Baking manufacturing trends in the US market

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Baking manufacturing trends in the US market

18 Mar 2021

Jordan Winter

Jordan Winter is a journalist who wants to learn more and teach others about the world through storytelling. Dedicated to positive social change, her reporting is informed by years of experience writing, designing, and producing multimedia content for mission-driven publications and nonprofits.

As the creative director for Commercial Baking, Jordan is bringing life to the stories of diversity and sustainability in the commercial baking industry.

MUNICH — To understand how the US commercial baking industry can thrive in 2021 and beyond, it is imperative to examine how consumers, bakers and suppliers have responded to the impacts of COVID-19.

In their session at the iba.CONNECTING EXPERTS virtual conference, Robb MacKie, president and CEO of the American Bakers Association, and Kerwin Brown, president and CEO of BEMA, explored key trends in the US market that affected bakery manufacturing in 2020 and what they mean for the year ahead.

The US baking industry generates more than $154 billion in economic activity annually, with the grocery department dominating year-to-date bread and baked goods sales at around $40.8 billion per year. This is more than quadruple the sales in the next largest category — the supermarket bakery department —which averages $10 billion per year.
The COVID-19 pandemic has deeply disrupted consumer behaviors, but the baking industry has remained strong even in the short-term. Americans spent more time shopping at the grocery store than eating at restaurants. They cleared the shelves in commercial bakery aisles, boosting total dollar sales by 10.5% in 2020 from 2019.

“But the entire industry really wants to understand, what do things look like going forward?” MacKie said. “Here’s a pleasant surprise: nearly half of bakers are expecting long-term increased production as a result of the pandemic. As we get into the coming quarters, there’s an expectation of a more positive environment. The future looks good beyond COVID-19.”

This optimism isn’t limited to bakers. In a member survey that BEMA conducted in Q2 of 2020, 86% of US bakery equipment manufacturers reported feeling positive about the industry outlook.

“But it’s not all roses,” MacKie said.

“While many of these issues are here to stay, so are the innovations that have resulted from these difficult times.”

These manufacturers overwhelmingly listed their biggest business challenges as being COVID-19-related (71%), but continuing to handle day-to-day management is no easy feat. Respondents also listed challenges around attracting and retaining a quality workforce (65%), increased raw material costs (60%) and transportation and logistics costs (55%).

“Going forward the rest of this year, we’re going to see challenges around supply, especially around shipping and raw material costs for our equipment manufacturers and ingredient members,” Brown said. “But we’re also seeing this as a great opportunity for strong sales throughout the baking industry.”

Many of these challenges are here to stay, but so are the innovations that have resulted from these difficult times.

“People want to automate. They want to put more robotics in because they have to social distance their lines,” Brown said. A lot of our members are stepping up to that challenge of creating not only cleaner but also more socially distanced environment. They’re helping out those bakers — their customers — in coming up with those solutions.”

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