A Hole New Approach
Bagel producers strive to reinvent their category’s image with bite-sized, portion-controlled and nutrient-filled products that are relevant to today’s fickle, calorie-conscious consumers.
By Dan Malovany
Back in the 1990s, it was a bull market in more ways than one. In addition to stocks, the decade featured the great bagel run.
In the foodservice market, bagel shops blossomed by the thousands and chains such as the Great American Bagel, Chesapeake and Bruegger’s Bagels seemingly couldn’t build them or find franchisees to run them fast enough. Then Dunkin’ Donuts and McDonald’s jumped in the fray with two-fisted sandwiches for the burgeoning breakfast eating occasion.
In the retail channel, the growth was no less frenzied as bagels migrated out of the freezer case to battle English muffins in the bread aisle. Back then, the category experienced healthy double-digit annual sales, and bigger was better as some producers got caught up in a little “irrational exuberance” of their own by rolling out honkin’ 4-oz. “bull” bagels that were as soft as a dinner roll and large enough for any two-fisted eater.
Then came the crash during the low-carb craze. Overall retail sales of bagels took an especially hard hit because of their high-calorie and high-carbohydrate levels. Likewise, foodservice chains downsized and even closed up shop altogether as traffic declined.
Fortunately, sales of bagels have slowly rebounded since the peak of the low-carb trend in 2005 when whole grains gained traction in popularity and consumers realized a rational approach to the breakfast eating occasion. According to Chicago-based Information Resources, Inc., the category in the retail sales has grown 5.1% over the last year, led by Horsham, Pa.-based Bimbo Bakeries Thomas’ brand, which continues to leverage its prowess English muffin category.
However, overall category sales are flat or down this year because of the recession and the decline in sales in the foodservice channel, says Joe Latouf, executive vice president of sales and marketing at Harlan Bakeries.
Latouf should know since the Avon, Ind.-based company is quietly one of the nation’s largest producers of bagels with a customer base that touches all channels of the market. In addition to its own small branded presence in the refrigerated and freezer case, Harlan contract manufactures bagels, supplies in-store bakeries and serves some of the biggest quick-service restaurant (QSR) chains. Harlan Bakeries also makes a wide variety of baked goods, including desserts, English muffins, rolls and more, for these various channels.
“Since the recession hit hard in 2008, bagel sales are down on a customer-by-customer basis, but innovative new products and new customers have fueled our company’s steady growth over the last year despite the downturn in the economy,” Latouf says.
That product innovation, he adds, differs according to channel. QSR chains, and specifically bagel shops, are returning to more traditional bagels with their classic chewy texture. Other restaurant and in-store bakery chains are searching for new varieties of all-natural products.
“All natural has shelf-life limitation, but it can suit foodservice and in-store bakers where the products are consumed more quickly after they’re purchased,” Latouf explains.
In the bread aisle, he adds, growth in the bagel category has been driven by smaller bagels, such as 100-calorie and mini snack products.
“Mini bagels are the fastest growing segment in the bagel business,” Latouf says. “That’s being driven by consumption by kids and women. They like the taste and texture of bagels, but they don’t want all of the calories and carbohydrates.”
Riding Mini Momentum
Almost every bagel producer has rolled out mini bagels. In August, for instance, Sara Lee rolled out its Soft & Smooth Mini Bagels that are made with whole grains, provide a portable, on-the-go food option and can be used as both a snack or incorporated into lunch or another meal, says Heather Collins, director of marketing, Sara Lee North American Fresh Bakery, Downers Grove, Ill.
“Families today lead increasingly busy lives and are looking for nutrition products that can be prepared quickly and consumed whether they are in the kitchen or in the car,” she says.
An extension of the company’s popular Soft & Smooth baked goods portfolio, its mini bagels combine whole grains with a mild flavor and smooth texture to appeal to a broad range of consumers in terms of both taste and nutrition. The 100-calorie products have 9 g. of whole grains per serving.
“Our goal was to increase nutrition in a way that the product would appeal to any family member,” Collins says.
In the mini-bagel segment, kids are king. That’s why Lender’s Bagels recently rolled out its Little Lender’s bagels, says Ray O’Brien, vice president for Lender’s Bagels.
O’Brien says bagels for kids, bagels as snacks and healthy bagel platforms are driving category sales.
“New Little Lender’s are the perfect snack,” he says. “At just 70 calories, the plain style is great with a little peanut butter and jelly spread on, and the cinnamon flavor is great right out of the bag.”
According to Latouf, the top sellers in the segment are plain bagels followed by cinnamon sugar, blueberry and a mixture of whole grains and multigrain varieties.
“Kids like a sweeter bagel as more of a treat,” he says.
The miniaturization of the bagel, he adds, is part of the broader trend in the bread aisle toward smaller 100-calorie options such as English muffins and even toward the mini and flat buns that offer both portion-calorie control.
The 100-calorie products especially target Baby Boomers and those consumers who are making heart-healthy decisions or are looking for ways to treat the growing problem of diabetes caused by weight gain and other habits, says Robert Pim, vice president of sales and marketing for Fleischer’s Bagels, Inc., Macedon, N.Y.
“It is no secret that obesity is a major problem in America today, and people are starting to pay more attention to what they put in their mouths,” he says. “And because of that, larger portions are not in demand. Healthy, lower calorie options are the trend. Also, we can’t ignore the low-carb craze. Although the craze is not as it once was, people are focused more on making smarter choices about their good-versus-bad carb intake.”
In January, Sara Lee is targeting moms and those consumers trying to manage their weight with 130 Calories & Delightful bagels, Collins notes.
“Bagels can still often have a negative reputation for being high in calories and low in nutrients, causing consumers to shy away,” she explains. “By creating products such as the 100-calorie Mini Bagels, which have 2-3 g. of fiber per bagel, and the 130 Calories & Delightful bagels, we are providing options to these consumers who still crave bagels, but want to consume them in moderation. Providing consumers with options that fit their diet or nutritional needs is key to regaining consumer interest and driving sales in the bagel category."
Target Health Attributes
To respond to consumers’ demand for more nutritional options, Pim adds, Fleischer’s also offers 100-calorie minis as well as all-natural bagels, certified-organic ones, whole grain varieties and a host of nutritional fortification that deliver relevant health attributes. In addition to vitamins and minerals, the bagels offer fiber, fruits for antioxidants and plant sterols for supporting the immune system, as well as prebiotics and probiotics for the gastrointestinal health. On the flipside, it’s also removing high-fructose corn syrup and reducing sodium levels, the latter of which may become a critical issue when the 2010 Dietary Guidelines are worked out.
Although some bakers may dismiss the gluten-free craze as the “son of the low-carb fad,” the movement has gained traction with some consumers, especially those suffering from Celiac disease. In its response, Eagan, Minn.-based French Meadow Bakery in September came out with flourless bagels made with six, all-natural grains and legumes and essential amino acids. The vegan products, which come in Sprouted 16 Grain & Seed and Sprouted Cinnamon Raisin varieties, feature ingredients such as sprouted wheat berries and organic sprouted barley, millet, lentils, soybeans and spelt berries, to name a few.
Others like Lender’s are taking a more mainstream approach by adding whole grains and fruits such as a combination of apples and cranberries to create a seasonal variety for this fall, O’Brien says.
“There is more medical evidence than ever before that people who eat healthy live longer,” he says. “Bagel manufacturers need to follow these trends by showing consumers that they can still eat the foods they love, like bagels, and can do by eating smaller portions or opting for healthy alternatives.”
By Dan Malovany
Back in the 1990s, it was a bull market in more ways than one. In addition to stocks, the decade featured the great bagel run.
In the foodservice market, bagel shops blossomed by the thousands and chains such as the Great American Bagel, Chesapeake and Bruegger’s Bagels seemingly couldn’t build them or find franchisees to run them fast enough. Then Dunkin’ Donuts and McDonald’s jumped in the fray with two-fisted sandwiches for the burgeoning breakfast eating occasion.
In the retail channel, the growth was no less frenzied as bagels migrated out of the freezer case to battle English muffins in the bread aisle. Back then, the category experienced healthy double-digit annual sales, and bigger was better as some producers got caught up in a little “irrational exuberance” of their own by rolling out honkin’ 4-oz. “bull” bagels that were as soft as a dinner roll and large enough for any two-fisted eater.
Then came the crash during the low-carb craze. Overall retail sales of bagels took an especially hard hit because of their high-calorie and high-carbohydrate levels. Likewise, foodservice chains downsized and even closed up shop altogether as traffic declined.
Fortunately, sales of bagels have slowly rebounded since the peak of the low-carb trend in 2005 when whole grains gained traction in popularity and consumers realized a rational approach to the breakfast eating occasion. According to Chicago-based Information Resources, Inc., the category in the retail sales has grown 5.1% over the last year, led by Horsham, Pa.-based Bimbo Bakeries Thomas’ brand, which continues to leverage its prowess English muffin category.
However, overall category sales are flat or down this year because of the recession and the decline in sales in the foodservice channel, says Joe Latouf, executive vice president of sales and marketing at Harlan Bakeries.
Latouf should know since the Avon, Ind.-based company is quietly one of the nation’s largest producers of bagels with a customer base that touches all channels of the market. In addition to its own small branded presence in the refrigerated and freezer case, Harlan contract manufactures bagels, supplies in-store bakeries and serves some of the biggest quick-service restaurant (QSR) chains. Harlan Bakeries also makes a wide variety of baked goods, including desserts, English muffins, rolls and more, for these various channels.
“Since the recession hit hard in 2008, bagel sales are down on a customer-by-customer basis, but innovative new products and new customers have fueled our company’s steady growth over the last year despite the downturn in the economy,” Latouf says.
That product innovation, he adds, differs according to channel. QSR chains, and specifically bagel shops, are returning to more traditional bagels with their classic chewy texture. Other restaurant and in-store bakery chains are searching for new varieties of all-natural products.
“All natural has shelf-life limitation, but it can suit foodservice and in-store bakers where the products are consumed more quickly after they’re purchased,” Latouf explains.
In the bread aisle, he adds, growth in the bagel category has been driven by smaller bagels, such as 100-calorie and mini snack products.
“Mini bagels are the fastest growing segment in the bagel business,” Latouf says. “That’s being driven by consumption by kids and women. They like the taste and texture of bagels, but they don’t want all of the calories and carbohydrates.”
Riding Mini Momentum
Almost every bagel producer has rolled out mini bagels. In August, for instance, Sara Lee rolled out its Soft & Smooth Mini Bagels that are made with whole grains, provide a portable, on-the-go food option and can be used as both a snack or incorporated into lunch or another meal, says Heather Collins, director of marketing, Sara Lee North American Fresh Bakery, Downers Grove, Ill.
“Families today lead increasingly busy lives and are looking for nutrition products that can be prepared quickly and consumed whether they are in the kitchen or in the car,” she says.
An extension of the company’s popular Soft & Smooth baked goods portfolio, its mini bagels combine whole grains with a mild flavor and smooth texture to appeal to a broad range of consumers in terms of both taste and nutrition. The 100-calorie products have 9 g. of whole grains per serving.
“Our goal was to increase nutrition in a way that the product would appeal to any family member,” Collins says.
In the mini-bagel segment, kids are king. That’s why Lender’s Bagels recently rolled out its Little Lender’s bagels, says Ray O’Brien, vice president for Lender’s Bagels.
O’Brien says bagels for kids, bagels as snacks and healthy bagel platforms are driving category sales.
“New Little Lender’s are the perfect snack,” he says. “At just 70 calories, the plain style is great with a little peanut butter and jelly spread on, and the cinnamon flavor is great right out of the bag.”
According to Latouf, the top sellers in the segment are plain bagels followed by cinnamon sugar, blueberry and a mixture of whole grains and multigrain varieties.
“Kids like a sweeter bagel as more of a treat,” he says.
The miniaturization of the bagel, he adds, is part of the broader trend in the bread aisle toward smaller 100-calorie options such as English muffins and even toward the mini and flat buns that offer both portion-calorie control.
The 100-calorie products especially target Baby Boomers and those consumers who are making heart-healthy decisions or are looking for ways to treat the growing problem of diabetes caused by weight gain and other habits, says Robert Pim, vice president of sales and marketing for Fleischer’s Bagels, Inc., Macedon, N.Y.
“It is no secret that obesity is a major problem in America today, and people are starting to pay more attention to what they put in their mouths,” he says. “And because of that, larger portions are not in demand. Healthy, lower calorie options are the trend. Also, we can’t ignore the low-carb craze. Although the craze is not as it once was, people are focused more on making smarter choices about their good-versus-bad carb intake.”
In January, Sara Lee is targeting moms and those consumers trying to manage their weight with 130 Calories & Delightful bagels, Collins notes.
“Bagels can still often have a negative reputation for being high in calories and low in nutrients, causing consumers to shy away,” she explains. “By creating products such as the 100-calorie Mini Bagels, which have 2-3 g. of fiber per bagel, and the 130 Calories & Delightful bagels, we are providing options to these consumers who still crave bagels, but want to consume them in moderation. Providing consumers with options that fit their diet or nutritional needs is key to regaining consumer interest and driving sales in the bagel category."
Target Health Attributes
To respond to consumers’ demand for more nutritional options, Pim adds, Fleischer’s also offers 100-calorie minis as well as all-natural bagels, certified-organic ones, whole grain varieties and a host of nutritional fortification that deliver relevant health attributes. In addition to vitamins and minerals, the bagels offer fiber, fruits for antioxidants and plant sterols for supporting the immune system, as well as prebiotics and probiotics for the gastrointestinal health. On the flipside, it’s also removing high-fructose corn syrup and reducing sodium levels, the latter of which may become a critical issue when the 2010 Dietary Guidelines are worked out.
Although some bakers may dismiss the gluten-free craze as the “son of the low-carb fad,” the movement has gained traction with some consumers, especially those suffering from Celiac disease. In its response, Eagan, Minn.-based French Meadow Bakery in September came out with flourless bagels made with six, all-natural grains and legumes and essential amino acids. The vegan products, which come in Sprouted 16 Grain & Seed and Sprouted Cinnamon Raisin varieties, feature ingredients such as sprouted wheat berries and organic sprouted barley, millet, lentils, soybeans and spelt berries, to name a few.
Others like Lender’s are taking a more mainstream approach by adding whole grains and fruits such as a combination of apples and cranberries to create a seasonal variety for this fall, O’Brien says.
“There is more medical evidence than ever before that people who eat healthy live longer,” he says. “Bagel manufacturers need to follow these trends by showing consumers that they can still eat the foods they love, like bagels, and can do by eating smaller portions or opting for healthy alternatives.”
Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!
