State of the Baking Industry 2018 [Infographic]

The baking industry has been growing steadily in the past several years with trends suggesting that there will be more growth in the coming years, estimated through 2021. Learn more about the current and future state of the baking industry, as seen in 2018.

Health-Conscious Customers

One of the most significant upscale trends is an increasingly health-conscious consumer. Ancient and whole grains, all natural ingredients, and no added preservatives will increase the value of your bakery’s products.

Changing Palates

Consumers’ palates are changing, and they are looking for bolder, more intense flavors. Limited edition and seasonal flavors can satisfy this need and increase sales. Consumers are willing to pay more for an original, high-quality product.

Social Media Engagement

Another trend that customers are heavily relying on is social media marketing. Not only do they want to know the story behind the bakery and production processes, but since most consumers are interested in convenience and price, mobile coupon use is at an all-time high.

The State of the Bakery Industry in 2018

  • Retail bakery sales are expected to increase by an average of 5.5% per year from through 2021.
  • Bakery products makeup 2.1% of the gross domestic product of the United States, accounting for about $311.0 billion in total economic output.
  • 65% of all bakeries have less than ten employees; 44% have one to four employees, and most small retailers only have one facility.
  • Through 2021, sales of cakes and cupcakes in retail bakeries are expected to increase by an average of 7.2% per year, totaling $754.8 million in 2021. Sales will be driven by smaller sized cakes and creative, indulgent cupcakes that use innovative and unique flavors.
  • 60 to 70 million Americans experience some type of digestive health issue, and the number of Americans following a gluten-free diet has tripled over the past five years.  As consumers increasingly shift toward healthier lifestyles, almost 30% purchase foods labeled as gluten-free. Gluten-free sales are expected to grow at an average annual rate of about 14.0% per year through 2021.
  • Sales of organic breads and grains grew by an estimated 8.4% to $4.34 billion in 2016. Companies that offer locally sourced organic products from sustainable farm programs will be most successful. Retail bakeries can set themselves apart by offering a variety of organic products, particularly those that are locally sourced from sustainable farms.
  • The average spending on bakery products for a U.S. household is expected to increase to $383.75 by 2021. Most of this spending will be on bread, with the second-most being cakes and cupcakes.
  • Many retail bakeries are now using coupon sites, and by 2021, more than 600 million consumers worldwide will use mobile coupons.
  • A few negative factors that will affect the retail bakeries industry through 2021 include volatile ingredient and energy prices, rising payroll and healthcare costs, and the improving quality of packaged baked goods. Competition from in-store bakeries and fast-casual restaurants pose the biggest threat to retail bakeries. Through 2021, in-store bakery sales will grow by an average of 2.2% per year, reaching an estimated $16.3 billion.
  • Based on relevant trends, the baking industry is poised for continued growth, especially for those that capitalize on health, sales and marketing, and flavor trends. Retail bakeries that offer fresh products with high-quality ingredients, affordable pricing, a clean and uncluttered store, enticing display cases, short wait times, and excellent customer service will be most successful over the next few years.
Macaroons in Display Case

“As bakeries continue to thrive and grow, order management is critical to their success. We want to help bakeries increase order and pricing accuracy, save time, and improve customer satisfaction.”

  • Mike Clements, CEO

One trend that is not going away is the need for efficient, error-free orders. Streamline your bakery order management and start a free trial with OrderNova, bakery order management that is out of this world.

Sources:

  • The American Bakers Association Economic Impact Study
  • Sundale Research; State of the Industry: Retail Bakeries in the U.S.

Leave a comment