This is marketing research on the bakery products industry and can include information on the background, market structure, definitions, competitors, trends and developments of bakery products and is related to other topics such as baking and food.

Table of Contents

[edit] Background

Bakery products are foodstuffs prepared by using raw materials such as flour, starch, sugar, meat, dried fruit, emulsifiers, flavorings, preservatives, additives, gluten, vitamins, food acids etc. The manufacturing process includes blending these raw ingredients and converting them into finished market products including bread, doughnuts, cakes, pies, pastries etc, generally through a baking or similar cooking process. The products, after this basic preparation, are put up for sale in supermarkets, convenience stores, food service providers and other specialty retailers. Certain bakeries sell their products directly to the end-user or consumer. The bakery products business includes developing fresh and frozen bread and other baked goods.

Baking is not a technology intensive industry. It manufactures generally low-cost goods from product components. The cost of ingredients comprises of 15% - 30% of the total wholesale costs. Administrative and operational efficiencies focus on decreasing production and distribution costs. Baked food products are a significant element of the total food industry. Labor costs can be reduced significantly in the commercial baking processes. A large automatic bakery can manufacture a million loaves of bread per week with only one hundred employees in two shifts. The amount of resources required and which can be used in a manufacturing facility is generally limited by the necessity to distribute merchandise that has a short shelf life to a restricted number of local consumers. Typically a large baking facility can efficiently serve consumers within a 300-mile radius. Nearly all current bakery operations are highly automated.

[edit] Market Structure

The demand for bakery products is connected to the total consumer demand as well as shifts in tastes and the success of marketing programs to introduce new products and then create new demand. Large players focus on the careful balancing of financing and gaining process and distribution efficiencies. Small baked good companies generally focus on specialty goods or narrow, regional distribution systems.

The industry structure based on products as follows:

• 50% - baked breads, mainly white, wheat and rye;
• 20% - rolls, buns, muffins, bagels and croissants;
• 11% - soft cakes;
• 19% - pies, pastries, doughnuts and a variety of sweet goods.

This is not a cyclical industry. According to the Wheat Foods Council the annual US per capita consumption of bread is around 60 pounds. The primary industry structure is based on (a) manufacturing for wholesale distribution and (b) manufacturing for retail sales.

[edit] Industry Definitions

• ADI - an estimate of the quantity of an exact chemical in food additive, based on per body weight calculation method.

• Acesulfame K - acesulfame potassium is a low-calorie inducement permitted for utilization in the United States in 1988. It is a salt compound of carbon, nitrogen, oxygen, hydrogen, sulfur and potassium atoms.

• Additives (food additives) - organic or artificial substances or ingredients, other than the essential unprocessed elements, used in the fabrication of food to improve the finished product.

• GRAS (Generally Recognized as Safe) - GRAS is the authoritarian condition of food components not assessed by the FDA set testing method.

[edit] Market Metrics

In the U.S., the industry's revenues for the year 2006 were approximately US $34.6 billion. The total value of baked goods imports was US $2.7 billion.

Countries exporting to the U.S.:
 
Country        Imports           Percent

Canada     $1,394,605,000       (51.29%) 
Mexico       $355,520,000       (13.08%) 
Italy         $90,075,000        (3.31%) 
Germany       $87,603,000        (3.22%) 
Japan         $68,714,000        (2.53%)

The total U.S. baked goods market for the year 2006 was almost $35 billion. There were 132 countries that carried out international baked goods trade with the U.S. in 2006. The U.S. had imports from 99 countries and exports to 110 countries in 2006. The total European bakery products market was valued as Euros 88.9 billion in 2005. The largest ten European manufacturers supplied 24.5% of the total market.

Total shipments of all baked and related goods according to the US Census Bureau data are as follows:

• BREAD/CAKE

Value of shipments: $23.8 billion

Companies: 2,247

Plants: 2,616

Plants (20+ employees): 886

Capital expenditures: $666.3 million

Ingredient/material costs: $7.2 billion

• COOKIE/CRACKER

Value of shipments: $10.4 billion

Companies: 292

Plants: 351

Plants (20+ employees): 147

Capital expenditures: $220.1 million

Ingredient/material costs: $3.1 billion

• SNACK FOOD

Value of shipments: $12.2 billion

Companies: 265

Plants: 338

Plants (20+ employees): 167

Capital expenditures: $357.3 million

Ingredient/material costs: $3.6 billion

• FROZEN PIZZA*

Value of shipments: $1.6 billion

Companies: 24

Plants (20+ employees): 34

Partial statistics a result of Frozen Pizza’s inclusion

within Frozen Specialty Food manufacturing report

• BREAKFAST CEREAL

Value of shipments: $8.9 billion

Companies: 46

Plants: 66

Plants (20+ employees): 47

Capital expenditures: $253.2 million

Ingredient/material cost: $2.3 billion

• TORTILLA

Value of shipments: $1.5 billion

Companies: 271

Plants: 297

Plants (20+ employees): 111

Capital expenditures: $53.2 million

Ingredient/material costs: $550.5 million

• DRY PASTA

Value of shipments: $1.5 billion

Companies: 182

Plants: 193

Plants (20+ employees): 31

Capital expenditures: $51.3 million

Ingredient/material costs: $881.7 million

• CANDY/CONFECTIONERY

Value of shipments: $8.9 billion

Companies: 1010

Plants: 1084

Plants (20+ employees): 177

Capital expenditures: $242.4 million

Ingredient/material costs: $3.1 billion

• PREPARED FLOUR MIXES/DOUGH

Value of shipments: $4.3 billion

Companies: 180

Plants: 220

Plants (20+ employees): 113

Capital expenditures: $129.4 million

Ingredient/material costs: $2.1 billion

• FROZEN BAKERY PRODUCTS

Value of shipments: $4.2 billion

Companies: 226

Plants: 259

Plants (20+ employees): 162

Capital expenditures: $179.0 million

Ingredient/material costs: $2.0 billion

According to the Bakery Products Scoreboard, total product introductions in selected 
categories were as follows:

                      	2004     	       2003    		       2002

Breads                   196             	272      		235
Cakes/pastries           161             	430      		394
Crackers                  80             	154       		96
Cookies/biscuits         220             	560      		496
Baking ingredients       173             	545      		375

Total                    830         	      1,961    		      1,596

[edit] Industry Players

The US bakery industry consists of

• 2,600 commercial bakeries

• Combined annual revenue of $25 billion

• 7,000 small retail bakeries

• $2 billion total revenue.

The commercial bakery products industry consists of the 50 largest commercial bakers with market-hold of more than 80 percent. The retail bakery products industry is highly fragmented.

The industry leaders include the following:

• Bahlsen KG
• Big Apple Bagels
• Britannia Industries
• Bruegger Bagels
• Chipita International S.A.
• Elite Industries
• Flower Foods
• George Weston Foods
• Groupe Danone
• Grupo Industrial Bimbo
• Interstate Bakeries Corporation
• Kellogg Company
• Manhattan Bagel
• McDonalds
• McGlynn Bakeries LLC
• Nabisco
• Nestle
• New World Restaurant Group
• Riviana Foods
• Sara Lee Bakery Group
• Specialty Foods Acquisition
• The Great Canadian Bagel Company
• Parle Products Ltd
• United Biscuits
• Yamazaki Baking.

[edit] Trends and Recent Developments

The International Dairy, Dell and Bakery Association noted in 2001 about $923 million of organic breads and grains were sold at retail. The recent trend of the industry forecasts says that the cost of the major raw materials can alter quickly. Consolidation in the superstore business has shaped large chains that can professionally control their individual bakeries. The recent hike and corn prices due to the increased demand for ethanol has negatively impacted raw materials prices in 2006 and 2007. In 2003, the worldwide bakery food marketplace witnessed a value sales increase by 8.3% to US$271 billion.

[edit] Sources

GNPD

US Census Bureau

IBIS World

The International Dairy, Dell and Bakery Association