IBIE co-owners discuss effect of COVID-19 pandemic on the baking industry

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IBIE co-owners discuss effect of COVID-19 pandemic on the baking industry

8 Aug 2022

Joanie Spencer

Since 2008, Joanie Spencer has covered the retail and wholesale sides of the baking industry.
Serving associations such as the American Society of Baking (ASB) and BEMA, Joanie is also in demand as an industry presenter on bakery operations and trends. She holds a bachelor’s degree in communication from Rockhurst University and a master’s degree in journalism from the University of Missouri.

When she’s not running or playing soccer, Joanie spends her time with her husband and 11-year-old son.

Every IBIE year, it’s customary to reflect on how industry trends have changed during the show’s three-year cycle. But little did we know that less than six months after the 2019 show closed, life as the world knew it would change forever.

As the industry prepares to meet in Las Vegas for the 2022 Baking Expo — the first truly international baking show to take place in-person since 2020 — Robb MacKie and Kerwin Brown, respective presidents and CEOs of American Bakers Association (ABA) and BEMA, which co-own IBIE, sat down to reflect. They revered the ability of bakers, suppliers and allies to navigate the upheaval, and they expressed the overall sentiment in the industry leading up to the show.

From the pandemic to supply chain disruption and labor shortages to war in Ukraine, bakers haven’t gotten a break since leaving Las Vegas three years ago. It’s safe to say this is the toughest environment the industry has seen in 100 years. If these were Biblical times, bakers might well be preparing for a plague of locusts.

“I have talked to people who have been in the industry for 50 years,” MacKie said. “I ask them all the time if they’ve ever seen an environment like this, and the answer is always, ‘No.’”

Despite the hardships, the industry has remained focused on protecting employees, serving customers and getting product onto store shelves and kitchen tables. The strength and resiliency that has come from it is perhaps just as unprecedented as the hardships themselves.

“The variety of decisions, and the speed at which they’re being made, has accelerated astronomically,” MacKie said, recalling how swiftly baking companies jumped into action to get product out the door during the crisis of foodservice shutdowns and retail bread shortages. That precision provided a foundation for addressing supply chain problems that soon followed.

Supply chain disruption had a major impact on pricing and lead times for ingredients and equipment, often leaving bakers and their suppliers in a lurch. It’s a struggle when a long-term solution is still a long way off, but in many ways, it’s making the industry stronger and more efficient, positioning it to come out of this better than ever. In the chaos Olympics, the baking industry is going for the gold.

“It’s like an athlete who goes through a rigorous workout,” Brown suggested. “And this has been the hardest workout we could ever imagine. But it’s made us leaner, tougher and more resilient. We’ve had to find answers we didn’t have to look for before.”

Looking back at pre-pandemic times, manufacturing seemed relatively straight-forward for bakers and suppliers. Make a product; ship the product.

“Now, it looks more like, ‘I might have a product; then again, I might not. And if I do, I can’t ship it,’” Brown said. “Or, ‘My first trucking choice fell through and I have to go to my second or third choice.’ Equipment manufacturers used to order parts or controls and get them in two weeks, but now they don’t know when they’ll get them.”

“I have talked to people who have been in the industry for 50 years. I ask them all the time if they’ve ever seen an environment like this, and the answer is always, ‘No.’” —Robb Mackie | president and CEO | ABA

While the supply chain has been rattled, it hasn’t — up to this point — stalled out consumer demand for baked goods. Despite inflation reaching a 40-year high, many baking companies are still reporting record profits.

It’s a complicated “good news, bad news” scenario. Business is booming, and while that’s classified as a “good” problem, bakeries are often scrambling to meet high demand amid labor shortages and long lead times for equipment that could fill those workforce gaps. The same is true on the supplier side, as ingredient producers and equipment manufacturers are fighting shortages of their own.

“There are fundamental shifts going on in terms of capacity utilization,” MacKie said. “Five years from now, the supply chain is going to look vastly different. Some of it may be sourcing some of those key components for control systems domestically. And the whole ingredient supply chain is being analyzed now. Leaders in the industry know they’ve got to get there.”

This topic will not only drive conversations at IBIE exhibitor booths this fall; it has also dominated several industry events leading up to the show. With the American Society of Baking’s BakingTECH conference, along with ABA Convention and BEMA Convention, happening in-person this year, bakers were able to engage in meaningful conversations with their suppliers in more intimate, business and thought leadership environments.

These conversations will invariably arm decision makers with the right information as they step onto the IBIE show floor, where ingredients and equipment will be on display.

“The conversations that have occurred this spring and summer are shaping what exhibitors will bring to the show,” MacKie said. “I would suggest that exhibitors double down and use these meetings as opportunities to understand what bakers are really looking for, and then bring it strong to IBIE.”

If attendance is anything like it was in 2019, IBIE is looking at welcoming well over 22,000 industry members from around the world. After being apart for so long while simultaneously dealing with the greatest challenges in the industry’s history, that will look something like “ecstatic euphoria” to MacKie.

“After all the Zoom and all the triage that’s had to be done in so many aspects,” he pondered, “how great is it going to be to gather the global baking community back together again?”

This story has been adapted from the July | IBIE ShowGuide 2022 issue of Commercial Baking. Read the full story in the digital edition here.

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