An abundance of brands
Foodie culture is another big contributor to increased grocery perimeter sales. Consumers looking for higher quality or more adventurous and indulgent flavors often scan the outer edge of stores to satisfy their cravings, and they will find no shortage of new brands vying for their attention.
“‘Gourmetization’ of products is taking place more frequently in the in-store bakery,” Ms. Schmansky said. “Perimeter shoppers have more disposable income, and so the goal for bakery is to really turn that shopping behavior into a destination by carrying more gourmet, premium products.”
The tough reality for cookie and cracker manufacturers selling in grocery stores is that they are up against hundreds of other like-minded companies. And there’s only so much space in the shopping cart.
“There are so many cool, interesting new brands, and you have a lot of competition,” Mr. Sorensen said. “People might try one or two new things when they go to the grocery store, best case scenario. In my opinion, you’re competing with every S.K.U. in the store.”
Even more seasoned brands like La Panzanella are being forced to develop new products to keep pace with up-and-comers in the deli department.
“It used to be, maybe five years ago, you’d go into the deli and see cheese and charcuterie and some artisanal crackers like ours,” Mr. Lorenz said. “But over the past several years, you’ve seen things that are also alternatives to potato and corn chips, things like pita chips or pretzel thins. Those have come into the deli space where we operate and have started competing for shelf presence.”
For the in-store bakery segment, 2015 saw a significant increase in number of brands. However, that doesn’t mean that every brand turned a significant profit.
“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. They definitely still resonate with consumers, even though there isn’t as a trusted brand name attached to them.”
The challenge for cookie and cracker brands selling in the perimeter is to connect with shoppers by offering high-quality, unique products that inspire consumer trust and appeal to their desire for a well-balanced, healthy life. And if they taste good, even better.