"On Special" is a monthly look at top store categories and the retailers that specialize in them.
Bakeries took a hit last year, but with COVID-19 cases decreasing and vaccinations widely available, grocers are starting to see sales sweeten in the department again.
Bashas', a family-owned grocery store chain primarily located in Arizona, had to adjust to decreased foot traffic and slower sales in 2020 in the "high-impulse" department, said Misty Abella, director of Bashas' bakeries.
The grocery chain operates several banners, including the Bashas’ Diné Markets on Native American reservations, Food City, AJ’s Fine Foods and Eddie’s Country Store, with more than 100 locations across Arizona. In most Bashas’ stores, the bakeries are situated in the front next to the deli — a location that is easy to find and allows the fresh-baked smell of its store-made doughnuts to waft out into the parking lot to entice customers, Abella said.
As customers get more comfortable venturing outside of their homes, Bashas’ has seen sales climb and is relying on its unique offerings, like its freshly made doughnuts and customized options, to keep its competitive edge.
“People see with their eyes, and they may not come in for doughnuts, but they'll leave with them,” Abella said.
With more celebrations happening, especially weddings, Abella said demand for doughnuts is strong.
“The trend was already there before Covid and it was picking up, and then Covid hit and we saw a lot of weddings get delayed,” Abella said.
Doughnut trees and walls, which Bashas’ can customize to have the icings match the color schemes, are gaining traction for weddings, while doughnut cakes are popular for birthdays, Abella said.
Bashas’ is also seeing younger customers, like millennials, trying different international flavors. “I think Arizona is real special in that way, because we get so many people from around the United States and around the world with the Grand Canyon,” Abella said.
Breakfast is booming right now, with shoppers grabbing croissants, sliceable cakes and doughnuts: “It’s amazing what muffins are doing,” Abella said. For example, Bashas’ is selling a lot of blueberry muffins, which are made fresh at the stores.
“[Customers] are looking for quality,” Abella said, adding that she expects sales to keep increasing for bulk orders for in-person events, especially at offices, schools and trailer parks, and also from shoppers who have discovered the cost savings of buying bakery items at the store rather than at quick-service restaurants.
Other top items include scratch pumpkin cookies, which are a “huge seller” in the reservation stores, and tortilla chips, which are fried in-store, Abella said.
During the pandemic, Bashas’ saw shoppers pivot toward buying smaller cakes and adding more bread to their baskets, especially better-for-you bread, while also gravitating toward smaller, single-serve items.
“There was a lot of SKU-ing down on extra varieties and making sure that we have the items that are selling out there,” Abella said. “But those pre-packaged items are still going really well, so I tend to keep on going with that and seeing where this all ends up.”
Bashas’ is keeping some of its smaller cakes in stock, even as shoppers are buying bigger ones for events, to “keep those customers that became fans of that.”
Baking from scratch
At the heart of Bashas’ bakery department is its doughnuts, which give the grocer a competitive edge — in large part, because of how they are made.
“We're really proud of the doughnuts that we do,” Abella said. “We're the only big retailer in Arizona that does it from scratch anymore.”
The doughnut mixtures are made the night before and sit out overnight to let the dough rise, a process that Abella said maximizes the flavor. Workers then fry the donuts each morning.
“If you're just heating up doughnuts that are frozen, and they've been transported to the bakeries, there's a lot of time that is spent in a freezer, and that does affect the quality of the doughnut,” Abella said.
Scratch baking allows for customization, like creating different shapes or sizes, like hearts or letters to spell out someone’s name. “We have a lot of creative people with scratch background, and so they're really passionate about what they do and they love doing these specialized orders. It makes it really fun,” Abella said.
Bashas’ has a core set of more than 40 types of doughnuts, but stores will offer additional choices to cater to their customers. One store in Kingman, Arizona, has a doughnut with Oreo filling and chocolate on top that is popular with families, while another in Sun City, Arizona, has a croissant-doughnut that visitors in the winter like.
The grocer also makes its muffins, crusty French bread, bread, cut-out cookies and angel food from scratch, Abella said.
Doughnut flavor contest
The grocer hosted its sixth-annual Donut Flavor Craze Contest this year, announcing the winners last month on National Doughnut Day on June 4. The theme was “international” to tie in with the desire for global flavors Abella is seeing, as well as the Olympics taking place this summer. Entries included Hawaiian-, Asian- and Greek-inspired creations.
The youth category winner, called the Kinder Joy Donut, was a custard-filled bismarck with hazelnut icing and sprinkled wafers. A baklava doughnut with honey cinnamon and topped on pistachios won the adult category. Meanwhile, one called the Delirium Donut, which was a custard-filled bismarck with chocolate, sprinkled pecans and a caramel drizzle, nabbed the top spot in newly added category this year for store employees.
The contest is a good way for Bashas’ to find out what appeals to shoppers and get feedback, Abella said. “I thought it was a really nice contest and generated some excitement out there.”
With the Donut Craze in the spring and paczkis — Polish doughnuts usually filled with jelly or a sweet filling — on sale at the start of the year, Bashas’ bakery team has sought new ways to mix up its doughnut selection for shoppers and employees and capitalize on its customization capabilities.
During the winter holiday season, Bashas’ sells a different, special doughnut special every week, like a saguaro-cactus-shaped doughnut with a string of Christmas lights on it, and a maple ice cream doughnut shaped like a reindeer with pretzels for antlers. There’s an eggnog doughnut for New Year’s.
There also are heart-shaped ones for Valentine's Day, a half-pound Texas doughnut for Father’s Day and a pumpkin doughnut. "Those are things that make it really fun and just a blast in the case for everybody, and we do sell a lot of those," Abella said.
With more families baking at home during the pandemic, Bashas' decided to tap into the trend by selling cut-out cookies and grab-and-go decorating kits.
During the height of the pandemic and especially during the holiday season, the kits were on display in-store and included frostings, decorations, fillings, candies and even cake toppers. Abella even saw large orders for individual kits from senior living communities.
“Those DIY kits were really important during the pandemic,” Abella said. “Things have let up now, but we continue to be able to have those items available for customers” by keeping them available for orders.
The state of the bakery perimeter in the U.S.
- After a sluggish 2020, the perimeter bakery is rebounding, with sales totaling $1.5 billion in May, up 15.8% compared to a year ago, according to IRI data.
- Among perimeter bakery sub-categories, doughnuts had the highest sales spike (32.1%) in May compared to 2020, followed by specialty desserts (29.8%) and croissants (24.1%), according to IRI.
- Sales of morning bakery items, sweet snacks and desserts declined last spring during the pandemic, according to 210 Analytics, but celebrations and events in 2021 are boosting sales, which are up 8.9% for cakes and up 7.8% for cookies over 2019, per IRI data.