In-store bakeries are as popular as ever

There’s no greater feast for the senses than a well-stocked in-store or standalone bakery filled with melt-in-the-mouth treats, decadent delights, the softest rolls, and the freshest bread. It can also be one of the trickiest departments or stores to manage, with multiple factors including wastage, hygiene, skills, cost management, packaging, quality, competition and changing consumer tastes all playing a role in its success.

Finding the right mix of household staples, impulse buys, innovative products, and convenience offerings is essential.

In terms of consumer demand, the desire for healthier alternatives from the bakery is on the rise globally. For those that can afford it, baked goods with added health benefits and reduced amounts of fat, sugar, preservatives, and overly processed ingredients are a must, while ‘special’ requirements are also becoming mainstream, with gluten-free, nut-free, dairy-free (including eggs) are on the rise. However, these trends clearly do not run across all in-store bakeries, and it is essential for retailers and store owners to understand their shopper base and what they want or would be willing to try..

7 ways to build your bakery

1. Implement strict ingredient control through the entire supply chain, including measurement and storage.
2. Install the best equipment to reduce wastage and prep time and to improve quality. A sub-optimal bakery increases expenses and lowers profit.
3. The bakery (front and back) should be 5-star clean at all times.
4. Product promotion is essential. Let your customers know about your bakery range.
5. Ask your customers for feedback. Train your staff to engage with shoppers at the counter. Ask them for product suggestions and what they would like to see in the display.
6. Combine the traditional with the innovative, for example, cereal bread.
7. Stay abreast of technological developments that will allow your bakery to switch to sustainable packaging.

A growing market

According to globaldata.com, “Bread and rolls combined are the largest category in the Bread and Cereals segment, and cookies is forecast to register the fastest value growth in the market. Hypermarkets and supermarkets are the largest distribution channel in the South African bakery and cereals sector. Flexible packaging is the most used pack material and Johannesburg emerged as the largest bakery and cereals market.”

A challenging environment

Rising costs and an erratic power supply are necessitating the implementation of alternative energy sources in all bakeries. A successful in-store bakery has to be an income-generating profit centre and it is therefore imperative for it to continue to operate during outages and loadshedding. Baking requires a significant amount of energy and can account for a significant portion of a store’s electricity consumption. In a country where the electricity supply is frequently interrupted and costs continue to soar, energy efficiency in the bakery is vital.

Save energy in your bakery

Recently the Mail and Guardian (mg.co.za) reported that, “The National Energy Regulator of South Africa (Nersa) granted Eskom an 18.65% tariff hike to help it cover its debt. This is less than the 32% that the utility had asked for 2022-23, but Eskom will get a further 12.74% in April 2024. This is a 33.7% increase from 2020, according to energy expert Chris Yelland.” This significant increase will put even greater strain on bakeries already struggling to turn a profit amidst soaring raw material and production costs, supply chain constraints, and the worsening economy.

Maximising efficiency, minimising waste

The good news is, while bakeries tend to use a lot of power, they do present a number of ways in which energy savings and streamlining can be achieved. According to World Bakers (www.worldbakers.com), Plant Engineering (www.plantengineering.com), and British Baker (bakeryinfo.co.uk), there are several key areas to consider when looking to maximise energy efficiency.

Fit for purpose – Ann Wells, commercial director at Brook Food & Bakery Equipment, explains it perfectly for British Baker when she says, “Each oven is capable of baking, but each one is [also] developed to give the maximum in baking specific products.” Choosing the right oven for your needs is the first step in maximising efficiency and minimising wasted energy. For example, Wells explains, electric deck ovens allow different types of products to be baked at the same time using differentiated management of the temperatures between the different decks, or even of the same deck. Rack ovens are better for small to medium products with a thin crust. The loading and unloading system allows for fast, continuous production.

Baking different products together – Certain bakery products naturally fall into similar categories, with similar production and baking needs. These can be grouped together to avoid wasting time as well as energy use. Pay particular attention to products that can be baked at the same heat.

Using the falling heat method – Start with the products that need the greatest temperatures and work your way down. If you incorporate new equipment that offers rapid element heating, you can increase that efficiency significantly while avoiding lengthy pre-heat times that cut into your non-load shedding hours.

Smart controllers – The technology driving these controllers has developed to such an extent that almost every oven or electrical function can be pre-set or pre-programmed. Some controllers can also be used as monitoring devices.

Monitoring and temperature profiles – Like most equipment that requires electricity, monitoring that energy usage, as well as the overall functionality of the equipment, is an important diagnostic and preventative maintenance tool. Temperature profiles can alert your bakery staff to hot or cold spots in the ovens, which indicate a problem and can affect production quality. Identifying small problems quickly is important.

Maintenance and repairs – Keeping your equipment in good running order is essential for maintaining efficiency. From replacing worn seals and broken elements to ensuing your gear boxes and drives are clean, oiled, and running smoothly, fixing or preventing problems is the best way to avoid a costly disaster.

Upgrade if necessary – Unfortunately, like most equipment, increased age does mean decreased efficiency. With all the maintenance and care in the world, equipment that is 20 to 30 years old (or more) will no longer be capable of functioning at maximum efficiency. Upgrading to newer equipment is a necessity. The upside to this is that you can choose equipment that is fit for purpose, does exactly what you need, and that has been designed to be as energy efficient as possible. Despite the initial outlay, this is an investment that makes good business sense.

Alternative power sources – An alternative uninterrupted power source is a vital piece of equipment for bakeries where most of the products rely on consistent heat to rise. Eskom’s load shedding schedules are wont to change at a moment’s notice and can go from stage 2 to stage 6 in the blink of an eye. Add to this an ageing infrastructure which simply cannot cope with the frequent power surges and constant on/off, and your chances of being off for ten or more hours a day are worryingly high. An interrupted bake is a waste, a loss, and an economic blow. This is why investing in an alternative power source and a high-quality UPS system is so essential. Discuss your bakery power needs with your equipment supplier and your alternative power solutions provider. Include your hot displays for warm products – consumers don’t want cold, soggy cheese puffs and congealing pies!

What people want – how to attract and retain customers even in the toughest of times

Local and international trends and innovations in the bakery category can help guide the way for retailers looking to tailor their offering to the different consumer groups frequenting the bakery section: those simply trying to feed their families, those struggling to make the best and healthiest choices possible on a budget, and those who still have some discretionary income and who want to either enjoy premium baked goods or whose health and lifestyle choices equate to a pricier product. Then there’s planned purchases and impulse buying – which is a big driver at the hard-to-resist baked goods counters.

Healthy baked goods

There is a rising pressure for healthier high-quality baked goods at a global level. Driven by increasingly health-conscious consumers, as well as the rise in food intolerances, there is a growing demand for products that are free from gluten, wheat, nuts, eggs, and dairy, or that are low-sugar, low-fat, vegan, keto, and banting friendly. Added seed and ancient grain breads, and those with added nutrients such as vitamins, iron, and calcium, are also popular. Bread may be a staple, but for certain consumers, that staple has a whole new range of requirements and expectations, including taste and quality.

Heat-and-eat, frozen bakery lines, speciality cakes

Occasion bakes, heat-and-eat, and frozen products for at-home entertaining are big sellers for many in-store bakeries. Spanning traditional local favourites and comfort foods, these offerings also include ready-made speciality and character cakes, made-to-order offerings, and even catering platters. Variable packaging size is key for frozen and heat-and-eat products for at-home consumption for the family as well as bigger events and gatherings. In this offering it is important to cater for your adult consumers and those smaller, often even more demanding back-seat shoppers – children.

Innovative offerings and international trends

• New York-style bagels and pretzels, German stollen and lebkuchen at Christmas, Greek shortbreads at Easter, palmiers and pasteis de nata for tea, South Africans have an international palate when it comes to baked goods. Take advantage of this willingness to experiment and introduce spicy baked goods with tastes from Africa to round out your offering.
• In terms of innovation, consumers love a twist to their baked goods, be it salty or spicy, unusual flavour combinations, or exotic ingredients.
• Plant-based offerings are also having a moment. Vegan apple muffins, vegan fudge brownies, vegan cinnamon banana bread, gluten-free banana zucchini bread, vegan chocolate chip cookies – there are many vegan options that taste as good as non-vegan that will introduce another layer to your bakery offer. Have a look at this site for some great ideas: https://greatist.com/eat/easy-vegan-baked-goods-recipes#9
• Sourdough is seeing an upsurge in interest and is finding its way into other products such as sourdough croissants, bagels and muffins.
• Artisanal and handcrafted goods are still popular and growing.

The South African spin: tried and trusted favourites

There is still a massive market in this country for the traditional South African favourites. Scones, muffins, pastries, doughnuts, iced buns, carrot cake, milk tart, koeksisters, peppermint crisp tart – tried, tested and loved, it seems there will always be a market for these bakery stalwarts. Bakeries that put an innovative spin on traditional favourites will capture the imagination of their shoppers.

Artisanal bakes, international flavours, and innovative trends are purchase drivers to be considered when retailers plan their in-store offerings.

Almost every major supplier of bread in South Africa offers a "premium" loaf. Premium breads vary in terms of crumb, slice thickness, ingredient quality, fortification with added vitamins and other minerals, and even packaging. When it comes to artisanal bakes, that premiumisation starts to include aspects such as sprouted grains, diverse flavour profiles, added protein, and pricier ingredients including seeds and nuts.

For some consumer segments, smaller sizes are also a growing trend as consumers begin to introduce mindful eating into their wellness plan – all treats have their place, including baked delicacies, however portion control is key. For others, size matters. Value = quantity + quality, especially for those with big families on a tight budget or when catering for larger groups of people.

Sustainable and eco-friendly packaging continue to be a growing concern amongst consumers. Clearly labelled, clean packaging with easy to read and informative labels are a must for your bakery. Using environmentally friendly and sustainable materials is as important as ensuring your packaging can be recycled or biodegraded, causing minimal environmental impact. Make it your mission to eliminate all non-recyclable packaging from your bakery.

Merchandising and bakery displays

Merchandising, displays, and lighting have a significant impact on purchase decisions. The bakery is a place of household staples that make it onto the shopping list every week, a destination for speciality bakes and celebratory goods, and the best kind of impulse buys – the ones where something looks just too tempting to pass up.

Value for money at the bakery

For many South Africans, the last few years have brought about economic hardship. For those desperate to simply feed themselves and their family, the most cost-effective option will always win. Late last year Business Insider (businessinsider.co.za) reported that the South African consumer price index for the bread and cereals segment increased by a massive 17.8% over a year. The cheapest 700g loaf of brown bread that the journalist could find for comparison cost R16.49. That’s a significant cost for a household staple, and many consumers will make purchase decisions based on the cost of these staples.

Bakery displays

Displaying that merchandise to its best advantage is one part technology and one part art that includes choosing the right display units, using energy-efficient ‘natural’ lighting, and creating the most appetising display possible. Customers who don’t like what they see, or who can’t see what they like, won’t make a purchase. And when it comes to occasion bakes and impulse buys, they certainly shop with their eyes first.

Analyse your bakery sales data for the best solutions

Knowing what your customers want and being able to communicate specials in a timeous and targeted fashion, requires the right technology in the right hands. Collecting, analysing, and utilising customer and sales data is an important part of efficient and effective merchandising. Partnering with the right solutions provider in this regard is important, as poor communication will cost businesses in terms of sales and footfall. With the right solutions in place, your in-store bakery can remain a place of delight for shoppers and a source of profit for the store.