When the highlight of the year is the bankruptcy of a major player, as was the case of Hostess Brands in 2012, it is going to be a rough year. That pretty much describes 2012 for baked goods, including cookies and crackers.

New product introductions lost altitude like balloons the day after New Year’s Eve. Launches of new baked goods (including bread and rolls, cakes, pastries and morning goods) dipped 37.3% in 2012, says Datamonitor’s Product Launch Analytics. Cookies and cracker launches dwindled, too, dropping by 51.1% and 34.5%, respectively. Looking past the drop in new products, a lot of new product action still managed to set the market up well for 2013 and the future. 

Make no mistake, ancient grains continue to be a top flavor and ingredient story in bread products. Indeed, this is part of a long-term health makeover for bread. According to the “Shopping for Health 2012” survey, sponsored by the Food Marketing Institute, 55% of U.S. grocery shoppers have switched to whole-wheat or whole-grain bread since 2010. In addition, 33% of consumers say they are concerned about the presence of protein on product labels, up 10 points since 2009.

No doubt, consumers are reading product labels more closely. This, combined with the trend toward higher protein foods, seemed tailor-made to set the stage for ancient grains in 2012. Examples include One Degree Flax & Spelt Bread, Nature’s Path Heritage Ancient Grains Bread and Van’s Natural Foods 8 Whole Grains English Muffins (with millet, buckwheat, flax and more). The trend transcended national borders, with Wickbold Chia & Macadamia Bread launching in Brazil.

Additionally, ancient grains got a helping hand from continuing interest in the gluten-free concept. Gluten-free baked goods (excluding cookies and crackers) rose from 3.6% of launches in 2011 to 8.4% in 2012, says Product Launch Analytics.

Flax is a rising star in bread and is popping up as a headline ingredient with growing frequency. That was the case with Flax4Life Flax Sandwich Buns, Udi’s Gluten Free Foods Omega Flax & Fiber Bread and Food for Life Ezekiel 4:9 Sprouted Flax Grain Bread. Flax contains plant-based omega-3s, although it is not clear how much this matters to consumers.

The “Shopping for Health 2012” survey found a 1% decline in the percentage of U.S. grocery shoppers saying omega-3s are “of concern” when examining product labels between 2010-2011. Specific health claims aside, flax can help communicate that a product may be less processed and more “natural.” This can resonate with shoppers, as nearly half (49%) say they are buying fewer processed foods, says “Shopping for Health.” But, the question remains: How many can identify the specifics behind this sentiment?

No matter, baked goods makers were helping with that. Breads formulated with seeds say “less processed”—this is demonstrated by Whole Foods Market’s Bakehouse Seeduction Bread with sesame, millet, pumpkin and poppy seeds. Another tactic was to highlight ingredients closely associated with health, like oatmeal. Kellogg’s Pop-Tarts Oatmeal Delights Toaster Pastries took this approach.

Leaving ingredients out was yet another way to go, something picking up steam for weight-loss diets. Regimens, such as the “paleo” or “paleolithic” diet eliminate entire classes of foods, like grains and legumes.

Reflecting the spirit of this “simple food” movement, Kellogg added Simply Eggo Waffles to its lineup in 2012. The frozen waffle contains no preservatives, artificial flavors or colors. Interestingly, Kellogg does not make any quantitative claims about the number of ingredients used, something just beginning to be employed for products from ice cream to pet foods.

Also buttressing the “less is more” concept were flatbreads. Bread went flat with Amy’s Organic Sandwich Rounds and Arnold Pocket Thins Flatbread. One trendy type of flatbread now making waves on the sales front is naan bread. This Indian bread is versatile and ideally suited for use with spreads such as hummus. 365 Everyday Value Tandoori Naan Bread, made from an “authentic Indian recipe,” was just one naan entry.

Turning to flavors for baked goods (outside of cookies and crackers), 2012 was a stellar year for cinnamon- and brown sugar-flavored products. Cinnamon topped the flavor charts, while brown sugar clocked in at the number six spot, per Product Launch Analytics. That is impressive, since brown sugar was not even within shouting distance of the top 30 list of flavors in 2011.

SuperPretzel Sweet Cinnamon Fully Baked Sweet Soft Pretzels; Kellogg’s Pop Tarts Frosted Brown Sugar Cinnamon Mini Crisps; and Nice! Topped with Brown Sugar Streusel Coffee Cake from Walgreens show where this flavor trend is headed. The move toward sweeter flavors is also relevant for breads like Pepperidge Farm Strawberry Banana Flavored Swirl Bread. Could aromatic flavors be next? The UK launch of Heston from Waitrose Hot Cross Buns in an Earl Grey & Mandarin flavor makes scent a possible major selling point.

Two other flavor developments bear watching. The first is the red velvet flavor, a trendy red-colored cake that seems to fly in the face of consumer preferences for natural flavors and colors. However, the popularity of the dessert on restaurant menus aided launches like Weight Watchers Red Velvet Crème Cake and Entenmann’s Red Velvet Iced Cake. 

The second flavor trend is the use of ingredients or flavors that are healthful, but with no taste compromise. Ingredients like yogurt (including Greek yogurt), Kalamata olives and more made an impression. Nice! Blueberry Greek Yogurt Cake from Walgreens was on-trend, along with Uncle Wally’s Smart Portion Muffin Tops, a frozen product baked with real yogurt and probiotics. Kalamata olives are a novel addition to Fresh & Easy Bread, a non-sliced product.

Pretzel breads have popped up from time to time, with 2012 introducing Arnold Pretzel Rolls. This could be an emerging trend in 2013, with the Wendy’s fast-food chain now testing a pretzel bun for its Bacon Cheeseburger. If it takes off, pretzel breads could pop.

Thanks to natural tie-ins with snacking, cookies and crackers tend to be prolific new product markets, but both were down in 2012. Even so, some trends gained momentum in 2012. Whole grains seem to have topped out in breads, but they are still rising in cookies and crackers. Datamonitor’s Product Launch Analytics says that 8.2% of 2012’s cookie launches contained whole grains, up from 5.1% in 2011. It was the same for crackers, with 21.9% of 2012’s launches using whole grains, up from 17.4% of launches in 2011.

Leading the whole-grain charge was Nabisco belVita Breakfast Biscuits, a new sustained energy “biscuit” sold in the cookie aisle that attempts to extend Europe’s breakfast-biscuit concept to the U.S. Oats also scored for whole grains with Quaker Crunchy Oat Granola Cookies in multiple flavors. 

Granola seems to have multi-category growth ambitions, similar in many ways to Greek yogurt. That explains Lance Fresh Cracker Creations Crunchy Granola Crackers with a Creamy Filling—sandwich crackers with 14g of whole grains per serving. Lentils are also promising, with Mediterranean Snacks Lentil Crackers claimed to be richer in protein than most. Flax headlined new Flackers Flax Seed Crackers, developed by a medical doctor looking for a way to boost flax consumption.

Can there be a balance of indulgence and health when the two concepts seem to be mutually exclusive? Time will tell, with Suncore Products and its WhoNu? Nutrition Rich Cookies are a good test case. These “2x stuffed” chocolate sandwich cookies look like Oreos but are packed with nutrition. A two-cookie serving has “as much fiber as a bowl of oatmeal, as much calcium and vitamin D as an 8oz glass of milk [and] as much vitamin C as a cup of blueberries.”

Truly functional cookies were rare in 2012, though there were a few. The most unique offering came from Japan, where new Cowkey’s Milcube Cookies were promoted as a chocolate “beauty” cookie. Oriental herb extracts said to help prevent aging and hinder melanin production accounted for the cookie’s functional positioning.

Thin was a big trend in cookies and crackers in 2012, much like it was for breads.  Nabisco Newtons Fruit Thins Crispy Cookies feature real fruit in a thin snack. Nonni’s Thinaddictives Almond Thins also were new, blending fruit and nuts in a “light, sweet, crunchy” treat. Somewhat more indulgent, but still thin, are Pepperidge Farm Milano Slices. These thin, crispy cookies are layered in chocolate and topped with crunchy ingredients, like toffee and peppermint pieces, for a crunchy, new multi-texture flavor sensation.

Thin was even bigger in crackers, many referencing flatbread. Keebler Town House Flatbread Crisps Crackers are “oven baked” and ideal with dips, while Salem Baking Flatbread Crackers come in flavors such as Italian Herb & Tomato. A thinner texture may help crackers grab sales from potato chips. That was likely the intention of Pepperidge Farm Baked Naturals Cracker Chips, with “50% less fat than the leading potato chip.”

Looking at flavor trends, the big push in sandwich crackers is to be more filling—sometimes a lot more. Ritz Crackerstuffs Big Stuff Filled Crackers did not mess around with flavors, as its Extreme Peanut Butter touts “75% more filling than Ritz Crackerfuls.” Nabisco Honey Maid Grahamfuls Filled Crackers extend the flavor concept to fruit flavors, with a Banana Vanilla Crème variety.

Sandwich cookie filling flavor innovation was hot in 2012. Nabisco parlayed the concept into a series of limited-edition launches to freshen its Oreo franchise. Oreo Gingerbread Cookies hit the market in time for Christmas, while Candy Corn Oreos were in stores for Halloween. Less seasonal, but similar, are Birthday Cake Oreo cookies, with multicolored sprinkles.

Limited-time introductions are now a fixture in cookies and crackers. Pillsbury’s Ready to Bake Cookie franchise seems to have a new offering every couple of months, including 2012’s Spooky Cat (for Halloween), Rev Up For School (for “back to school” in August/September) and more. A look at what is trending in cookie flavors shows fudge, ginger, cinnamon and caramel rising in 2012. Fudge was the number three cookie flavor in 2012, after chocolate and vanilla, up from the number six spot in 2011. Ginger was number four, a big jump from the number nine spot. Cinnamon checked in at the number seven spot (up from number 16), while caramel was number eight (rocketing up from outside of the top 20 flavors in 2011).

What all four flavors have in common is indulgence. Trader Joe’s Dark Chocolate Triple Ginger Cookies offer three forms of ginger—fresh, crystallized and ground—all covered in dark chocolate, presumably to tamp down the heat level. Keebler Cinnamon Roll Cookies have the “delicious flavor of Cinnabon cinnamon,” while Nonni’s Salted Caramel Biscotti and Nabisco Chewy Chips Ahoy Gooey Caramel Cookies provide caramel indulgence.

Another form of indulgence is the “molten” or “lava” cake concept, one that seems to have potential for cookies. In Canada, the President’s Choice brand came out with The Decadent Molten Chocolate Chip Cookie—a frozen offering—in 2012. A shelf-stable version could well use this concept to hit one out of the park.

There were few flavor surprises in crackers in 2012, with Cheddar, peanut butter and other cheeses the top flavors. One fast riser was rosemary, moving up seven spots to the number three position. More generally, cracker makers favored zippy flavors in 2012. Pepperidge Farm Jingos! Crackers offer “bold flavor” and “snappy crunch” in flavors like Lime & Sweet Chili and Fiesta Cheddar, while Nabisco Wheat Thins weigh in with a Spicy Buffalo variant.

Finally, nothing reaches out to kids like the latest hot licensed character or brand. One new license on the scene was Angry Birds, the top-selling videogame of all time with an incredible 1 billion plus downloads, now part of the Nabisco Cheese Nips lineup. Hello Kitty, also popular with kids, graces a new line of packaged brownies from Taste of Nature called Hello Kitty Treats.