September 2011/Prepared Foods -- Whether it is a continued love of comfort foods, finding comfort in indulgence or rooted in a renewed focus on eating at home, Americans continue to buy prepared cakes and pies through FDMx (food, drug and mass marketing) channels. While the market did experience a slowdown in 2007 and 2008, overall, there was an increase of 19% from 2005-2010, and sales reached $2.4 billion last year. Furthermore, Mintel’s projections suggest the market will continue to grow through 2015, by more than 5% annually-- driven in part by renewed consumer confidence, as the economy improves, and as consumers begin to worry a little less about every cent.
Consumer trends driving the market are a continued need for convenience and, to some degree, less focus on fad eating, such as the low-carb diet. There are, however, clouds on the horizon. Continued innovation from in-store bakeries will impact packaged sales, as the perimeter of the store grapples for attention with added freshness and mid- to premium-range products that appeal to a “treat mentality” for the shopper looking to take home something special. While Mintel has seen sales through in-store bakeries fall from 2008-2010, their ability to develop new products quickly, lower cost of innovation and easy ability to see what works in their locale certainly gives them a potential edge. In addition, while Mintel does not expect the cupcake trend to provide significant competition, the explosion of cupcake stores is symptomatic of the potential for new competition to quickly appear.