suggested looking for opportunities to provide them with ideas around meal solutions and convenience. This could include tapping into the growing desire for restaurant- and foodservice-inspired eating at home with gourmet, artisan and premium offerings, according to Mintel. Healthand-wellness and better-for-you options will maintain momentum as consumers look for new ways to boost immunity. In pre-COVID environments and throughout 2020, natural claims,

Actual size.

Actual effect.

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THE FRESH FACTOR Breaking Down Freshness

For consumers, there’s no topping freshness. In fact, it’s the No. 1 quality they consider when purchasing a baked good. Twenty-eight percent of consumers check freshness and price before buying packaged sandwiched bread, and 81 percent expect it to last one to two weeks after purchase, according to Corbion research. “If a product doesn’t seem fresh, it will likely be perceived as lower quality, and that trumps other purchasing factors like price and convenience,” said Kathy Sargent, Corbion, Director of Global Market Strategy.

What makes a baked good fresh? Consumers use more than just their tastes buds to answer that question. While a variety of factors — taste, smell, appearance, how and where it’s made — contribute to a baked good being perceived as fresh, texture is paramount.

Is the product too crispy or not crunchy enough? Is it light and moist or dry with an off flavor? Is the frosting or icing cracked or perfectly creamy? The answers to these questions determine whether a consumer views the product as fresh and whether it will be purchased again. Corbion research shows that 62 percent of consumers check appearance, texture or softness when evaluating the freshness of baked goods. “People sometimes underestimate just how significant texture is in shaping a consumer’s perception of a finished application,” said JoAnn Rupp, global market insights manager. “Even minor texture changes can have an impact on the overall experience of a meal.” Texture is shaped by a variety of factors including ingredient quality, climatic conditions, moisture content and the interaction of ingredients. These play a part in the resilience, tenderness and structure of a baked good. Consumers are looking for unique products that feel, look and taste authentic, such as artisanal baked goods. And texture is often one of the top reasons they choose artisanal, which often combine contrasting textures, like blending a crispy or crunchy component with a soft, fluffy crumb structure. What’s more, consumers desire products with cleaner

Freshness is top of mind for consumers when selecting premium bread and roll products.

labels that are free from overly processed ingredients. Now bakers must formulate for freshness, texture and health. Despite the complexity of this challenge, there is good news: Corbion solutions provide all three qualities to breads, buns, tortillas, cakes, muffins, donuts and more.