Consumers view the purchase of sweet goods such as doughnuts, muffins, pastries, Danish, etc. as an opportunity to treat themselves. In spite of labor challenges, a heightened awareness of consumers’ food spending, and the need to continue to bring variety and new items for consumers to choose from, the sweet goods category fared fairly well.

Market data

The sweet goods category comprises doughnuts, muffins, pastries, sweet rolls, Danish, coffee/crumb cakes, Hispanic pastries, and more. The majority of the categories saw year over year dollar sales growth; in looking closer, most of the growth was driven by higher price per unit. The exceptions were Hispanic pastries, which grew both dollar and unit sales both at center of the store and in the perimeter. Perimeter sweet rolls also realized dollar and unit sales growth.

Center store doughnuts grew 4.2%, resulting in $1.9 billion in dollar sales (based on the latest 52-week period ending April 21, 2024, from multi-outlet with c-store data from Circana (Circana OmniMarket Integrated Fresh). Full-size doughnuts account for over 97% of the category and grew 3%, leading to $1.8 billion. Leaders within the category include J.M. Smucker (parent company of Hostess) growing 3.6% to $695.6 million; Grupo Bimbo, up 1.0% to $449.1 million; and McKee Foods, increasing dollars sales 1.8% to $299.8 million.

Perimeter doughnuts grew a strong 8% to $1.9 billion with perimeter full-size doughnuts increasing 6.1% to $1 billion. Private label, which represents over two thirds of the full-size doughnut category, saw growth of 7.2% resulting in $729 million. JAB Holding (parent company of Krispy Kreme) increased 8.5% to $197.3 million.

The total center store pastry/Danish/coffee cakes category grew 6%, resulting in $1.4 billion. The largest sub-category, center store sweet rolls, accounted for 55% of the overall category; it increased a strong 9.3%, leading to $787.8 million in dollar sales. The biggest contributors to the growth were McKee Foods, which was up 17.6% to $417.5 million; Flowers Foods, which increased 4.8% to $79.2 million; and private label, which accounted for a strong 21.9% growth, resulting in $70.2 million.

The perimeter total pastry/Danish/coffee cakes category also saw growth of 2.6%, resulting in $1.9 billion. Perimeter sweet rolls grew an impressive 9.1% to $513.9 million. Private label, which accounts for over half of the dollar sales in that category, grew 4.5% to $293.1 million. Other top performers in this category were J.M. Smucker, which grew an outstanding 111.6% to $80.8 million, and Flowers Foods grew 2.1% to $41.2 million.

Looking back

According to data shared by Bill Heiler, senior manager, customer marketing, Rich Products, “Fresh bakery is faring relatively well despite shoppers keeping a close eye on their food spend. Bright spots are everyday consumption categories like bread, rolls, sweet goods, cookies, and grab-and-go portion desserts that are benefitting from more at-home meal occasions.”

Sweet goods are a unique category because they lie somewhere in between every day and special occasion, notes Heiler. To be successful in the category, “There are two elements of sweet goods that we focus on. One, providing both value and elevated options, and two, leveraging seasonal and limited-time offerings to drive traffic and keep categories interesting. When it comes to fresh dollar share, traditional grocery continues to lose to mass retailers and supercenters on the value end, as well as specialty/independent markets for premium baked goods, suggesting consumers are trading down and splurging selectively. Within several of our sweet goods categories, we offer customers the choice of various quality tiers to optimize their assortment, depending on how they want to differentiate themselves in the market.”

Seasonal flavors and colors also provide a key opportunity to drive demand and we’re seeing an increase in customer requests for fun, on-trend solutions, notes Heiler.

“Today, it seems as though every day is National Something Day, so Rich’s developed a calendar of events that fresh bakeries can leverage to build eye-catching displays,” he reports. “It’s not enough to just have the flavors and colors. To stop shoppers in their tracks, bakeries must have an engaging point of sale to promote seasonal and limited time offerings. Additionally, there are exciting new ways to engage in partnerships, retail media networks, targeted social media campaigns and influencer relations. Using all these tactics in a coordinated way helps maximize the incremental lift of seasonal items.”

One of the key challenges bakeries faced this past year was labor. “With significant labor shortages and rising labor costs, bakeries had to find business solutions to maintain consumer satisfaction without sacrificing employees and safety,” explains Raoul Dexters, country commercial manager USA, Vandemoortele USA. Add to that as consumers are becoming more aware of the products that are available to them (i.e., different flavors, different ingredients, etc.), product variety has become a requirement for successfully satisfying consumers.

Dexters explains that providing variety can be challenging especially in a time of labor shortages and rising costs.

“Within the last year, we’ve seen more retailers asking for pastry versatility, from offering more flavors of standard products, like a filled croissant, to offering completely new products,” Dexters points out. “While retailers are looking to expand their product line, they’re unable to increase the labor needs or training requirements associated with fresh, new sweet goods.”

Vandemoortele has seen success with its Bake’Up line, as it provides a variety of products with freezer-to-oven ease to reduce labor concerns. Launched last year under its flagship Banquet d’Or brand, the pinched croissant was created in response to retailers seeking a customizable and versatile carrier that didn’t lack in taste and quality. “Made with the same authentic French recipe as our best-selling butter croissants already in the market, the pinched croissant’s quality is trusted and has become a customer favorite. Additionally, as part of our Bake’Up line, this croissant uses our patented technology for ease of baking, removing the need for proofing, defrosting, or glazing to eliminate the labor typically associated with fresh pastry,” explains Dexters.

Technology transformation is the global trend that has presented challenges and opportunities for bakeries according to Cathy Wisloski, manager insights and customer experience, Dawn Foods.

“Technology continues to transform the consumer eating experience, impacting how we choose, purchase, and take delivery of our favorite foods,” Wisloski declares. “Online ordering and delivery are here to stay, with more than half of consumers reporting that they have ordered groceries online. While this is a convenience for the shopper, that means less foot traffic and fewer impulse purchases in the bakery. To overcome this challenge and grow the category online and in-store retailers are using best-in-class search keywords and sponsored ads in delivery platforms to keep the bakery top of mind with online shoppers.”

Sweet goods had a successful year, because consumers continued to treat themselves daily. “As identified in the Dawn Foods Global Trends report, consumers believe that enjoying something sweet every day is an essential part of a balanced lifestyle. These Daily Delights make consumers feel rewarded, indulged, and comforted, but food costs can force them to make tradeoffs,” shares Wisloski.

According to Wisloski, everything old is new again. Retro, nostalgia, and newstalgia is something consumers are looking for in sweet goods.

“Nostalgia is only natural, as stressed consumers seek comfort, familiarity, and simplicity of past times,” she says. “Last year, Dawn’s Global Trends identified how many of today’s consumers crave traditional bakery favorites, with a twist. 83% of consumers like sweet baked goods that remind them of their childhood, and 75% enjoy sweet baked goods that put a spin on a classic item. Bakeries can showcase nostalgic flavors, decorations, and packaging that connects emotionally with shoppers, giving them something fresh to discover for their daily delight.”

Products that offer versatility in the bakery and deliver on-trend flavors for shoppers are noteworthy. Dawn Foods provides crème cake mixes, bases, and concentrates which can make cookies, muffins, bundt cakes, loaf cakes, crumb cakes, and more. Similarly, it can create sweet and savory recipe versions from the same dough base to appeal to shoppers’ diverse tastes.

Looking forward

All the industry experts Snack Food & Wholesale Bakery connected with indicate they are with are optimistic about the sweet goods category for the coming year, but for different reasons. Heiler notes that sweet good sales have continued to trend positive for the latest 13-week period. “They deliver on at-home meal and snacking occasions, provide the perfect canvas for leveraging growth in seasonal and limited time offering flavors, and can provide both affordable indulgence and family-pleasing value,” he says.

Dawn Foods is optimistic and sees positive growth for the sweet goods category in the coming year. The positive drivers of quality, value, and convenience will benefit the bakery landscape and deliver steady sales growth in the year ahead according to Wisloski.

Vandemoortele USA remains positive about the sweet goods market. “The need for a delicious product will never go away, and as consumers gain confidence in trying new products, they are going to desire versatile offerings.” states Dexters. “The company will be building on the success of its existing best-selling Banquet d’Or All Butter Croissant by adding new filled croissants with new decadent flavor additions, and enhancements.”

“While there are challenges throughout the industry, the challenges have never stopped us from still providing delicious French goods to consumers. If bakeries focus on finding the best business solutions to meet their needs, they will continue to be successful, and we look forward to supporting their growth,” shares Dexters.