KANSAS CITY, MO — As the baking industry becomes a breeding ground for M&A activity, a transformation is happening at breakneck speed.
From Mexico City-based Grupo Bimbo’s acquisition of UK-based St. Pierre Groupe and the addition of Dianne’s Fine Desserts into the Dessert Holdings portfolio to growth by acquisition from the likes of Crown Bakeries and Quebec City-based Bakery Humanity, the business of baking is driving change … in a big way.
Two years ago, most baking companies were either struggling to stay afloat or scrambling to keep product on store shelves. As the world settles into what’s unofficially considered a post-COVID-19 reality where disruption is the status quo, bakeries are pushing the envelope on innovation.
According to a report from Barnes Dennig — a Cincinnati-based tax firm with expertise in the manufacturing, transportation/logistics and wholesale/distribution fields — manufacturing has seen an uptick in M&A activity in the past year. That’s due to a few factors, according to the firm, starting with the return of production back to pre-pandemic levels.
Other factors include tax and regulatory issues, availability of funds, shifts in strategic growth plans and, of course, the impact of COVID-19 on businesses and their owners.
It’s not just happening in the bakeries. M&A has been prevalent on the supplier side, as well. During the International Baking Industry Exposition (IBIE), held Sept. 18-21 in Las Vegas, three of the show’s largest exhibitors shared best practices on incorporating multiple brands into one IBIE booth experience. In this Innovations Annual, those companies sat down with Commercial Baking to identify some of the most important implications for innovation when working with multiple brands under one umbrella.
Developing complex organizations that encompass several brands — each with its own technology solutions, leadership and customer base — requires targeted focus for each brand that is born out of identifying specific operational needs.
AMF Bakery Systems, part of the Markel Food Group, recently restructured its family of brands organized as nine individual business units based on their product technology, all under the AMF banner.
“While we continue to invest in the brands, there’s also a company sitting behind each one. Each brand is its own business unit with a focused product line.” — Jason Ward | president | AMF Bakery Systems
Each brand was developed to bring its own identity and equity to the marketplace and to ensure strategic and operational focus. However, they each leverage common sales and customer care organizations around the world and work together to provide integrated solutions to customers.
“While we continue to invest in the brands, there’s also a company sitting behind each one,” said Jason Ward, AMF Bakery Systems president. “Each brand is its own business unit with a focused product line.”
Each one has its own dedicated leadership team that focuses on best-in-class product development that can then create integrated solutions for complete production lines for soft bread and bun, artisan bread, flatbread, cake, pie, croissant or pastry.
This is what AMF calls the “battle for ‘and.’” Success is twofold: On one hand, each unit has a tightly focused product development strategy that must deliver success at the unit and sub-system level; on the other, it’s a group effort to bring innovation in full bakery systems solutions from mixing to post-packaging automation.
“There has to be intense collaboration across the brands in order to provide a seamless, complete system solution,” Ward said. “That collaboration across our brands, sales and customer care organizations, coupled with extreme focus at the product line level, is what makes us different, and we must deliver both to be successful.”
While each unit has its own strategy for meeting specific customer needs, AMF has a high overall standard for its digital transformation strategy. In pursuit of next-level bakery intelligence, the company is leveraging technology like artificial intelligence to develop fully autonomous bakery equipment by 2030.
Collaboration isn’t an all-or-nothing proposition; it depends on customers’ needs and how machines work together for specific product types or in different areas of the line.
“Sometimes, it’s OK to be different, and there are good reasons for those differences,” Ward said. “In those cases, we wouldn’t necessarily need to have every technology the same across the entire AMF product line.”
There are many reasons why one-stop shopping can streamline the process of outfitting a bakery, but that’s not always the goal. AMF brands offer a variety of technology including extrusion-based makeup, volumetric makeup, sheeting, laminating and depositing, as well as proofing and baking technology and packaging at the end of the line.
At the front of the line, AMF mixing technology has typically focused on batch varieties. Recently, though, the AMF Fusion unit partnered with Reading Bakery Systems (RBS), another Markel company specializing in continuous mixing through its Exact Mixing platform. The result is an unprecedented take on cross-pollinated innovation as Jim Warren, VP of Exact Mixing at RBS, and Terry Bartsch, executive product manager – dough systems for AMF Fusion, work closely to identify and drive new solutions for both platforms.
“We have to empower the businesses and the brands to be the very best at what they do, to respond to customers and drive continuous improvement,” Ward said. “When you have a complex organization that encompasses different brands or businesses, you must make it easy for customers to get the help they need. That’s the case whether it’s a project that includes one or two product groups or the entire bakery.”
This story has been adapted from the 2022 Innovations Annual issue of Commercial Baking. Read the full story in the digital edition here.
