The Rise of Bakery Cafés

Features

31 October 2011

In a zero-growth environment, this fast-casual sub-segment continues gaining market share.

The bakery-café segment, which accounts for $5 billion in annual sales and more than 3,600 units nationwide, has successfully navigated the middle ground between quick- and full-service restaurants to outpace industry sales and unit growth for each of the past three years, during which total bakery-café units increased 4.2% and F&B sales increased 12%.

According to Chicago-based Technomic, consumers are fueling growth in this fast-casual sub-segment by visiting bakery cafés in larger numbers and becoming frequent customers once they visit. Seventy-one percent of consumers have now visited a bakery café, up from 43% in 2008, and nearly three-quarters of those consumers say they visit bakery-café concepts at least once a month.

Wraps and sandwiches featuring artisanal breads are a primary focus of bakery cafés’ menu positioning. A look at the most prevalent bread types for lunch and dinner sandwiches shows tortillas as the most-frequently-mentioned sandwich bread. Focaccia, positioned as a European-style artisan bread variety, ranks second. Ciabatta, sourdough and pumpernickel have all increased significantly on bakery-café menus since 2008.

The service element seems to be particularly important to users of bakery cafés. Three in four consumers (75%) report that the quality of service is very important when deciding which bakery café to visit, and about two-thirds (66%) consider the speed of service to be very important

St. Louis, Mo.-based Panera Bread is the clear leader in the segment. Founded in 1981, the chain now boasts nearly 1,500 units in 40 states and Ontario under the Panera Bread, Saint Louis Bread Co. and Paradise Bakery & Café names, and in 2010 was among FORTUNE magazine’s list of 100 Fastest-Growing Companies. The chain forged its identity by offering

hand-crafted, fresh-baked artisan bread and, today, made-to-order sandwiches, tossed-to-order salads and soup served in bread bowls, as well as breakfast items such as egg soufflés. Nearly 70% of Technomic’s 1,500 consumers polled visit and purchase food from the chain at least occasionally, and among Panera’s visitors, 69% go at least monthly.

“Bakery-café chains continue gaining market share in a zero-growth environment,” says Darren Tristano, executive vice president at Technomic. “More consumers are visiting these restaurants and are gaining familiarity. As more units open and as marketing efforts continue to boost awareness, there is little reason to think the segment will not continue to perform well.”