With labor issues limiting the range of cakes in-store bakeries can offer, technology is playing a key role in the ordering, production, and decorating of cakes. At the same time, consumers are exploring new twists on nostalgic flavors and are eyeing cakes inspired by social media trends.
The bakery department is one of the only food departments in the grocery store that has experienced flat sales recently, said Jonna Parker, vice-president of the fresh foods client insights group at Circana. She said consumers are mindful of how they are spending their dollars and analyzing the value of each item they purchase. For the year ending July 13, perimeter cake sales were $6,254,746,847, up 1.4% from the previous year, according to Circana data. As a result of this focus on affordability, smaller-sized desserts have become popular in recent years, and in-store bakeries have responded with smaller-sized cakes and other baked goods.
Smaller cakes and cupcakes have grown in popularity as they meet the needs of smaller households, smaller budgets, and the desire for daily sweet treats, said Andrea Perez, senior manager of core portfolio total cake at Dawn Foods, Jackson, Mich. She said this presents an opportunity for in-store bakeries to keep a full-size cake business while also selling smaller products more often.
Katelyn MacKrell, associate customer marketing manager for Rich Products, Buffalo, N.Y., echoed the importance of smaller offerings like round cakes and bar cakes.
“These smaller cakes have a friendlier price point and don’t leave consumers with lots of leftovers that might go to waste, saving consumers money,” MacKrell said. “From consumer surveys, we know that consumers are still celebrating special occasions like in the past, but those celebrations are smaller and more casual.” Consumers might be enjoying many moments of celebration, but there are also numerous smaller-portion desserts competing for these occasions. To make cakes stand out, Parker said it is important that bakeries focus on showrooming and ensuring their product offerings match what is displayed in-store.
“If a store is going to want to increase their cake program, you have to have that visual impact,” Parker said. “It creates such an experience we can’t walk away from.”
This means opportunities for innovation are wide-ranging, Parker said. She said bakeries should offer cakes with not only the colors, flavors, and trends consumers expect, but they should also offer options that interrupt as well as surprise and delight consumers.
The primary challenge in producing such innovation is labor, said John Garder, vice-president of global marketing for DecoPac, Anoka, Minn.
“There’s just not enough people in the stores to do the full process of decorating a cake, taking orders, and working through the entire cake production process,” Gardner said. “(DecoPac provides) an easy way to collect online orders so you can track and respond to those and clarify questions very quickly and easily. The use of PhotoCake also allows that decorator to quickly decorate a cake.”
He said the majority of DecoPac’s designs and licensed backgrounds are intended to enable a decorator to do their work in 10 minutes or less, allowing for labor savings. The company has also introduced a tip-cleaning basket for the dishwasher as another way of reducing decorator labor time.
MacKrell said labor constraints are forcing many retailers to purchase more fully finished cakes as opposed to producing them in-house. While that saves labor, it also leads to challenges with limited freezer space. To remedy this, she said Rich’s is considering new packaging designs to remove excess space in clam shells or cake domes, and the company continues to offer a full portfolio of cake options from components to further finished and fully finished products.
“Our further-finished options still allow for customization in stores so retailers can get multiple SKUs from one product plus retailers can use their own packaging, making these further-finished items appear as if they are in-store made,” MacKrell said.
Rich’s also recently introduced a multi-layer quarter sheet cake with two layers of icing in the middle along with a layer of icing on top that is ready to be sliced into bars, squares, or individual slices.
Dawn Foods has recently introduced lemon, strawberry, and pumpkin-spice flavored cake mixes as well as lemon cream cheese buttercreme-style icing as well as strawberry flavored buttercreme-style icing.
“We developed these products to provide turnkey solutions for customers looking to capitalize on consumer demand for seasonal flavors but without the extra work of formulating, sourcing flavors or creating colors,” Perez said. “This new program makes it easier than ever to create limited-time seasonal offerings that drive excitement and impulse purchases without sacrificing quality or taste.”
Turning to technology
The days of consumers ordering all of their cakes inside a brick-and-mortar store are over, and online ordering is increasing the level of personalization possible.
“There has been a big shift in how the consumer is personalizing and ordering cakes…(consumers) are really desiring a more online-technology approach to ordering,” Gardner said.
To that end, DecoPac offers its Celebration IQ technology. Many large retail supermarkets are using the platform that allows customers to personalize their cakes through online ordering while also offering bakeries tools for order management. Additionally, it gives bakeries the ability to reduce inventory overhead costs and minimize decorating time.
“It’s making it very easy for the consumer to order instead of trying to wing it by going into a store,” Gardner said. “That level of convenience for online ordering has been a game-changer over the last two to three years.”
Parker said widespread adoption and marketing of various forms of technology and labor-saving methods will be vital to reach all generations of consumers.
“Freshness doesn’t always equal human touch, and we have to be okay with thaw-and-sell because the consumer is,” Parker said. “If the consumer wasn’t okay with low-touch, turnkey options, we wouldn’t see so much sales going to third-party UPC products.”
With that, the possibilities for cake technology are only poised to grow.
“It is absolutely possible that even if a store didn’t have an in-store bakery or staff there is technology now that could still write on your cake and decorate your cake,” Parker said. “That alone could have such a disruptive element in a retail environment.”
From ingredients to social media trends
The look of cakes is set to change as federal and state regulations are forcing the entire food industry to replace synthetic colors with more natural options, and as a result Gardner said consumers are going to need to adjust to a different look.
“What the consumer has come to expect in terms of bright, bold reds and other colors, those are going to be more muted now, and we all have to work through what that new format is going to look like,” Gardner said.
In terms of cake flavors, traditional flavors like chocolate and vanilla are still trending, but tropical and fruit flavors are increasingly being infused into cakes, especially in smaller formats, Parker said.
“Chaos cakes,” or unrefined, whimsical designs using a wide range of ingredients from Cheetos to edible flowers, are growing in popularity with 37% of consumers expressing interest in these types of products according to Datassential’s Social Media Sensations report. Datassential also found many nostalgic desserts are being reintroduced with modern updates with one such product being pineapple upside down mochi cake.
“There’s such a wide variety of cakes, and they all play well as a canvas in the ‘newstalgia’ trend,” said Renee Lee Wege, trendologist and senior publications manager with Datassential. “From pineapple upside-down cake to ice-box cakes and mashups that incorporate mochi, cakes offer a variety of ways to appeal to all generations. They’re nostalgic to older generations and new and fun to Gen Z. Playing into ‘newstalgia’-based flavors and mashups could be a strategy in driving cake sales.”
Given consumer interest in wide-ranging flavors, bakeries are staying in tune with what’s happening in the rest of the store.
“I would encourage bakeries to look at what’s trending in the produce department and what’s trending in the beverage aisle and then bring those flavors into the bakery,” Parker said.
Social media is also playing a large role in overall cake trends. Gardner said cupcake bouquets were trending this past year, and DecoPac even redesigned their cupcake bouquets offerings to play into the trend. Burn cakes have also been a viral sensation where innovation has occurred.
While the amount of labor an in-store bakery can dedicate to its cake programs is limited, technology is enabling personalized innovation without further investment in human labor. Picture cakes and new takes on nostalgic flavors will continue to drive the market forward.
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