Bakery’s growing role in food-to-go

Baked goods and food-to-go are natural partners, but this, in our view, is of increasing importance across the sector, and we see potential for bakery to play a bigger role in future. Here are some of the ways we are seeing this coming through:

The bakery-led café concept is a market sweetspot

Gail’s in the UK is a prominent example here, but there are many others. For example in Paris and Copenhagen, there are numerous examples of this, not least in the development of Eric Kayser and Lagkagehuset (trading as Ole & Steen in the UK and the US), both domestically and expanded significantly and internationally over recent years. During safaris in Stockholm earlier this year we were struck by food-to-go developments at the bakery-led Bröd & Salt, even adding a salad bar concept into some locations, and supporting bakery with a strong coffee and broader drinks offer. We see three clear elements driving success: 1) quality bakery that tempts in its own right 2) the warm ambience the bakery feature sets for the whole store and 3) the variety of missions that bakery can flex to.

Supermarkets: bakery drives freshness and broader food-to-go credentials

Across Europe, the rollout and subsequent expansion of bakery at Lidl has, in our view, been a key factor driving its outperformance. We’re also big admirers of the M&S bakery approach, especially in smaller, more space constrained stores, where it still helps set the tone for the store as a whole. Many retailers across Europe are now looking at how bakery can be upgraded as part of driving their broader credentials – Aldi (Süd) for example is increasingly focusing on this area.

Convenience stores: increasingly recognising what bakery can bring in missions and brand associations

We mentioned the M&S approach, but there are many others who are using this to great effect. For example, in the UK, the latest concept Coop on the go store in Solihull includes this as a prominent feature of the store, and in fact dual sites bakery, both as part of the counter offer and in a more standard bakery unit, next to hot food and coffee. Of course the natural alignment of bakery and coffee comes into play here as much as in bakery/ café concepts. We see scope for further development, with growth opportunities likely to be reached through more effective merchandising/ communication and enhanced operational implementation across the market. Ultimately, our view is that most convenience stores in the longer term will be compromised if they don't integrate fresh bakery. There are a variety of ways of achieving this - one alternative is forecourt operator Q8's partnership with local bakery Meyers to get an edited range of fresh bakery on site in Denmark.

The sandwich is being elevated by better bread

In fact, this is only true for part of this trend. For the likes of Sandwich Sandwich, which has built a strong following and customer base in both Bristol and London, it’s a focus on the filling over the bread that really creates the point of difference. But at All’ Antico Vinaio, the Italian made to order chain that’s been expanding at pace across Italy, the Middle East and the US, it’s the schiaccatta bread that underpins its increasingly legendary sandwiches. More broadly however, we’re seeing more focus on breads as part of a strategy to elevate sandwiches and add value into the market. 

Bakery into food-to-go is an increasingly well-trodden path and will remain so

The growth stories of Backwerk in Germany and Greggs in the UK are both well-known, using bakery as a springboard into broader food-to-go solutions. Expect further developments across a wider range of bakeries, not least those who have high footfall locations and those who are well embedded in local communities.

The food hall opportunity for bakery could be significant

 

For us this is a really interesting opportunity. We’ve witnessed the growth and expansion of food halls across a growing number of markets – London is perhaps the best current embodiment of this. But in some destinations, and especially maybe away from major urban areas, we see potential for bakeries to be integrated in the heart of food halls. A great example of this is The Tin Building in New York, which straddles the ground between food hall and food market, but has an outstanding bakery as a key attraction. As a key, regular footfall driver, especially when combined with coffee, this adds potency to the food hall proposition - and covers typically quieter dayparts.

How will the bakery opportunity evolve?

There is lots to go for here, but themes that are relevant across the broader food-to-go sector will be highly influential - differentiation, daypart targeting, merchandising and in-store positioning as well as availability will allo have key roles to play. It is also important to think mission-first, to fulfil existing missions and - as the likes of Crumbl have done very successsfully in the US - create new ones.

Find out more about how we can support your food-to-go & food retail growth strategy, and how we can help you better understand best-in-class in your business or category - get in touch.

Want to understand the changing landscape in London and/ or Dublin? Sign up to our upcoming safaris in London on 23 September and Dublin on 13 November.