The snack cakes and loaves sector showed great promise over the last 12 months, presumably because consumers are now out and about more, and they want individual servings or on-the-go bakery snacks to fit their busy lifestyles.

Market data
According to Chicago-based market research firm Circana’s data from the past 52 weeks, which ended on January 1, the bakery snacks category (single-serving snacks/cupcakes/brownies) brought in $4.4 billion in sales, with a 14.4% change versus the previous year.

McKee Foods led the pack, with $1.089 billion in sales, and a healthy 18.2% uptick from the year before. Hostess Brands (maker of Twinkies and other snack cakes) brought in $889 million, with a 14.2% increase from 2022; and private label snack cakes brought in $807 million, with an 8.8% change.

Source: Source: Circana OmniMarket™ Total Store View| Geography : Total US - Multi Outlet w/ C-Store (Grocery, Drug, Mass Market, Convenience, Military and Select Club & Dollar Retailers) | Time : Latest 52 Weeks Ending 01-01-23

Others of note are Mondelēz International, which brought in $212 million in sales but rose 74.3%; and Starbucks, which brought in $81 million but rose 45%. In addition, JTM Foods Inc. brought in $66 million in sales but rose 20.1%.

Trends
“Snack cakes present a broad daypart for operators to satisfy their customers, starting with breakfast and extending through all snacking occasions throughout the day,” says Paul Stippich, marketing director, Aspire Bakeries, Los Angeles. Aspire Bakeries is the parent company of the Otis Spunkmeyer brand. “Otis Spunkmeyer has identified the leading preferred flavors for snack cakes, and lemon/citrus flavors are at the top of the list. Our Otis Spunkmeyer IW Lemon Loaf Cake with Icing provides a great opportunity for operators to leverage the popularity of lemon flavor for all-day snacking.”

“Since the COVID-19 pandemic began, there has been increased consumer desire for individually wrapped snacking options that provide safety reassurance, and operator demand for offerings that require less labor and provide higher profitability,” Stippich adds.

In terms of trends, he says that Aspire Bakeries and Otis Spunkmeyer conduct primary research to collect its own data and subscribe to industry data.

“We share the insights with our customers and listen to them to gauge what they’re hearing and experiencing. Today’s consumers are facing ongoing inflation, and this is leading to high growth expectations for convenience stores, both foodservice and center aisle food offerings. With people trying to stretch each dollar, c-stores can bring the baked goods experience and foods that people want for lower cost. Snacks and desserts are universally desired and require low labor to provide,” he explains.

Tina Lambert, vice president, marketing center of excellence, Hostess Brands, Lenexa, KS, says that understanding its consumers and uncovering insights into their behaviors are the foundation for developing Hostess’s new snacks.

“We are able to spark joy for these consumers because we listen to them. We stay close to their needs, and we create great-tasting snacks they love. From our research, we know consumers are snacking their way through the day—70% of consumers are eating at least two snacks per day, and 45% of them are eating more than three. Additionally, 84% of millennial parents are looking for new snack options for their family,” she reveals.

Within the snacking universe, Hostess has prioritized five of the fastest-growing occasions, representing a $65 billion addressable market, Lambert says. These include:

• Morning Sweet Start, which is really an extension of the traditional breakfast space that includes morning snacking.
• Lunchbox, which is for consumers who increasingly are eating lunch on-the-go.
• Afternoon Reward, which is the moment after school or after work where consumers are looking for something sweet to enjoy.
• Immediate Consumption, which is for consumers that are snacking on-the-go and looking for single-serve items.
• Afternoon Sharing, which is unique because it is an occasion that involves snacking with family and friends.

Another insight is that consumers are not sitting down for regular meals as much as they did in the past, Lambert shares.

“Their lives have evolved, and they are opting for snacking throughout the day. The insight that consumers are looking for snacks that are poppable, no-mess, and portable is an important one as it relates to both our millennial parents and young adult male audiences,” she notes. “In fact, this insight was the foundation for the launch of Hostess Bouncers, which are bite-sized snack cakes that reimagine our most iconic Hostess snacks—Glazed Twinkies, Glazed Chocolate Ding Dongs, and Cinnamon Donettes. These mini poppable treats are perfect for lunchboxes or an after school or work snack.”

Consumers are telling us they want snacks that provide a multi-texture experience, both the traditional soft and creamy textures, plus crunchy and ooey gooey textures, Lambert adds: “These multi-textured snacks are what our afternoon snacking crowd is looking for—and they want treats the whole family can enjoy, both at home and on-the-go.”

Penny Patterson-Smith, senior vice president of snacking, Flowers Foods, Philadelphia, PA, says the pandemic saw snacking occasions rise, and they continue to remain at high levels, with nearly 75% of snackers enjoying snacks multiple times throughout the day.

“While the growth has leveled off somewhat from the peak of the pandemic, it is still growing. Offering snacks that can be enjoyed across multiple dayparts is a key to capitalizing on this trend. Satisfying hunger and giving oneself a treat or reward are the highest motivators for consumers to snack. That’s why we focus on creating snack solutions to meet these needs,” Patterson-Smith says.

Online grocery shopping also spiked during the pandemic, and we see that trend continuing, she adds.

“As a high impulse category, it will be important to see how the Sweet Baked Goods category adapts— from presence on the digital shelf to omnichannel marketing strategies,” Patterson-Smith notes. “[Brand] innovation always starts with the end consumer in mind. And the question is much broader than simply what the consumer wants to eat. It also involves where the consumer eats (on the go, at home, in the office), when the consumer eats, and even why the consumer eats.”

“All of these details inform the products we create and how we package them for consumption. And research is not simply one-and-done. Throughout the innovation process, we partner with our consumer insights team to help us develop and validate names, flavors, benefits, occasions, and pack types. It’s a very thorough process, to be sure, but in the end, it helps us have confidence in the innovation items we launch,” Patterson-Smith explains.

Cookies United LLC (Islip, NY) produces CakeBites, a line of premium snack cakes that includes three layers of cakes in one bite. Michael Strauss, director of marketing, says that as a privately owned company, Cookies United LLC is able to react and create on new trends much faster than other, much larger companies.

“A great example would be our partnerships with some of the world’s largest licensed properties, like Marvel, Star Wars, Minions, [and more],” he says. “In addition, consumers don’t want just chocolate and vanilla, they want more to choose from, which is why CakeBites has over 10 different flavors! We cater to everyone’s favorite flavor.”

CakeBites is launching licensed partnerships with Star Wars, Teenage Mutant Ninja Turtles, and Trolls this year.

“We are also proud to announce our partnership with Mars and their amazing brands like M&M’S, Twix, and Snickers,” Strauss finishes.

Recent innovations
“We recently launched Hostess Kazbars, a first-of-its-kind candy-bar-inspired innovation within the snack cakes market, and it is now available at grocery store and will soon be in convenience stores nationwide,” shares Lambert.

The new snack combines layers of moist chocolate cake, crème, candy crunch, and caramel or smooth chocolate fudge.

“Kazbars taps into that consumer need for a multi-textured snack. It’s the newest example of how we are constantly creating new snacking innovations at Hostess Brands. This new snack cake appeals to our biggest consumers who are looking for a delicious afternoon treat on-the-go,” Lambert explains.

Kazbars is a terrific example of how this deep understanding of our consumers—primarily millennial parents and young, adult males—led to the creation of this breakthrough cake bar, she adds.

“Kazbars started as a product for immediate consumption, targeting young men who shop in the convenience store channel. In our research with them, they talked about two major things: snacks need to be eaten with one hand and be hearty enough to satisfy a craving. After a lot of ideation with our R&D team, we created a layered cake bar that tested incredibly well with that target audience,” Lambert notes.

“Now what’s really interesting is that when we taste-tested that early Kazbars idea with young men, we also were conducting taste research with millennial parents, so we decided to have them try the product, and they loved it! Millennial parents told us they thought their families would really enjoy a smaller, snack-size version of Kazbars,” she expands.

“Now we have two major channels with two slightly different offerings as part of this innovation project: Full-size Kazbars layered cake bars for the convenience store channel for young men and a multipack of eight mini Kazbars for grocery, dollar, and mass stores for young families,” Lambert finishes.

Stippich says Aspire Bakeries works closely with its customer partners to help drive their sales and profitability by offering baked goods that their patrons love, including Otis Spunkmeyer Loaf Cakes.

“Otis Spunkmeyer Loaf Cakes are available in two flavors: Cinnamon Loaf Cake and Lemon Loaf Cake with Icing. These individually wrapped (IW) cakes are sold primarily in vending, convenience stores, and non-commercial foodservice outlets. The 4-oz. loaf cakes come in a 24-case count,” he adds.

The company has recently been focusing on expanding the popularity of lemon and citrus flavors to snack cakes, muffins, cookies, and more.

“While our Otis Spunkmeyer Lemon Loaf Cake with Icing and Cinnamon Crumb Loaf Cake are not brand-new items, we’re relaunching them after a brief recess. Low labor, comfort foods, individually portioned—these are all on-trend features. Plus, with Otis snack cakes, consumers can indulge their cravings in a more affordable and always delicious way,” Stippich notes.

Patterson-Smith says that while mainstream flavors—milk chocolate, vanilla, peanut butter, caramel—remain category kings, she is starting to see the category explore flavors beyond sweet.

“Chili and black pepper are up and coming flavors, and even cheddar cheese is an emerging flavor! I think this signals that consumers are becoming more adventurous with their tastebuds, so it will be fun to see how the Sweet Baked Goods category evolves to capitalize on these trends,” Patterson-Smith says.

Other things to watch include growing trends across categories.

“Examples include increased convenience, better-for-you foods, global flavor exploration, and the increased interest in comfort foods during and post-COVID. The jury is still out on how these will play in Sweet Baked Goods, but each will be something to watch moving forward,” she predicts. SF&WB

The company is also launching a Bakers Blend, designed as a replacement for sucrose. “It contains allulose which participates in Maillard, browns and can activate leavening. Allulose burns at a lower temperature than sucrose. To compensate, we have added erythritol to this Baker’s Blend. This creates bulk and suppresses the burn point of allulose. Since both erythritol and allulose are 70% as sweet as sugar, we use a proprietary blend of stevia and monk fruit extracts to bring the blend to parity with sugar. Lastly it contains a blend of natural fibers (soluble tapioca fiber and inulin type fibers) to emulate fat and create mouthfeel,” shares King.

With shoppers increasingly conscious about health, they will seek product choices that provide the nutrition they are looking for without compromising on taste, delivering options that are both nutritious and tasty. SF&WB