Taking flatbreads and tortillas to the next level

KANSAS CITY — Glancing at the data, it would be easy to think that the tortilla and flatbread bubble has burst, thanks to inflation, but take a closer look. Center store wraps and flatbreads show a category experiencing a 2.8% decrease in dollar sales and a whopping 11.5% drop in unit sales, according to Circana data for the 52 weeks ending Dec. 31, 2023. Melissa Altobelli, senior vice president, client insights, dairy and bakery vertical, Circana, explained that it’s all about focusing on the right place.

“Circana’s center store definition of ‘wraps and flatbreads’ excludes tortillas,” she said. “Circana places ‘tortillas and taco kits’ together within the ethnic aisle with Mexican foods. Tortillas and taco kits are actually the bulk of the segment, when evaluating tortilla, wrap, flatbread, pita and naan as a segment, and are growing 2% in units.”

When Altobelli factors tortillas in, the entire segment shows 1% growth in unit sales.

Gaze outside the center store aisles, and the picture for tortillas and flatbreads gets even brighter. Tortillas/wraps/flatbreads in the perimeter dollar sales are up 4.8% with a negligible decrease in unit sales of 0.5%.

Much of this growth is driven by rising consumer acceptance of these products as alternatives to bread, buns and rolls. Tortillas and flatbreads also benefit from their healthy halo and new product innovation for better-for-you (BFY) varieties.

Alternative staples

When compared to other bakery staple categories, tortillas are performing better in the center of the store, despite the performance of its related flatbreads in this section. Compared to tortillas and taco kits’ 2% growth in center store unit sales, center store bread is down 3% in unit sales and buns and rolls dropped 2%. Higher prices are keeping these categories afloat with 5.2% and 8.3% increase in dollar sales, respectively, for these categories. Much of tortillas’ and flatbreads’ popularity as alternatives for breads, buns and rolls can be attributed to their nutritional profile.

“Consumers continue to shift toward healthier eating, and flatbread tends to have a higher nutritional value than some standard breads,” said Karen Toufayan, vice president, marketing, Toufayan Bakeries, Ridgefield, NJ. “Tortillas and wraps can drastically reduce the carbohydrates in a sandwich, making them an easy swap and so convenient. When you combine healthy and easy into a ready-to-eat food, you can see a trajectory for growth.”

As Toufayan noted, tortillas and flatbreads may have initially benefitted from a health halo, but the convenience and versatility of these products has only increased their popularity. Consumers have become more educated on new ways to incorporate products from these categories into their meals and snacks. Tortillas, wraps and pitas have even lent themselves to the trends of portability and convenience as consumers regain mobility in the aftermath of the pandemic, and they are faced with price pressures.

“There is continued opportunity to tout the multi-functionality of tortillas as a budget-saving technique,” Altobelli said. “Using social media to show consumers the multitude of usage occasions — breakfast tortillas, flatbread as pizza crust, air fried chips, etc. — and recipe suggestions.”

A major driver for the success of the tortilla category is the growing Hispanic population in the United States. The Pew Research Center reported that the Hispanic population grew 26% from 2010 to 2022 in the United States. With a diversifying US population, cuisines from around the world become more normalized, starting with the United States’ neighbor to the south.

“Surveys show that Mexican cuisine is one of America’s favorites, so using tortillas and wraps at home to amplify a meal or to wrap up a healthy alternative the next day is becoming a weekly staple added to the shopping list,” Toufayan said. “When you add in the globally inspired recipe opportunities and ready-to-eat capability of flatbreads, global cuisine interest is a driving factor for the category.”

Much of this inspiration is coming from the foodservice sector, and while many consumers are cutting back on eating out, they are still bringing home the ideas and flavors of their favorite restaurants.

“International aisles at grocery stores are not only where immigrants find the foods that remind them of home, but they are a normal part of the shopping experience for many consumers who like to find new flavors,” said Jose Carillo, head of marketing, Tia Lupita Foods, Tiburon, Calif. “These global cuisines are influencing tortilla sales. Today it is OK to turn anything into a taco. Just search online for fusion taco recipes and you’ll find Korean-, Thai-, Indian-inspired recipes.”

How low can you go?

While consumers typically perceive flatbreads and tortillas as having fewer carbs than a typical slice of bread or a bun or roll, there is still a movement to see how low carb these products can get.

“Center-store tortilla and taco kit growth is being driven by Mission Foods, private label and Guerrero,” Altobelli said. “Both Mission’s and Guerrero’s growth are from the launch of zero net carb sub-brands. Mission Carb Balance — 2 grams of net carbs — also continues to show growth.”

While these low carb options are growing, she quickly pointed out, however, that regular and original tortillas and flatbread varieties still account for the majority of sales.

“I would expect continued expansion in BFY options, which are driving growth in the tortilla category in particular,” she said.

And that seems to be where innovation is carrying the category. Gruma brand Mission Foods debuted its Zero Net Carbs line in 2022 with Original and Sundried Tomato Basil and expanded it in 2023 with a Sriracha Ranch variety. For its Carb Balance portfolio, for the carb-conscious consumer, Gruma, Monterrey, Mexico, added a Chipotle fajita-sized tortilla with 1 gram of net carbs per serving and a Flour burrito-sized tortilla with 4 grams of net carbs.

In its Q3 2023 earnings call with investors, Gruma characterized the demand for products as quite positive, especially the BFY portfolios. In the United States specifically, the 2% sales volume growth for the tortilla business was driven by Gruma’s BFY product line and corn-related tortilla products.

Other brands have also taken notice. Toufayan Bakeries launched its own keto-friendly pita, wraps and flatbread in 2022 and expanded distribution of that line in 2023.

“At Toufayan Bakeries, we are committed to staying ahead of consumer trends and providing great-tasting products that align with a wide variety of dietary preferences,” Toufayan told BakingBusiness.com. “The popularity of the keto diet presented an exciting opportunity for us to meet the evolving needs of our consumers. We’re really proud of these great-tasting breads made by our family for yours.”

While low carb and keto may be the health darlings of the moment, the definition of BFY extends beyond carbohydrates, even for a bakery product, which opens up a wealth of options for brands and formulators. In addition to keto-friendly options, Gruma’s Mission Foods brand has launched protein-enhanced tortillas that also deliver a lot of fiber. The brand also offers gluten-free tortillas that feature traditional corn, cauliflower base or a flour tortilla alternative.

“Just like in other categories, BFY has been driving a lot of growth in the tortilla category,” Carillo said. “There are multiple brands that have been innovating for a long time with attributes like gluten-free, low carb and added fiber, which make consumers feel better about incorporating tortillas into their meals.”

Tia Lupita Foods was first founded as a hot sauce company to bring founder Hector Saldivar’s mother’s hot sauce to the United States. The company expanded into BFY tortillas so that everyone could enjoy tacos without the guilt. The company’s reduced carb and calorie tortillas are made from cactus flour.

“Consumers love tortillas for their tacos, burritos and wraps, but they are also watching what they eat, which means brands need to find a way to deliver the right balance of flavor and nutrition just like we did at Tia Lupita,” Carillo explained.

The company also partnered with Renewal Mill to bring upcycled okara (soy pulp) flour into the formulation to go a step further and make the products more sustainable. Carillo believes that alternative flours like cactus and okara are here to stay, though he admits only some will have staying power.

“Alternative flours like almond, coconut, chickpeas, cassava and, in our case, cactus flour are leading the charge to deliver grain-free alternatives,” he said. “But there are also brands taking the approach of adding ingredients like turmeric, herbs and spinach to justify BFY claims. I think alternative flours are here to stay, and flavor innovation will continue, but I don’t see many of those products sticking around for too long.”

These alternatives can require some education through packaging, marketing campaigns and even influencers on social media. The more products adopt these ingredients, however, the more staying power they can garner. The good news for Tia Lupita and other brands like it is that health-conscious consumers are willing to try new items, and they’re loyal, which can be a blessing and a curse.

“BFY consumers are not afraid of trying new ingredients and products; they are adventurous,” Carillo said. “The challenge is that once they find a product they love, it is hard to make them switch. So, the learning curve is steep because there is a need to break existing habits, plus the higher price point of this type of product is also a barrier. The consumer thinks, ‘That sounds good, but it’s not cheap. What if I buy it and I don’t like it?’ ”

Freshness of flatbreads

While BFY may be one prong of the success for tortillas and flatbreads, the other prong has to be freshness and authenticity. While tortillas may be pulling along the center store sales, in the perimeter, it’s a completely different story. The perception of freshness and authenticity exuding from the supermarket perimeter is a perfect complement for these bakery items.

“Tortillas and flatbreads’ success in the perimeter is driven by naan and pita,” Altobelli explained. “Growth in naan and pita forms are compensating for declines in flatbreads, wraps and tortillas.”

She pointed to Toronto-based FGF Brands’ Stonefire Authentic Flatbread as the leader in naan, and its flavored varieties — Garlic, Everything and Caramelized Onion — as the biggest drivers of growth. For pita, the leader is Joseph’s Bakery, Lawrence, Mass., a family-owned bakery with an American-dream story.

“Joseph offers an authentic Syrian recipe,” Altobelli said. “Their Original pita is driving growth along with their healthier varietal, which is flax, oat bran and whole wheat.”

Flatbreads benefit from the authenticity that comes with family-owned bakeries founded by immigrants like Joseph’s Bakery and Toufayan Bakeries. While consumers are looking for something fresh, premium and authentic, a family recipe speaks volumes.

“Rather than going out and coming up with crazy new flavors, I think there’s actually a lot of focus on being retro and going back to more original, authentic, traditional types of flavors in tortillas and reversing the trend of everything being all modern and high-tech,” said Jim Kabbani, president, the Tortilla Industry Association. “It’s about the flavor, the texture and appearance.”

While a family story and recipe can ground a brand and company in the flatbread space, Toufayan noted that it’s important not to rest on your laurels.

“Innovation is not always techy,” she said. “For us, innovation is often in service of high-quality, freshness and variety.”

So why are naan and pita leading in the perimeter over flatbread and tortillas? Altobelli attributed that largely to price. Flatbreads and tortillas saw more significant price increases than naan and pita products. While tortillas performed very well in the center store, naan saw less than 10% of its sales from the center store because that simply isn’t where consumers look for those products.

Much of this perimeter success also goes back to the theme of the past year as well. Shoppers are eating out less. Even Circana’s December 2023 survey found restaurant traffic was down six points compared to November.

“We know that 85% of meals are being prepared at home,” Altobelli said. “Consumers want out-of-home quality and taste at home, which lends itself well to perimeter bread categories.”

With consumers more interested in tortillas and flatbreads and the quality and authenticity they bring to a dinner table, it’s no wonder these staples are finding their way into more and more shopping carts.

Companies help consumers scale the learning curve for flatbreads

Flatbreads and tortillas are the bakery staples of their native cultures and are as versatile — if not more so — than a loaf of bread. Part of these products’ staying power in cross-cultural shopping carts has been showing consumers all that they can do.

“We have a dedicated marketing team entirely focused on ensuring the best experience for consumers throughout their interaction with the brand, from in-store to online to at-home,” said Karen Toufayan, vice president of marketing, Toufayan Bakeries, Ridgefield, NJ. “We take great care with branding, packaging, product innovation, usage inspiration and online interaction to share the incredible versatility of these products.”

With the power of today’s marketing, that consumer education has never been easier. Social media as a pinboard for recipes have opened a door to getting the word out in a personal way.

“Influencer recommendations continue to drive more than 60% of purchase decisions for consumers according to recent Sidekiq research, so we’ve always partnered with influencers on multiple levels: from the mom-next-door micro influencer to macro influencers with millions of followers and multiple platforms,” Toufayan explained.

For Tia Lupita Foods, Tiburon, Calif., consumer education is more focused on explaining its ingredients: cactus flour and upcycled okara flour.

“At Tia Lupita, we know we are in the very early stages of educating consumers on the benefits of cactus and why we are adding it to our tortillas and tortilla chips without sacrificing taste,” said Jose Carillo, head of marketing for Tia Lupita.

As an emerging brand, Tia Lupita still benefits the most from trialing its products in grocery stores.

“We are confident that our tortillas have really good nutritional facts, but just talking about the benefits is not enough,” Carillo said. “We show consumers that they also taste great. We have to get creative and find ways to get our products in people’s hands so they can experience it themselves.”