As more people seek quick, high-quality snacks and meals, petrol and convenience retailers are transforming their offerings to include freshly baked goods, from artisanal breads to indulgent pastries.
As foodservice continues to play an integral role in redefining the customer offer in the petrol and convenience channel, bakery has an important role to play in the overall mix of food sales.
This is according to Theo Foukkare, CEO of the Australian Association of Convenience Stores (AACS), who highlights the bakery category within foodservice which has delivered double-digit growth over the last two years.
“With recent announcements by some retailers around new partnerships, I see this as a sub-category that will only continue to deliver good growth and incremental sales to retailers,” he says.
One such example was a collaboration between Coles Express and Reddy Express with renowned Melbourne bakery, Bistro Morgan.
The partnership has seen Morgan Hipworth, a 23-year-old baker and founder of Bistro Morgan Bakehouse, and his team baking products daily including doughnuts, cookies, cinnamon scrolls, and muffins, and delivering them fresh to more than 100 Express stores across Melbourne.
Anna McDonald, Fresh Food Category Manager at Viva Energy, said the collaboration is another way Viva is providing a point of difference to its Coles Express and Reddy Express customers in the Food to Go space.
“Whether you’re looking for a sweet treat for yourself, your friends or family, or a snack to enjoy with coffee, there’s something for everyone in our Bistro Morgan range,” she said.
Hipworth, who has a viral social media following of more than one million people, is a French-trained pâtissier and one of Australia’s rising culinary stars.
“This collaboration represents an exciting step for Bistro Morgan, and we can’t wait to share our passion for quality baked goods with a wider audience,” said Hipworth.
Baked bliss on the go
According to Foukkare, the early morning trade presents a key opportunity for P&C retailers to bundle bakery items with coffee or other beverages.
“For stores located in suburban areas with a strong local community and high repeat purchase customers, the bakery offer can play a very important role in building customer loyalty and retention,” says Foukkare.
“These days most quick service restaurant chains have a good bakery offer to cater to the morning on the go customer, and this is where the real opportunity lies for the P&C channel. Being able to offer freshly baked in-store, or daily delivered bakery items, can help drive bundled purchases with coffee or beverages through the 5am – 9am morning trading period.”
Foukkare notes that bakery sales now account for almost 13 per cent of all foodservice sales in the channel, and this is made up of things like doughnuts, croissants, muffins, and banana bread to name a few.
“As this space has developed over the years, some retailers have chosen to introduce exclusive brands for their customers, which has delivered significant results and has helped drive repeat purchase when the brand partnership is executed well,” he says.
Alexa King, Head of Merchandise at Viva Energy Retail, echoes this sentiment, also noting that stores located in high commuter areas see stronger sales in the mornings and during lunch hours.
“We’ve seen an increase in sales, particularly in the morning hours, as more customers opt for convenient breakfast solutions. Seasonal items and limited time offers have also contributed to this growth. More than ever, we have seen customers seeking value, with our bakery/coffee co-buys becoming an invaluable addition to our customers morning routine.”
One of life’s simple pleasures is walking into a bakery and being engulfed by the comforting aroma of freshly baked goods. The sweet, spiced scent of cinnamon scrolls wafting from the oven draws you in, instantly evoking a sense of nostalgia and indulgence.
This is an experience that Suprima Bakeries – a member of The Prima Group – is bringing to the P&C channel with its specialised frozen dough products that just need to be proved and prepared fresh in-store with minimal baking skills.
While still at a relatively small scale within the channel, Suprima has been supplying to around 300 P&C outlets and has found notable success, with the highest performing stores selling around 30-40 cinnamon scrolls per day, delivering great margin to the retailers.
Mark Stone, Business Development Lead at Suprima Bakeries, discussed how simple the proving and baking process is for their frozen dough products, and how successful they’ve been, particularly in the bp stores they work with.
“The process is simple and can be easily implemented without taking up a lot of room. It’s just following a standard operating procedure – you defrost overnight in a baking tray, and then you prove and bake, and then decorate,” he says, mentioning that a lot of the bp service stations that they work with keep the freshly baked cinnamon scrolls on display right at the till.
“With the fresh products being right there, it’s very much a discretionary, ‘oh, I’ll take that fresh cinnamon scroll because it looks delicious, and it’s just come out the oven’. Most of the feedback we’re getting is all their sales are in the morning, obviously, because when they come out, customers can smell the freshly baked products and it’s hard to resist.”
Quality is key
As the bakery landscape continues to evolve, Cremorne Street Bakers is making strides in the P&C sector, with Managing Director Michelle Blyth sharing insights into their innovative product offerings and the trends shaping consumer preferences.
Cremorne Street Bakers is perhaps best known for its Mini Munch Brownies, available in three flavours: Salted Caramel, Raspberry White Chocolate Burst, and Peppermint Cloud.
Blyth proudly notes, “We were once awarded the title of ‘Best Brownies in Australia’, and we still bake with the same high-quality ingredients and passion.”
The Melbourne-based bakery has also launched a new range of ‘Seriously Good Cookies’, designed to meet the growing demand for café-style snacks.
“Our cookies have been a staple in over 200 cafés in Victoria for the past eight years. Our PB Choc Chunk cookie, for instance, makes up 60 per cent of our café sales,” Blyth says.
While Cremorne Street Bakers is newer to the P&C space, early feedback has been overwhelmingly positive. Their products are designed for convenience, with a shelf life of 10 to 40 days, thanks to high-quality packaging that preserves freshness.
“Consumers are gravitating towards premium quality and innovative flavours, particularly in high-traffic environments.
“We’re a baking company with qualified pastry chefs who infuse care and creativity into every product,” Blyth says.
As for trends, Blyth has noticed a dual demand for both indulgent and healthier options.
“Consumers are seeking comfort in high-quality baked goods while also leaning towards nutritious choices,” she says. This balance is evident in their new offerings and their commitment to exploring seasonal varieties, such as Easter and Christmas cookies.
At Viva Energy Retail, King says they have also noticed an increased demand for convenient but high-quality bakery products.
“Convenience remains a key factor, with many purchases being impulse buys. Additionally, the coffee co-buy occasion is crucial, as many customers pair their morning bakery purchases with a coffee. Customers are also showing a preference for fresh products over frozen thaw-back items indicating that quality is key when it comes to attracting customers,” she says.
King says that at Viva Energy Retail, they select bakery products based on a combination of factors including customer preferences, sales data, seasonal trends, and supplier partnerships. She also flags that bakery products tend to sell particularly well during the holiday seasons, such as Christmas and Easter, when customers are looking for festive treats.
“We also consider feedback from store managers to ensure we are meeting local demands. Products are put through an extensive evaluation process, including blind panel testing and shelf-life validation to ensure we are delivering a delicious quality product for our customers.
“We have a strong cohort of loyal customers who purchase our bakery range as part of their everyday routine. Impulse buys, driven by the convenience and immediate availability of the products, also make up a significant portion of category interactions,” she says.
Looking ahead
Both Foukkare and King agree that we can expect to see continued growth in the bakery category, driven by innovation in product offerings and a focus on healthier options.
King says: “The integration of technology, such as mobile ordering, will likely enhance the customer experience. Sustainability and locally sourced ingredients will also become more important to consumers.
“We’re committed to continuously improving our bakery offerings to meet the evolving needs of our customers. We strive to provide a diverse range of high-quality, convenient, and delicious bakery products.”
While Foukkare looks to international trends to predict the future of the bakery category in P&C in Australia.
“In international markets we have seen P&C retailers become famous for selling fresh bread from their outlets given the proximity of stores to large communities, which has provided a base to further build their overall bakery offer. As the Australian P&C channel continues to invest in their foodservice capabilities, I believe that bakery will continue to deliver good results,” he says.
This article was written by Deb Jackson and originally appeared in the October/November issue of Convenience and Impulse Retailing magazine.
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