Consumers Baking Up a Storm: Our Conversation With Karen Colberg, Co-CEO of King Arthur Baking
Not long ago, at the height of COVID-19’s impact, consumers were sheltering in place at home, and while we were busy tracking visible changes in grocery shopping, pantry loading and home cooking, they began to bake up a storm. The signs were evident in nearly all supermarkets — where baking aisle shelves were empty — and also in diverse media where topics like sourdough and banana bread were red-hot. To find out more about what it’s been like to be at the center of a world where suddenly flour, yeast and other baking ingredients were in short supply and heavy demand, we turned to Karen Colberg, Co-CEO of King Arthur Baking, one of the oldest and most respected brands in the baking category.
The Hartman Group (THG): All things connected to baking — in particular, flour and yeast — took center stage just as the pandemic shifted into high gear: Adweek noted that King Arthur Baking's sales shot up 2,000% in March 2020, just as flour and yeast began to disappear from nearly all sources. To that end, we recently surveyed consumers and found that 39% are baking desserts and treats more often since the onset of COVID-19. Have you experienced ongoing demand for baking ingredients?
Karen: I want to start by clarifying that the 2,000% increase represented sales of one item on the King Arthur Baking Company website. This was not reflective of flour sales at grocery stores. That said, the demand for all King Arthur Baking signature flours, but especially All-Purpose and Bread Flour, were unprecedented in March, with sales more than double of what they were in March 2019. And the answer is yes, that demand continues. Year to date, our flour unit sales are up over 60% versus prior year. We have made some significant supply chain changes to accommodate this continued demand for flour:
• Added new mills to our network and new packing capabilities for added flexibility.
• We are launching two new flour SKUs — 8lb All-Purpose Flour and 8lb Bread Flour — to help meet surging eCommerce demand. Both items will be packaged in a stand-up pouch bag to provide a more shippable option for flour and will be sold on KingArthurBaking.com and Walmart.com. For Fall 2020, we will be producing 2 times last year’s demand for 5lb All-Purpose Flour and 3 times last year’s demand for 5lb Bread Flour.
THG: Related to the previous question, what does demand look like today vs. before the pandemic? For example, we've seen consumers improvise a lot with their ingredients because of out of stocks and issues with getting to the grocery store. Have you seen signs of improvisation within the items you sell — for example, increases in demand for wheat-alternative flours?
Karen: Consumers called our Baker’s Hotline and flocked to our website looking for help with recipe substitutions, especially earlier in the pandemic when many staple ingredients were hard to find and people were asked to shelter in place at home, getting by with what was already in the pantry. In fact, how to substitute other types of flour for all-purpose was one of the hottest topics bakers wanted to talk about when calling our Baker’s Hotline, maybe only second to sourdough questions. Along those lines, we believe there was a wave of bakers turning to sourdough due in part to a yeast shortage and the desire to still bake at home. We also had a wildly popular blog on our website titled: What to bake if you run out of ingredients.
THG: Consumers are spending a great deal more time investigating recipes, baking more and in general have been rediscovering cooking and their kitchens: Your website and catalogs offer a wide array of recipes and both food and non-food baking ingredients and kitchen tools — have you seen any shifts in demand within recipes or product lines or have there been surprises in terms of demand that seem to be pandemic-driven?
Karen: In recent months, baking has become a national pastime. Those who previously baked a few times a year are now baking a few times a month or more. To meet the needs of experienced and beginner bakers alike, we put an enhanced focus on our already robust baking education resources — virtual classes, video, recipe collections, and baking guides — allowing us to engage with bakers everywhere in a meaningful and educational way. As always, we remain intent on helping bakers bake their best and fostering community through baking.
Demand for baking content and products has been up across the board with the top pageviews for recipes going to sourdough and bread and pizza recipes. The top two recipes over the past 6 months have been Sourdough Starter and Sourdough Pizza Crust.
In addition to all the flour, ingredients, and baking mixes people have been purchasing, they have also been buying hard goods, such as storage containers, to store all that flour, and parchment paper, which is likely a convenience factor — no mess, no fuss with cleaning pans!
THG: Many foods and beverage brands have only just started to sell direct to consumers, but King Arthur has had a catalog for some time. What has it been like to be at the center of a red-hot category that sells both direct to consumer and through food retail?
Karen: We start from a place of wanting to teach people how to bake. We launched our catalog, bakery, and school decades ago to bring our baking passion and hundreds of ingredients and tools to bakers everywhere. Over that time, we have built a deep and enduring connection with our customers that is at the heart of what we do and who we are. So, in this time of the pandemic, we’ve strived to not only help our customers find flour, ingredients, and recipes but also to listen and share stories of baking. We feel fortunate to have these relationships and do not take them lightly.
THG: You've recently changed the company's name from King Arthur Flour to King Arthur Baking: This seemed like an effort to speak to a much larger "world of baking" than one relegated to a single ingredient. Was that part of the thinking behind the name change? Would consumer interest in specialized diets speak to this as well, given the rise of interest in paleo/low-carb/grain-free, and not to mention gluten-free?
Karen: We’ve been thinking about this update for quite some time, and our rebrand to King Arthur Baking Company began in earnest 18 months ago. We embarked on a brand research and creative strategy process, centered on our commitment to sharing the love and joy of baking. The new positioning as a baking company will enable us to continue to grow and welcome all bakers, from lifelong to beginners, from paleo to gluten-free.
THG: With flour moving away from being a primarily commoditized ingredient for many home bakers, how do you see King Arthur playing a role in appealing to consumers seeking more transparency and deeper narratives in flour and other baking ingredients? What about your Certified B Corporation status and the shift to being employee-owned: How do you see those designations connecting to home bakers now and going forward?
Karen: As an employee-owned B Corp, we believe in harnessing the power of baking to make a difference — for people and the planet. We have core values and beliefs that guide our decision making, whether it has to do with seeking the highest-quality ingredients, reducing the environmental impact of our business, or fostering a more inclusive community. We think consumers have a right to know about the company and people behind the products and to align their purchases with their values. We strive to be transparent and recognize our successes and opportunities to do better.