State of the Industry: Sweet Goods—Caddy Shack of Sweet Goods
In today’s sweet goods market, products face a sand trap of consumers who forego sweet products.
It can be rather tough for sweet goods products these days. The huge movement to better-for-you items hasn’t exactly been good news and a smooth fairway for this category. But bakers and manufacturers of sweet goods, snack cakes and other delectable treats are watching the demands just as closely as producers in other bakery market segments, and heeding the calls.
John Rzeszut, senior brand manager at Dawn Food Products Inc. in Jackson, Mich., admits that the packaged sweet bakery category has definitely been stuck in a bunker from so many economic challenges affecting the broader grocery industry. “We see this being manifested in two ways: In the form of pricing actions across most segments; and through more aggressive stock-keeping unit (SKU) rationalization of underperforming items,” Rzeszut says. “As a result of the economy, consumers are demanding greater quality and value from the purchases. That’s one of the main reasons we relaunched our Weight Watchers muffins with improved formulations and a higher piece count (four muffins versus three previously) for the same price in-store.”
As the economic conditions continue to impact the category, Rzeszut says it will be even more important for manufacturers to develop innovative products that provide notable points of difference to consumers. “Overall, unit sales are down in the packaged sweet bakery category, with offsets due to pricing actions that address commodity pressure,” he adds. “There is also a shift in the type of products purchased, with consumers showing strong interest in smaller packs at lower absolute prices.”
And with most market segments, private label has been more popular in these difficult economic times. Within the packaged sweet bakery category, however, private brands are still in their infancy stage,
according to Rzeszut. “It will be very interesting to see the evolution of the category over the next few years, especially at those retailers with well-defined brands that are willing to differentiate through innovative forms and products.”
Jeffrey Kaufman, president of Old Colony Baking in Spring Valley, Ill., agrees that consumers want value. “Consumers are looking for value but in doing so, they are also looking for increased quality in the perceived ‘value’ products,” he says. “They want quality items for a value.”
Old Colony responded by introducing a multipack of its Gourmet Fudge Brownies and a 5-oz. bag of its cobranded cookies in January. The cookies and brownies are retail priced at $1. “Even in a down economy, sweet snacks seem to hold somewhat steady,” Kaufman continues. “We all have our indulgences. When we need to satisfy those needs, we turn to our sweet goods and snacks.”
Unfortunately, some local bread and chip companies have succumbed to the economy or have been acquired by larger companies, he says, “which reduces the avenues for private-label [brands] in that sector. However, that void is being replaced by the larger chains that are venturing into the private-label category.”
Despite the economic situation where, in some product categories sales have declined, the snack bar category is growing. According to Kerry DeLaney, associate marketing manager for the Fiber One bars brand at Minneapolis-based General Mills, “We’ve seen an increasing trend toward more snacking and incorporating snacks into traditional mealtime occasions.”
Brent Bradshaw, vice president of marketing–cake, at Flowers Foods, based in Thomasville, Ga., says that his firm is also seeing consumers snacking more, so portability is important. “Consumers also seem to be opting for more indulgent snacks, and through our Tastykake, Mrs. Freshley’s and Blue Bird brands, we offer a wide variety of cake and sweet snacks that fit the bill.
For nearly a year now, we’ve been focusing our attention on expanding the market for Tastykake; we’ve successfully introduced the iconic Philadelphia brand into our core market in the South and as far west as Texas,” he says.
“Tastykake items, like the popular Kandy Kakes, are unique compared to other snack cakes on the market. We’re also introducing new products, like bag mini donuts, into Tastykake’s core market in the Northeast,” he adds.
Flowers’ Mrs. Freshley’s product lineup just introduced Mrs. Freshley’s Honey Buns, Danish and Coffee Cake made with Cinnabon brand cinnamon. “The initial customer response has been positive,” Bradshaw says.
A sweet pick-me-up
Wholly Wholesome, a Chester, N.J., leader in all-natural frozen desserts that produces ready-to-eat and ready-to-bake products, says that despite belt-tightening in many senses of the phrase, and the consumer trend to abstain from sugary foods, everyone deserves a sweet indulgence free of additives, trans fats and highly processed ingredients. The company’s recipes combine modern baking techniques with choice ingredients to achieve superior taste and quality in its select, organic home-style baked goods.
Doon Wintz, president, says his firm is noticing an increase of nutraceuticals within snacks and desserts. “Over the past two decades, there has been a continued move to marry the concept of nutrition by introducing more nutritious ingredients into foods that normally would not be associated with nutrition,” he explains. “For example, you can add antioxidants to a snack or a dessert by choosing an ingredient like acai berry or goji berry, and the product becomes a nutraceutical snack because of the antioxidants.”
Wholly Wholesome also sees probiotics being incorporated into more foods because they increase the nutritional value. “Probiotics are now being seen in baked goods with the claim that they have encapsulated the probiotic in such a way that, even during the baking process, the culture still stays live and active,” says Wintz. “So we’ll begin seeing more probiotics coming out in frozen desserts as well, where they say we can keep the cultures alive and active.”
The company has also recently unveiled an organic, 9-in. rolled pie dough that features compost-friendly packaging. “It’s a prime example of what can be done with eco-friendly packaging within the freezer aisle today,” Wintz says.
Convenient chip shots
Wintz adds that mothers and families are looking for handy options that cater to a variety of dietary needs and food allergies. “They want to see the history behind products, how they came to be and where ingredients originate from,” he says. “That’s where we can offer a wholesome indulgence that caters to their needs. We keep our ingredient ledger uncomplicated, so that families can snack with confidence that what they’re consuming contains the best ingredients and not additives.”
Wholly Wholesome’s greatest opportunity within the category is in snacking. “A snack that delivers nutritional value but also satisfies the desire to snack is key in finding success,” Wintz says. “I think the outlook for the wholesale baked goods industry is there are always chances for growth and increased opportunities to connect with consumers. There is a lot of consolidation in retail and manufacturing [lately], in part due to the economy and in part because it’s the way people grow.”
To nuture a smaller company, consolidation is critical, Wintz points out. “Today, the opportunity for both the retailer and the manufacturer rests with flexibility,” he explains. “You have to be nimble enough to respond to consumers’ needs and yet you need time to come up with things that are creative. Unfortunately, for the retailer, the larger a company gets, the more difficult it is to be nimble and creative because a few mistakes or miscues just get too big to handle.”
Wintz says that Wholly Wholesome looks for ways that help retailers take chances and still do some things outside of their normal protocols. “For manufacturers, the opportunities rest in being able to recognize the real values and unique selling propositions as opportunities,” he says. “Today, it’s all about
A distinctive addition to breakfast debuted in February, when Kraft Foods introduced a handy treat that’s perfect for golfers on the links or anyone on the go. BelVita Nutritious Sustained Energy Breakfast Biscuits come in Blueberry, Apple Cinnamon and Golden Oat flavors. Delicious, lightly sweet and crunchy, the product was specially developed to fit into busy lifestyles. A four-pack carton of the new biscuits is priced at around $3.69.
BelVita provides nutritious sustained energy the whole morning, Kraft says. Each biscuit has 18-20 g. of whole grain per serving and a source of fiber and B vitamins. Nutritionists at Kraft created the breakfast item with a combination of selected ingredients and a carefully controlled baking process that helps preserve the integrity of the grain, says Kraft. This allows the carbohydrates in each biscuit to be released regularly and continuously to fuel the body.
Another example of something different is a cookie, a brownie or both? It’s even more than that. Dieters can delight in the latest crave-worthy treat that combines cookies and brownies in one. Fiber One 90-Calorie Brownies from General Mills come in a new Chocolate Chip Cookie flavor, launched nationally this month, that boasts a moist and satisfying texture and 5 g. of fiber. Each chocolate chip cookie/brownie is made with semisweet chocolate chips in a cookie-batter brownie, topped with a chocolaty drizzle and contains 20% of the Daily Value of fiber (5 g. per serving the company says). At 90 calories each, the brownies are great-tasting, diet-friendly treats and act as an on-the-go snack.
“Fiber One 90 Calorie Brownies have been a huge hit with consumers since their introduction last summer,” reports General Mills’ Delaney. “This new flavor gives them another delicious snack choice they can feel good about eating. The latest addition to the Fiber One lineup is an easy way for consumers to have what they crave while sticking to a balanced diet.”
DeLaney says that the emerging trends Minneapolis-based General Mills sees is a greater presence of positives in the category. “And to some extent, we’re seeing the absence of negatives (such as low-fat, low-calorie, etc.), without affecting the taste of the product,” she says. Products are striking the right balance of giving consumers what they want (great taste) with healthier credentials. For Fiber One, we strive to always deliver great taste with the health benefits of fiber.”
Melissa Fandrich, a senior consumer insights associate from General Mills’ Snacks Division, notices a growing interest in protein. “Consumers are seeking a variety of benefits from protein, including everyday health, energy, and satiety and, to some extent, weight management,” she says. “We hear consumers talk about seeking protein for themselves and their kids for general health, with a special focus on breakfast as an important meal occasion to include protein to start their day off right.”
Fandrich says the protein trend has evolved from being about muscle building and recovery to general health. “Consumers have many more delicious options for adding protein to their diet as the category grows, such as with the addition of new Nature Valley Protein Bars, launched in January,” she notes.
General Mills has also leveraged the Fiber One line against these trends by continuing to make fiber delicious and relevant to consumers’ lifestyles, adds DeLaney. “Fiber One Bars were introduced in 2007, Fiber One 90 Calorie Bars were launched in 2009, and Fiber One 90 Calorie Brownies hit the market in 2011,” she says. “Year over year since the brand launched, business has grown because the products come in a variety of delicious flavors, offer the benefit of fiber and fit within consumer lifestyle needs (portable, on-the-go snacks; 90 calories for those looking for products to fit their weight-management journey, etc.).”
Fandrich says there’s indeed a growing trend in overall snacking. “Research shows that about 25% of consumers’ calories are consumed through snacks, and the snack category has responded well to consumers’ changing needs and desire,” she says. “In the past, snacking was viewed negatively, but today it’s seen as a positive, a good way to keep up energy, tide you over between meals and get some added nutrition. In the granola bar aisle, the category has grown to meet consumers’ needs, offering bars that are delicious, healthy and convenient, and there are many more options for consumers to choose from today.”
General Mills Snacks launched new packaging in 2011 that features a more contemporary design, a refreshed logo and new product photography, she says. “Products or brands that pass the test of time win the trifecta of taste, convenience and health. The sweet snack category is unique in that it can play very well in all three, and Fiber One has enjoyed year-over-year growth because we meet these standards for our consumers.”
Pleasing portion control
Despite all of the changes experienced by Sara Lee Corp., Downers Grove, Ill., in the past year, its Sweet Goods business is still bouncing those birdies. In January 2011, Sara Lee announced it would be divided into two publicly-traded companies—one focused on the international coffee and tea market and the other on North American meats. Bimbo Bakeries bought its sliced bread products business and introduced them to the Northeast market, including Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. Bimbo expanded the existing distribution network of Sara Lee breads in the Mid-Atlantic region, including Delaware, Maryland, New Jersey, Pennsylvania and Washington, D.C.
Sara Lee desserts have a strong heritage dating back to 1935. “We’re proud to be a part of many families’ rich traditions,” says Kanika White, senior brand manager, Sara Lee Sweet Goods. “Within our deep portfolio, we provide products that deliver great homemade taste and quality, which consumers expect from Sara Lee. As a brand that consumers have loved and trusted for 75 years, we will continue to innovate and adapt to meet their needs.”
Sara Lee Pound Cake Slices, launched in March, are available in Original and Double Chocolate flavors. The new slices of the moist classic dessert are individually prepackaged to ensure freshness and with personal snacking in mind.
The convenient and delicious slices are one way consumers can enjoy one of Sara Lee’s most popular desserts in a single-serve, pre-cut format. The two rich flavors are available nationally with six slices per package. “As people’s lives have gotten busier, on-the-go and conveniently-portioned snacking options have gained popularity,” says White. “It’s important we understand what people want when it comes to snacking, while not compromising the great taste and homemade quality people expect and love about our Sara Lee Pound Cakes. The new Sara Lee Pound Cake Slices give people the best of both worlds–the ability to snack simply wherever they please, any time of the day.”
Personal snacking continues to gain momentum in the frozen dessert aisle, White adds. The slices are ready to eat immediately, can be thawed in the refrigerator or can be heated in a microwave for approximately 5-10 seconds. Wrapped in clear film, they offer a convenient, portable dessert.
“Both varieties offer packaging that allows retailers to maximize their freezer shelf space by providing multiple display options,” says White. “One side of the package showcases the product vertically; the other side allows for horizontal display.” Individual film wraps also enhance moistness.
Each serving delivers a hearty snack with 160 or 180 calories. “Personal snacking with portion control in mind is a leading trend that’s continuing to gain momentum in the sweet goods category,” adds White. “From moms seeking new lunchbox treats to baby boomers living in smaller households, single-serve and individually wrapped products that make portion control easy, such as our new Sara Lee Pound Cake Slices, are becoming more popular.”
The slices were introduced in March. The company also relaunched Crème Pies at the end of 2011 and added two new flavors, Turtle Crème Pie and Banana Crème Pie. “Research shows that consumers are eating out less in favor of dinners at home, which has resulted in more opportunities for families to enjoy our desserts. In particular, our new and improved Sara Lee Crème Pies have become popular among consumers since launching in September 2011, and we’re looking forward to more growth in the future,” she says.
White points out that we all want just as much convenience with desserts as with any other food product. “Whether it’s convenience in the form of individually packaged products for on-the-go snacking, or pre-sliced desserts that simplify portion control, many people are looking for simple solutions for their everyday, occasionally busy lifestyles,” she says.
Entenmann’s Bakery, Totowa, N.J., says it has made more than 4 billion donuts. The bakery says that if it laid them all end-to-end, they would wrap around the Earth almost nine times. The bakery, which is owned by Bimbo Bakeries, partnered recently with The Salvation Army in a sweet celebration to commemorate the 75th National Donut Day on Friday, June 1. Started by The Salvation Army in 1938, this day honors the organization’s “Donut Lassies,” who served the round treats to soldiers during World War I. This is how the Salvation Army’s familiar donut symbol got started. The icon portrays the services it continues to provide to more than 30 million Americans annually.
To highlight this partnership and raise funds and awareness for The Salvation Army’s ongoing charitable work, Entenmann’s created a limited-edition donut box featuring a cobranded Entenmann’s and Salvation Army logo celebrating the 75th National Donut Day. Information on the box referred consumers to Entenmann’s Facebook page, where they could find out how to enter a contest to win ‘Free Donuts for a Year.’ The National Donut Day packages were available starting on May 8, at all major retailers nationwide.
“We’re proud to support an organization like The Salvation Army for this special milestone,” says Maureen Sticco, director of Entenmann’s marketing services. “Entenmann’s Bakery has been synonymous with fresh baked sweet goods for more than 100 years. The 75th Annual National Donut Day is a great opportunity to share our love for donuts with all consumers.”
Meanwhile, Dunkin’ Donuts, in conjunction with Sony Pictures, recently started a “Men In Black 3” promotion, whereby it offered three new items inspired by the “Men in Black 3” movie, including an Undercover Black Cocoa donut—a star-shaped, yeast donut filled with brownie batter butter creme and topped with chocolate icing and star sprinkles. It also featured a Chocolate Lunarmax donut, which comprised a glazed chocolate cake donut with rich chocolate icing drizzle and star sprinkles.
In addition to menu items, Dunkin’ Donuts introduced an innovative new mobile app inspired by the Men In Black 3
film. Spikey Bulba, a lovable alien from the movie, becomes your very own, napping in his new home inside your iPhone, iPad or Android device. The app also points consumers to the nearest Dunkin’ Donuts restaurants.
Flavor changes, ‘grownup’ updates
Other manufacturers are looking at new flavors and even name changes. For example, the Nabisco subsidiary of Kraft Foods rarely takes a cookie-cutter approach when it comes to marketing Fig Newtons, which have been going strong since their introduction in 1891. But the company has dropped the word “fig” from its logo, and the snack cakes or cookies are now known simply as Newtons. The shift came not only because the cookie has, for decades, been available with other fillings, including strawberry, but also because the fig may lack the pizzazz of, say, a pomegranate for health-conscious consumers. The company launched a new advertising campaign that highlights Newtons’ new fruit flavors, as well as recently launched Newtons Fruit Thins line of crispy cookies.
Newtons’ new triple-berry-filled cookie is made with whole grain, while another new flavor is of the crispy variety: apple cinnamon oat. A TV ad for that version says, “Being the apple of someone’s eye—is easier with cinnamon.” The TV ad campaign, introduced in April, isn’t aimed at children, to whom cookies are typically pitched, or even mothers, who typically pack their lunchboxes, but instead to baby boomers.
In fact, Tim Scott, president of the Chicago office of the ad campaign’s creator, McGarryBowen, says the new marketing forgoes conventions of ads directed at children. “You see a lot of animation and characters, and kids asking for cookies and eating cookies,” Scott says. “We thought, let’s stay away from cute, let’s stay away from silly, and let’s do something a little more cerebral, a little more adult.”
By 2010, Newtons had experienced four year-over-year declines in sales and market share for the brand, so Nabisco conducted consumer research with boomers who were both devotees and detractors. “For people who loved us, there was heritage there, and they had eaten them most of their lives,” notes Tara Rutan, brand manager for Newtons. “But the opposite was true with the people who didn’t love us: They knew the brand as Fig Newtons, but they really disliked figs.”
Rutan says the Newtons name is associated with “real fruit, and at the end of the day that’s what we’ll always stand for.” Since last May, packages have included the logo as simply Newtons, with the flavor relegated to smaller text printed across an illustration of fruit. At the same time, the brand introduced the Newtons Fruit Thins line of crisp cookies, a version of which Kraft has marketed in Canada since 2005 as Lifestyle Selections under the Peek Freans brand.
The declines swiftly reversed, primarily because of the new Fruit Thins. “We needed to let fruit be the core of the brand as opposed to the fig,” says Gary Osifchin, senior director of wholesome sweet snacks at Kraft. “It was going to be hard for us to advance the Newtons brand with the baggage of the fig.”
Another summer sport
Hostess in Irving, Texas, maker of some of America’s most iconic snack cakes, is also getting into the swing this season with the release of its limited-edition Baseball CupCakes. From April 30 through June 2, the company unveiled specially marked packages of Hostess Baseballs—frosted yellow cake with creamy filling and white icing, featuring red iced “stitching.” The company’s multipacks of Hostess Twinkies and Hostess Chocolate CupCakes will also be decked out in baseball packaging.
Each package will have an on-pack code that consumers can enter at www.hostesscakes.com for a chance to win a grand prize VIP weekend and other prizes. Additionally, everyone has the opportunity to download and print free baseball cards featuring
“The Hostess Baseball promotion is a tradition made even more exciting this year with a fun instant-win game that brings together two American favorites, iconic Hostess snack cakes and America’s favorite pastime, baseball,” says Amy Clark, director of snack marketing for Hostess.
The greenskeeping of gluten-free
Building on more than 20 years of gluten-free category products, Pamela’s Products, Ukiah, Calif., recently made a $1-million investment in its California-based bakery, doubling production capacity and consolidating operations under one roof. At 76,000 sq. ft., the new facility spans more than one and a half acres, joining two previously separate bakeries under single management. Adding an energy efficient, 120-ft.-long tunnel oven and three new wrapping machines, Pamela’s now accommodates increased production of the company’s full suite of gluten-free products, including cookies, bars, baking mixes, biscotti and ready-to-eat cakes.
“The new facility reflects the energy and enthusiasm we have for making the most delicious gluten-free products anyone can buy,” says company founder and CEO Pamela Giusto-Sorrells, who says she’s most proud of her bakery’s new energy-efficient ovens. “This milestone also demonstrates our commitment to our loyal fans and our outlook on the future. I look around this gorgeous new bakery and see so many possibilities for sustained growth. It really is a dream come true.”
Guisto-Sorrells says there are plenty of gluten-free offerings and more are on the way. “The launch of Thomas Keller’s Cup4Cup gluten-free flour blend is something we’re certainly paying attention to,” she notes. “A gluten-free product from such a well-known and respected chef indicates how relevant gluten-free is today. It also demonstrates that consumers are seeking options for easy gluten-free baking at home, and that’s what Pamela’s Products has been delivering for more than 20 years with products like our best-selling Baking & Pancake Mix.”
In addition to needed square footage, Pamela’s Products continues to reduce its carbon footprint. Sustainable production enhancements include switching to polyethylene terephthalate (PET) trays made from recycled plastic, adopting recyclable paperboard packaging and printing with soy inks. The company has also installed energy-efficient lighting throughout the new bakery, and Pamela’s remains focused on sourcing local California ingredients whenever possible.
Pamela’s also has launched nine new products designed to take the guesswork out of gluten-free eating and baking at home. Giusto-Sorrells introduced these items at Expo West. They include Artisan Flour Blend, Biscuit & Scone Mix, Oatmeal Cookie Mix, Sugar Cookie Roll & Cut Mix and a 12-pack counter displays for Oat Blueberry Lemon, Oat Cranberry Almond, Oat Chocolate Chip Coconut and Oat Raisin Walnut Spice Whenever Bars.
“There is a need for delicious and nutritious gluten-free convenience items like our Whenever Bars,” she says. “There has been a real void in the category for ‘grab-and-go’ gluten-free items that actually taste good. My passion is creating gluten-free products that taste better than their conventional counterparts.” Launched last fall based on customer requests, Whenever Bars were developed to taste good. The soft, chewy, snack bars have 9 g. of whole grains per serving, are a good source of fiber, and are made with certified pure gluten-free oats, almonds, walnuts and chunks of real fruit.
“We also added chia seeds to give the bars a significant Omega 3 essential fatty acids and dietary fiber boost,” she points out. “They’re nondairy, low in sodium and cholesterol, and lightly sweetened primarily with agave and coconut sugar.” The Whenever Bars come in Oat Blueberry Lemon, Oat Cranberry Almond, Oat Chocolate Chip Coconut and Oat Raisin Walnut Spice. The line is making its way to store shelves nationwide with a retail price of $4.99 per box, five bars per box; they’re also available on Pamela’s website.
“Whenever Bars are made with simple, real ingredients such as cranberries, blueberries, raisins and dark chocolate so you’ll feel satisfied, not hungry, after you eat one,” she says.
Giusto-Sorrells personally develops all Pamela’s recipes. “Gluten-free shouldn’t mean sacrificing delicious, home-baked comforts like light, fluffy bread or decadent cookies warm from the oven,” she adds. Pamela’s new products are certified gluten-free by the Gluten Free Certification Organization (GFCO) and contain no artificial flavors, colors or preservatives.
The new additions expand the company’s product offerings to 135 stock-keeping units (SKUs), ranging from baking mixes, cookies and bars to biscotti and ready-to-eat cakes. All of the new products are expected to hit retail shelves this summer.
Pamela’s has also updated its packaging with a larger, easy-to-see brand logo at the bottom right corner of each bag and a cleaner typeface designed to help consumers quickly find their favorite mixes in the grocery store. The updated bags will maintain their iconic and easily recognizable pastel graphics and bright jewel tone colors.
Gluten-free products often cost more as the ingredients are much more expensive than their wheat counterparts, Giusto-Sorells admits. “In our experience, gluten-free shoppers seek out trusted brands and products they know taste delicious. Many shoppers have spent good money on a gluten-free product purchased, only to be disappointed. So, when they find a brand they enjoy and that tastes good, these consumers become very brand loyal.”
Natalia Wolting, communication and customer service coordinator at Endangered Species, an Indianapolis-based socially responsible company created to spread awareness and make an impact on the growing number of plant and animal species disappearing from the Earth, has also seen a surge in demand for gluten-free products. Endangered Species began with a line of 12 chocolate products that sold well in small natural food stores across the Northwest. Today, it’s a leader in natural and organic chocolate manufacturing. “The gluten-free movement has been a trend before, but it seems that as more people become aware [of it], we get more requests from consumers to have gluten-free products,” Wolting says.
Most of Endangered Species’ chocolate confections and other products are gluten-free, so the company just redesigned its labels and moved the gluten-free certification from the back of its packages to the the front of its packages. To help consumers connect its premium brand with an environmental mission, the company created a prominent 10% Promise tag on the face of its label design; inside each label, the 10% Promise is repeated and explained in greater detail. A quality paperstock and finishes that adhere to environmental standards were also used to give the packaging a polished look that presents the Endangered brand as a gift item.