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FROZEN DOUGH A CATEGORY BRIGHT SPOT

Despite higher prices, cost-conscious consumers continue to bake at home to save money.

Thanks mostly to inflationary pressure, dollar sales of frozen bread and dough rose 2.6% during the 12 weeks ended Dec. 3 (versus the same period a year earlier) to $362.52 million, reports Chicago-based market research firm Circana. However, unit sales fell 2.8%, mirroring losses for the frozen department as a whole.

Units were dragged down by a 4.3% decline in the fresh baked bread/roll/biscuit subcategory where several top 10 brands registered double-digit declines. Some of the damage was offset by the frozen dough subcategory where units rose 5.6% (and dollars jumped 8.4%). Despite higher price tags, the segment was likely fueled by cost-conscious consumers looking to save by baking at home.

More evidence that consumers are looking to stretch their dollars: a whopping 64.7% increase in private label dough sales during the period (units were up 70.7%).

Callie’s Hot Little Biscuit has added Buttermilk, Cinnamon, and Blueberry frozen biscuit varieties in Whole Foods Markets.

Still, rising food prices remain a concern. While the rate of inflation has stabilized, “the year-over-year impact of higher price has been notable,” says Paige Moore, business manager, category solutions, for Stamford, Conn.-based Daymon. To be able to stick to their budgets, consumers have increasingly turned to frozen bread and dough “for their better unit cost potential and longer shelf life,” she explains.

“Inflation is the overriding factor in the frozen bread section,” adds Kenny Farnsworth, president of Salt Lake City-based Rhodes Bake-N-Serv. “Consumers are looking for value. Frozen bread and roll dough provide better value than offerings in the in-store bakery and commercial bread aisle.”

Just like the frozen dough subcategory overall, Rhodes Bake-N-Serv saw an increase in unit sales for these products — especially roll dough — in the fourth quarter of 2023, reports Farnsworth. “Retailers can take advantage of this trend by giving more space and displaying items that offer the best value in the frozen bread section,” he says.

But cost savings isn’t the only category growth driver. A Technavio report released in January says demand for frozen bakery products, including frozen bread, has surged due to consumers’ desire for convenience.

CLEAN-LABEL DEMAND ‘HUGE’

Clean label is in “huge” demand among frozen bread and dough shoppers, says Carrie Morey, founder of Callie’s Hot Little Biscuit, North Charleston, S.C. Consumers are increasingly asking for “products made with whole, simple, and recognizable ingredients,” so Callie’s emphasis on “only four ingredients” is catching on with customers.

In November, the company rolled out several of its biscuit varieties in Whole Foods Markets across the country, including the coveted California market.

“We know that our process and simple ingredient list will resonate with their customers,” says Morey. The lineup includes Buttermilk, Cinnamon, and Blueberry.

Clean label is also a priority for Boulder, Colo.-based Rudi’s Rocky Mountain Bakery, formerly Rudi’s Gluten-Free. Last fall, the company introduced clean-label Texas Toast (Garlic and Three Cheese with Garlic) in both conventional and gluten-free formats, both ready to eat in four to five minutes. Last month, Rudi’s launched its second frozen prepared food innovation, Breakfast Sandwiches, featuring its own gluten-free brioche buns and sourdough English muffins.

‘The gluten-free population is having a moment right now, and it’s time to accommodate them.’

Baltimore-based Mason Dixie Foods also sees continued opportunity in products that promote a sense of indulgence “that you can feel good about,” such as its biscuits containing real dairy and butter. While these ingredients are rich, they fall into the category of low-to-non-processed foods that consumers want, says Ayeshah Abuelhiga, founder and CEO. “Consumers are looking for products that support holistic wellness and overall health of our bodies and the environment, and consumers are willing to pay more for it,” she says.

THE GROWING GLUTEN-FREE SEGMENT

By 2028, the overall gluten-free food market is projected to increase by $5.5 billion and its market size to grow at a CAGR of 10.5%, compared with 2023, according to a Technavio analysis.

“Food sensitivities, allergies and dietary restrictions continue to be prevalent, so ensure you have options that address a variety of dietary needs like gluten-free or nut-free,” says Jane Miller, CEO of Rudi’s Bakery.

Clean label Texas Toast — both conventional and gluten-free — from Rudi’s Rocky Mountain Bakery is hitting stores now.

As awareness of celiac disease spreads, “Gluten-free is a growing business,” confirms Esther Anzaroot, co-founder of Brooklyn-based Gluten Free Easy. “The gluten-free population is having a moment right now, and it’s time to accommodate them.”

Retailers who pay attention to these consumers can drive loyalty and repeat sales not only by stocking a wide variety of gluten-free frozen bread and dough products, but through cross-promotion and education, Anzaroot says. As an example, she cites the demand for kid-friendly gluten-free bread and dough products such as sandwiches and pizza. “There is so much demand for things that can fill that school lunchbox,” she says. To target parents, stores could include these offerings in promotions and displays.

Gluten Free Easy, which recently introduced Puff Pastry Squares, Puff Pastry Sheets, Pita, and Pizza, is preparing to launch a kosher line for Passover celebrations by next month. Gluten Free Easy was named a Top Pick among 2023 Products of the Year by Food & Beverage Magazine.

CROSS-PROMOTION IDEAS

To further drive sales, retailers should review whether they’re doing enough cross-promotion of frozen bread and dough products with items in other categories. Examples include various twists on the tried-and-true peanut butter and jelly sandwich, apple pie filling with pie shells and chocolate with pastries. Meanwhile, versatile biscuits can be cross-promoted with gravy, cobbler, pizza and more. And deli meats go great with puff pastry sheets for mini franks in blankets. There are also opportunities to create different cheese and bread pairings, pizza doughs with cheeses and sauces, and breads with dips.

“Dips are very hot right now, especially cream cheese-based dips,” says Michael Powis, senior marketing manager at Mt. Laurel, N.J.-based J&J Snack Foods. “Anytime there’s a new dip on the market, there’s a consumer that would love a great bread to dip into it.”

In addition to cross-promotion, retailers “should give new products an opportunity to shine,” says Brys Stephens, founder of Charleston, S.C.- based Brothers Gerard. “Particularly in the bread door, there are so many legacy brands that are staples that are of mediocre quality.”

Despite the rise in food prices, Miller says consumers see bread as a staple and shoppers have continued to buy it on a frequent, regular basis. As inflationary pressures ease, “We see consumers making a shift back to branded products, where the last few years the shift was toward store brands,” she says. “So retailers should ensure they have the right brands on their shelves to keep those loyal, habitual purchases.” The 2023 Tracking CPG Inflation Report confirms that private label growth has stalled a bit, leading national brands to fight back to win back customers.

While inflation is still a factor, it has slowed down. Farnsworth points to data that shows that in December, the 2% CPG price increase was lower than overall CPI (inflation) at +3.4%. This will likely suppress retail dollar growth, and higher prices may not continue to make up for lost unit sales. Therefore, retailers would do well to shift their focus to volume.

Tiffini Theisen

Tiffini Theisen

Tiffini is a contributor of Frozen & Refrigerated Buyer.

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