Pastries hold their own; Is vending missing out on a chance to upsell?

Wellness may be grabbing the headlines, but Americans still have a sweet tooth. One product segment that continues to hold its own for most vending operators, despite the twin challenges of a recession and the wellness movement, has been pastry.

Pastry sales have taken their hit along with other vend product segments in recent years, but the Automatic Merchandiser State of the Vending Industry Report, published in June, reported baked goods sales were flat, making them one of the better performers in the candy/snack/confections segment. The only candy/snack/confections segments to outperform pastries were crackers, food snacks and nuts and seeds, all of which are much smaller product segments.

Pastries have also been price point leaders in the critical candy/snack/confection segment. Candy and snack manufacturers introduced numerous large size packages in recent years to allow vending operators to offer higher prices. However, based on data provided by Management Science Associates, which tracks item level vending sales, the only large size product to win a spot in the top 20 selling items in 2011 was a pastry product, Cloverhill Bakery’s 4-ounce Big Texas Cinnamon Roll.

The Cloverhill Bakery item, selling at an average price of $1.06 in 2011, was the only top selling item in the candy/snack/confection segment with an average selling price over $1.00, according to the State of the Vending Industry Report.

In examining baked goods sales in greater detail, 1-year sales performance varied by category. Baked goods represent the third largest candy/snack/confection segment after confections and snacks. Within the candy/snack/confection segment, the larger categories split about evenly among those that fared well and those that did not: sweet rolls, honey buns, and crème-filled snacks did well while cereal snacks, Danish, and donuts/gems fared poorly.

Given the challenged state of the vending industry, pastry sales are holding their own. This observation was shared by randomly selected operators, brokers, distributors and manufacturers interviewed by Automatic Merchandiser.

“There’s still a great market for it,” said Tim Garner, national sales manager for vending at Hostess Brands, which carries both fresh and frozen pastry. Garner admitted that the wellness movement has had an impact on the demand. He said wellness is a bigger factor on the coasts while the Midwest and Southeast remain the stronger regions for pastry sales.

Southeast sees strong pastry sales

Pastry sales have been the strongest segment in the candy/snack/confections business for Buffalo Rock Co. in Birmingham, Ala., according to Dick Hanson, executive director of sales and marketing. The region of the country he serves – the Southeast – has historically been one of the strongest pastry markets in the U.S. Nevertheless, Hanson cannot explain why his pastry sales are up 7 percent this year, leading all other candy/snack segments. The company’s overall vending sales have been flat.

Buffalo Rock mainly carries Cloverhill Bakery fresh products. According to Hanson , the Cloverhill Honey Bun is the top selling pastry item for the company, priced between 90 cents and $1.25.

Most of the accounts Buffalo Rock serves are industrial, which historically are strong pastry accounts. Nevertheless, the company has been required to follow nutrition rules in many accounts, some of which mandate 25 percent “good for you” offerings.

Randy Sikes, president of Vendors Supply, the Columbia, S.C.-based vend product distributor, said fresh pastry continues to dominate the vend pastry business in the Southeast. However, he said product quality has improved for frozen pastry in recent years. He said it is harder than ever to tell a product was shipped from the distributor to the operator in a frozen state.

Frozen-shipped pastries typically require operators to place their own expiration dates on the products after they are thawed.