As the light at the end of the economic recovery tunnel flickers more brightly, ours is a nation in transition. Today’s consumers aren’t the same as they were five years ago, and five years from now, they will be different still. Despite the changing face of the consumer, demand for bakery products remains high, and plenty of opportunity exists for bakers who recognize who the consumer is now, and plan for who the consumer will be tomorrow.

Baking Management presents 10 of the biggest trends affecting the baking industry in 2011.

Fewer launches meet with greater success

New product launches will be infrequent in coming months, as food producers exercise extreme caution in bringing new products to market. A positive effect of this caution will manifest itself in greater care in vetting potential products among different regions and demographics. If a company is going to release only one new SKU in the next 12 months, it had better be good.

In an effort to curb the new product introduction failure rate, expect food producers to employ extensive product sampling, consumer testing and focus groups.

“The impact of store brands woke up consumer packaged goods and we can expect more meaningful thought and customer input,” says Phil Lempert, food industry analyst and contributing editor with Supermarket News.

Store brands’ increasing popularity with consumers should be a shot across the bow for bakeries.

The continued rise of private label and store brands vs. national brands: 44 percent of customers saying they believe store brand products are better today than they were five years ago. Only 19 percent say it’s worth paying more for name-brand products.

If consumers can’t distinguish between a store brand and a national brand, they are going to go with the less expensive option. So they key questions bakers have to ask themselves revolve around differentiation. What distinguishes a product and allows it to stand out over the din of the bread aisle?

“Forget brand extensions as consumer packaged goods battle it out with true innovations. Expect fewer new-product introductions but more successes,” Lempert says.

Volatile commodity prices

The good news is that it doesn’t look to be as bad as 2008. Relative to three years ago, the world supply of wheat and other grains is high, so the increased stock alone will mitigate the peaks. But make no mistake that volatility looms.

The next few months are likely to be very erratic for wheat, according to Scott Custard, vice president of Moving Parts, Omaha, Neb., a commodities consultancy firm. “For both corn and soybeans, supplies are so tight that we don’t have a lot of room for error. The wheat balance sheet looks a lot healthier than either beans or corn, but having said that, wheat doesn’t trade in a vacuum. It takes a lot of its cues from corn. And corn is king.”

Corn currently holds the throne because synthetic economic pressures, namely, bio-fuels, placed on farmers on how best to use their acreage. “We’ve created a non-food incentive to produce corn, incentivizing farmers to produce it instead of wheat,” Jim Hess, Horizon Milling, told the Independent Bakers of America.

Also, Sugar has already seen high prices during the past several months. The floods in Australia along with droughts in Brazil, the world’s largest sugar producer, have led to shortages in the international sugar supply. In addition, freezing weather in Florida damaged the U.S. cane crop. Sugar hit $752.70 on the New York Stock Exchange in January, compared to $383.70 at the end of June 2008, and prices are at a 30-year high.

“We don’t have any room for error,” Custard says. “There is a way out of the forest, we just can’t take any wrong turns.”

You should have an app for that

It’s hard to believe that in human years the iPhone would still be in preschool. But four years in the tech world is enough time to spawn four generations of the device, with a fifth due out this summer, and the applications that were so groundbreaking at its original release are now cemented as a part of everyday mobile life.

Although apps are available for every smartphone brand on the market, as well as the iPad, the iPod touch and even Facebook, Apple is the de facto app leader, with more than 350,000 available from its App Store and more than 10 billion downloads racked up. Retail bakeries like San Diego Desserts and D.C.-based Cakelove have been in the app game for a couple of years now, and some may argue that apps are best left to smaller brands that can take advantage of a local presence. But apps also can be for the big boys, as some brands are showing.

In June, General Mills unveiled its Betty Crocker app for the iPad, a 2,500-recipe cookbook that expanded on the brand’s original iPhone app. In July, Dunkin Donuts launched an iPhone app that allows customers to collect friends’ donut requests and place the group order for pick up at a nearby retail location. Pepperidge Farm, which has racked up more than 45,000 Facebook fans, developed an app for the social networking site that lets users send virtual bags of MilanoR cookies to other Facebook users.

As a result of these apps, these three brands are in consumers’ minds even when they’re not at the store, watching TV or flipping through a magazine. What company doesn’t want that?

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