Americans do love to indulge in sweet baked goods. The $20 billion consumers spent in 2014 is proof of that. Cookies, snack cakes, donuts, and muffins are all popular indulgences and, according to market research publisher Packaged Facts, most people like the regular types over low or fat-free types.
But increasingly, consumers are looking for more nutritious indulgences. They want the proverbial "better for you" treats that still taste good, says Packaged Facts' new report, "Sweet Baked Goods: U.S. Market Trends."
Data in the report shows that 54 percent of adults say they try to eat health foods and maintain a balanced diet. On the other hand, 60 percent of adults say they eat foods they like regardless of calories.
And snacking is the trendy way to eat. Two-thirds of adults older than 18 agree a little or a lot that they often snack between meals. In 2015, 30 percent said they usually snack on healthy foods. One-third picked salty snacks, while more than 40 percent frequently eat sweets.
But although consumers love packaged sweet goods, Packaged Facts says the market is mature, with growth challenged by health and diet concerns, changing snacking choices, and an increased desire for fresh rather than packaged foods.
So although sales have grown by a compound annual growth rate of four percent since 2010, that growth was fueled by higher pricing more so than increased demand. Smaller products designed for snacking on the go have been extremely popular, and their relatively high price points help drive dollar sales.
According to the report, the market will continue to be challenged as consumers stay concerned about health and diet. They'll seek out healthier snacks or fresher baked goods from in-store or standalone bakeries.
Meanwhile, lower-priced private label products will pressure national brand marketers to continue innovating with product, marketing, and retail strategies.
As far as those strategies go, the report says that product trends will navigate between healthier/more nutritious and indulgent/more decadent sweet treats. Marketing initiatives will continue to use social media, hoping to target Millennials.
Retail needs to keep the center of the store exciting to prevent consumers from gravitating to the bakeries. And manufacturers should increase efforts in non-grocery channels like convenience stores, which have been growing their share of sweet baked goods sales.
So although the packaged baked goods segment has its challenges, there continues to be ways to keep customers interested.