Experts say baking is back

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MUNICH — The US market for baked goods was strong in 2020 overall, though it was not without nuances according to Kerwin Brown, president and chief executive officer of BEMA, and Robb MacKie, president and CEO of the American Bakers Association (ABA) during their presentation at iba.CONNECTING EXPERTS, held virtually March 15-17.

“The US is such a big market, we certainly see by state and by city openings and closings how different units have reacted to COVID-19 in different ways,” Mr.Brown said.

These differences, agreed Mr. MacKie, showed themselves in the regional data taken on outlook of sales and volume growth in the coming quarters.

“Certainly in areas like the Southeast and the Southwest things have been open more whereas the Northeast and particularly on the West Coast things have really been closed down,” he said.

In the final quarter of 2020, unit sales reflected a positive growth since 2018 and 2019 for commercial aisle bakery, despite pandemic panic buying at the beginning of 2020, According to research from the IRI.

For in-store bakery, on the other hand, unit sales had seen a densely negative impact, dropping by 23.3% from 2019. However, data shows a rebound is finally beginning for in-store bakery unit sales as of the fourth quarter of 2020.

“It’s fine to look back and understand and take the lessons learned, but we really want to understand for the entire industry, what does it look like going forward?” Mr. MacKie said. “And I think this is one of the pleasant surprises: Nearly half of the bakers are expecting long-term increased production as a result. As we get into the coming quarters there’s an expectation of a more positive environment.”

Based on the pulse surveys conducted by Cypress Research in partnership with Sosland Publishing Company (SPC) and Lesaffre, at the end of last year 47% of bakers reported an expectation for increased production volume in the coming months.

“If you’re looking for bright signs, when I see numbers like this, I think the future looks pretty good in the not-too distant future,” Mr. MacKie said.

In a similar survey done by BEMA Intel and SPC, data also showed that 97% of bakery manufacturers are positive about their 2021 company outlook. Fifty-one percent of those reported being very positive.

“The US economy is loving bread; we’re eating bread a lot; we’re putting it on the table more,” Mr. Brown said. “At the same point, our bakers are really continuing to invest in their businesses to automate. I think it speaks really strongly to both the suppliers and the bakers that have really adapted to this market and are pushing forward and have a really positive outlook.”

The reason for this adaptability is bakers’ determination to better their companies despite the difficulties of the current environment.

“Bakers are willing to continue to invest in their companies and in the future growth of their companies,” Mr. MacKie said. “I think we saw some hold back for a while, but it seems to be catching back up because they know they need to seek further efficiencies, they know they need to be more nimble, and even in the hardest hit-sector of the foodservice side you still see a commitment to making those important investments that will pay dividends in the long run.”

Some of those investments include continuing to focus on food safety, packaging, and hygiene moving forward.

“We’ve talked to a lot of our retail customers about this issue of having single-serve packaging to meet the needs and allay the concerns that consumers have of the safety and the cleanliness of the product,” Mr. MacKie said. “I think that’s going to be here for a while to come.”

Furthermore, Mr. Brown said, labor issues are here to stay.

“People want to automate. They want to put more robotics in because they’re having to social-distance on their lines and make them less touch,” he said. “Many of our members are stepping up to that challenge of having not only a cleaner environment, but a more social-distanced environment.”

Beyond day-to-day COVID-19 challenges, other challenges include retaining quality workforce, increased cost of raw materials and costs of transportation and logistics, according to Cypress Research’s 2020 Q4 pulse survey, worries which BEMA Intel’s 2020 Q3 survey reinforced.

Despite these struggles, however, Mr. Brown was sure to enforce the message that “baking is back.”

“Americans have rediscovered the sandwich eating at home and baking at home,” he said. “That’s a really positive turn for our industry amongst so much negative.”



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