Finding success in the perimeter

by Dan Malovany
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Fresh-baked cookies from supermarket bakery
The perimeter of the store is where growth is happening for cookies and crackers.

According to Nielsen research, cookies sold in the perimeter of stores generate $1.2 billion in annual sales. This is up 7% in dollars and 4% in volume over the last year. Similarly, crackers sold in the perimeter are up 7% in dollars, 6% in volume and made up 74% of deli snack dollars spent in the same time period.

“The perimeter of the store is where growth is happening, whereas center aisles may be stagnant or may be overloaded with a bunch of brands,” Sarah Schmansky, director, business operations, Nielsen, recently told Matt Hamer, Baking & Snack’s multimedia editor.

One major force driving consumers to the periphery of the store is health and wellness. Surprisingly, that opportunity is still largely untapped by in-store bakeries.

“Of all in-store bakery sales, about 95% of items have no declared health benefit attached to them,” Ms. Schmansky said. “But when you also take a look at the demographics that are buying bakery goods, older consumers have special interest in health and wellness and better-for-you products. There’s a real opportunity to capture those consumers.”

In-store bakeries, she added, are selling more branded products as retailers search to offer more variety. Hitting a home run in this channel, however, isn’t easy, but it is another opportunity for smaller businesses.

“Although more than 1,000 brands were sold last year across the country in in-store bakeries, only four had sales greater than $100 million,” Ms. Schmansky said. “Unbranded and private label still hold the largest share within in-store bakery.”

As the holidays hit full stride, look for more companies to quietly find success in the perimeter of the store with seasonal and limited-time offerings. 

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