Sure, times have been rough in the past several years. However, despite that fact—or perhaps, thanks to consumers looking to relieve stress through sweet treats, because of it—numbers in various categories of bakery desserts have largely given producers reasons to celebrate.

“Sales have been very strong this past year; our consumers trust the Eli’s Cheesecake brand and our retailers have shown tremendous support,” remarks Debbie Marchok, vice president of marketing, The Eli’s Cheesecake Co. “We are continuing on our growth track this year, too.”

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 03-26-23

Market data
According to data from Circana OmniMarket Integrated Fresh, Chicago, for the 52 weeks ending March 26, 2023, most dessert subcategories had modest to notable climbs. For example, the increasing resurgence in in-person celebrations and other factors likely contributed to in-person cake sales, perimeter, and center store. Perimeter layer cake sales were up by 7.3% compared to last year, reaching about $1.72 billion for the 12-month period. Private label led the way and also held most of the sales for the subcategory (it increased 7.6% and had $1.53 billion in sales), and while Rich Products layer cakes stood in second with $35 million, the company’s products had a double-digit increase (14.4%). Center store layer cakes, with much lower sales compared to perimeter layers at $27.5 million, saw a slight decrease (1.5%) for the period.

While the increase seen in the perimeter sheet cakes subcategory (just 1.4%, to $611.2 million) might not seem like good news, it is a very bright spot compared to the 12% loss posted for the previous 12-month period. Private label holds another top-of-the-list position here, with $578.4 million of sales (up 0.9% compared to the last 12-month stretch). The top brand in the column, Twinstar Bakery, fell 16% to 9.3%.

The various pie subcategories also saw increases. Perimeter whole pies, for example, were up 4.9% to $839.96 million, with private label products once again on top (up 7.1% to $647.6 million). Top brand performers in the whole pie column include Jessie Lord Bakery (down 8.7% to $34.8 million) and Table Talk Pies (down 4.3% to $34.2 million).

Looking back
Dessert producers continue to reel from the punches thrown by COVID-19, forcing them to find ways to adapt to the challenges as the months roll on. However, according to Ann Boyd (director of the Desserts Category Business Unit for Rich Products), companies like hers have pivoted as needed.

“It’s no secret that the past few years have brought challenges to the market, driven in large part by the pandemic, which impacted everything from the economy to global supply chain to consumer shopping behavior,” she says. “Early in the pandemic, our immediate focus was ensuring the safety of our associates to continue to deliver for our customers. From there, we navigated global supply chain disruption, which enabled us to build even stronger systems and networks. On top of that, shopper behaviors changed, becoming more focused, digitally enabled and omnichannel, which allowed us to create new solutions for our customers.”

“One of the hallmarks of Rich Products is our ability to embrace change, something we’ve done consistently and successfully for more than 78 years,” Boyd continues. “So, while the market experienced unprecedented levels of disruption, we focused on innovation, collaboration and partnership to continue to deliver for our customers around the world. Our relationships and partnerships with our customers and associates strengthened and innovation—something that is central and foundational to Rich’s—is stronger than ever.”

Marchok says producers offering premium-leaning items faced more than their share of obstacles.

“As a premium dessert, we are true to our roots and continue to use the same high-quality ingredients in baking our cheesecakes; the key challenge over the last 12 months has been to minimize price increases at the same time production costs from ingredients to packaging to labor have increased significantly,” she shares. “For example, we try to source our ingredients locally or within the Midwest whenever possible. When the supply chain was tight last year, we sourced our AA butter from across the country paying significantly more for the ingredient. Our retail customers are extremely supportive and have worked with us so we can continue to bake our products with the same high-quality ingredients and taste our consumers expect from Eli’s.”

Marchok adds that individually packaged slices of Eli’s Cheesecake desserts continue to resonate with customers, a book retailers have been taking a page from by taking slices from whole cakes and placing them in clamshells for bakery self-service.

Looking forward
For the most part, producers appear to be positive about the coming year in terms of dessert product performance at retail.

“We are definitely optimistic for desserts in the next year,” remarks Marchok. “Celebrating with desserts, small indulgences and dessert experiences will continue in the next year.”

Boyd says that desserts should enjoy strong performance in coming months, with consumers seeking ways to deliver little rewards through sweet edibles.

“Now, more than ever, consumers are drawn to indulging treats—let’s face it, after all we’ve been through these past three years, life deserves dessert!” she remarks.

Emma Kelchin, senior product manager of Rich Products’ Desserts Category Business Unit, shares several trends to watch in desserts:

• Goodbye to the “ordinary.” When it comes to desserts, consumers crave high-value, indulgent, share-worthy deliciousness that they can brag about to their friends.
• Snacking, snacking, snacking. Consumers crave dessert-inspired snacks with sweet flavors.
• Size variety. In addition to larger-sized desserts for big gatherings (which are back), smaller size dessert offerings for every day will continue to be popular.
• Health and authenticity that sacrifices nothing. Ingredients aside, dessert must still deliver taste and quality.
• Simplification and differentiation. Labor is never going to be better than it is today, so retailers are focusing on easy execution and dedicating scarce labor to the areas that will earn them credit. When it comes to the cake and dessert case, they’re prioritizing the most winning assortment with clear differentiation.

Boyd also advises producers should look for growth drivers that focus on delivering real value to consumers, in both special moments and everyday occasions, and that connect on other shopper interests in the category.

“Coming out of the pandemic, consumers and retailers alike crave innovation,” she says. “Everything from new flavors and new interpretations of old classics to authentic ingredients and seasonal flavors are all driving growth. Additionally, consumers view wellness holistically, prioritizing health of mind, body, and soul. Desserts are good for the soul and we’re seeing that reflected in the market.”

Marchok concurs that health and wellness concerns will continue to play into dessert shopping choices, a trend producers should keep in mind.

“Consumers’ interest in plant-based ingredients and free-from ingredients such as artificial flavors, colors and preservatives will continue,” she says, adding that shoppers likely will show a growing interest in the health of the planet, seeking out upcycled ingredients in their dessert purchases.” SF&WB

NEW DESSERT PRODUCTS on snackandbakery.com