Dive Brief:
- Despite widespread concerns about consumers' high sugar intake, the bakery snacks category's dollar sales increased by 7% and unit sales by 6% in the year ending Nov. 29, according to Information Resources, Inc.
- This includes sales growth for products like muffins (14%), packaged donuts (5%), and pastry/Danish/coffee cakes (5%).
- Hostess in particular benefited from this increased consumption. Sales for Hostess Donettes took a 31% leap over last year's numbers, and Hostess muffins saw a 21% increase in the year ending Nov. 29, IRI found.
Dive Insight:
Hostess jumped on seasonal flavor cravings by introducing a number of new varieties to its most popular categories last year, including Pumpkin Spice Cupcakes, Pumpkin Spice and Maple Glazed Donettes, Peppermint Ho Hos, and Holiday Cupcakes.
Last year, Hostess also added its own brand of breads to the portfolio mix, including white and wheat bread in addition to hamburger and hot dog buns the company sells to convenience, drug, and dollar stores, which already carry Hostess products. Instead of the typical direct-store delivery model adopted by many bread companies, Hostess' strategy is to ship the breads to retailers along with its other bakery snack products.
McKee Foods, one of the largest U.S. snack cake manufacturers with $1.4 billion in yearly sales and maker of Little Debbie, Drake's, and Sunbelt products, announced in October that the company will make a $102 million investment to expand production with new manufacturing equipment and the addition of an office building and conference center, changes the company believes will add about 50 jobs over the next five years.