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Bakery Business 2014

Learn about t rends in the Bakery Business and where to f ind more info abouthow to open a Bakery. Dont forget you can receive f ree or low-cost t raining

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Retail Bakery Business Overview & Trends, 2014

SIC Code: 5461, NAICS Code: 311812

This Bakery Business indust ry summary is f rom First Researchwhich also sellsa f ull version of this report.

Companies in this industry make fresh and frozen bread as well ascakes, pies, and doughnuts. Major companies include FlowersFoods and McKee Foods (bot h based in the US), along withARYZTA (Switzerland), Grupo Bimbo (Mexico), West on Foods(Canada), and Yamazaki Baking (Japan).

TheUS bakery products indust ry includes about 2,800 commercialbakeries with combined annual revenue of about $36 billion, alongwith about 6,000 retail bakeries with combined annual revenue ofabout $3.8 billion.

COMPETITIVE LANDSCAPE

Demand is driven by consumer preferences and by the ext ent towhich grocery stores choose t o operate t heir own bakeries ratherthan buy from commercial bakeries. Profitability for individualcompanies is det ermined by ef f iciency of operat ions. Large
http://www.sbdcnet.org/wordpress/wp-content/uploads/2012/02/Bakery%20Business.jpghttp://www.sbdcnet.org/small-business-information-center/business-plans#Business%20Plans%20Listhttp://www.sbdcnet.org/small-business-information-center/business-plans#Business%20Plans%20Listhttp://www.sbdcnet.org/find-your-local-sbdc-officehttp://www.sbdcnet.org/find-your-local-sbdc-officehttp://www.sbdcnet.org/http://www.firstresearch.com/Industry-Research/Bakery-Product-Manufacturing.htmlhttp://www.sbdcnet.org/wordpress/wp-content/uploads/2012/02/Bakery%20Business.jpghttp://www.sbdcnet.org/small-business-information-center/business-plans#Business%20Plans%20Listhttp://www.sbdcnet.org/find-your-local-sbdc-officehttp://www.sbdcnet.org/small-business-research-reports/bakery-business-2014http://www.sbdcnet.org/


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companies have scale advantages in procurement , product ion,and distribution. Small companies can compete by of feringspecialty goods or superior local distribution services.

In the US, the commercial side of the industry is concent rated: the50 largest companies generate 75 percent of revenue. The retailside of the industry is highly f ragmented: the 50 largest companies

generate about 15 percent of revenue, and the typical companyoperates just one facilit y.

This Bakery Business market research report summary is f rom IBISWorldwhich also sells a f ull version of this report .

According to IBISWorld, f irms wit hin this indust ry manufacture f resh andfrozen bread and baked goods, including cakes, muffins and croissantsbut excluding cookies and crackers. Ret ail and commercial

establishments sell these products t o downstream supermarkets,convenience stores and food-service providers. Many bakeries also selltheir products direct ly to the public.As t he economy recovers and disposable income increases, revenue isexpect ed t o grow at an average annual rate of 0.6% within the next f iveyears t o $39.9 billion. Consumers are expect ed to cont inue t o t rendtoward health eat ing and increase demand for items like fort ifiedbreads, gluten-f ree loaves and sprouted and organic sweets.Industry prof itability will slight ly improve over the next f ive years as t hecost of primary ingredients st abilizes. During t he next f ive years, bakerswill more easily ant icipat e price f luctuat ions and adjust product prices asthe cost of ingredients continues to rise. One boon to prof itability will bean annualized 1% decrease in wheat prices over t he next f ive years.Merger and acquisit ion act ivit y is expect ed t o f urther enhance earningsand productivity.External compet ition has increased over the past f ive years and importswill cont inue to grow at an annualized rat e of 7.1%. However, growingdemand for this product outside of the count ry will increase export s by9.8% per year over the next f ive years.

Retail Bakery Customer Demographics

The following facts are f rom Best Customers: Demographics of ConsumerDemand, which provides det ailed informat ion on consumer demographics f ormany indust ries. This resource, and ot her demographics and market ingmat erials are available f or purchase f rom New Strategist .

Cakes and Cupcakes: The largest households, which are those with

children, are t he best customers f or cakes and cupcakes. Six in tenmarried couples with children spend more than the average householdon cakes and cupcakes, with that rate increasing t o almost three in fourfor people with school-aged children. Hispanics spend about 17 percent
http://www.newstrategist.com/http://www.newstrategist.com/store/index.cfm/product/420/best-customers-demographics-of-consumer-demand-10th-edition-paperback.cfmhttp://www.ibisworld.com/about/faq.aspx


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more than average on this product and Asians spend an even greateramount at 25 percent more. The average household spending on thisproduct fell by more than one f ift h between 2000 and 2006. The cakeand cupcake sector of the baking industry then stabilized bet ween 2006and 2009.Cookies: The largest port ion of revenue f rom cookies is derived f romhouseholds with children. A household with a married couple and children

will spend 54 percent more t han the average household on this productwithin the baking indust ry. If the children are school-aged, t he householdwill spend 73 percent more than average.Spending on cookies fell by over two tenths between 2000 and 2006, buthas held steady since t hen.Prepared Desserts: The oldest consumers as well as married coupleswith school-aged children or older children at home are the bestcustomers for the prepared desserts segment of the baking indust ry.Couples with school-aged children spend over a f ourth more and t hose

with adult children spend more than 54 percent more t han the averagehousehold on this product. People aged 65 years or older spend 12 to 17percent more than the average household on prepared desserts. Anincrease in consumer preference f or the convenience of prepareddesserts has led to an 18 percent increase in household spending from2000 to 2009.Pies, Tarts and Turnovers: Households with children are the bestcustomers of pies, tarts and turnovers. Those households spend 47 to71 percent more than the average, while single parents spend just

above the average on this product. People aged 35 to 54 spend aroundtwo f ifths more than the average household and take up 47 percent ofthe market .Sweet rolls, Coffee Cakes and Doughnuts: Households with children arethe best customers for sweet rolls, coff ee cakes and doughnuts andspend about 52 to 69 percent more than the average household on thissegment of the baking industry. Household spending on sweetrolls,coffee cakes and doughnuts fells 23 percent between 2000 and 2009,and will cont inue to decline as t he baby-boomer generat ion exits the

best customer life stage.

Retail Bakery Startup Costs

Bakery Business Startup Costs from Entrepreneur Magazine:

Tot al Startup costs: $10,000 $50,000Franchises available? Yes

Bakery Business Startup Costs f romThe Start Your Own Business Bible

(F+WMedia and Adams Media):

Tot al Startup costs: $2,000 $5,000Pot ent ial Earnings: $2,000 $5,000 per month
http://www.adamsmediastore.com/the-start-your-own-business-biblehttp://www.entrepreneur.com/businessideas/bakery


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Retail Bakery Business Plans

Bakery Cafe Business PlanDessert Bakery Business PlanSpecialty Baker Business PlanDelicat essen & Bakery Business Plan

Pie Bakery Business Plan

Bakery Business Articles

American Bakers Associat ion Economic Analysis7 Business Lessons from Gourmet CupcakesGluten-f ree Gaining GloballyConsumer Price Index f or Baked Goods RisesTop Baking T rends f or 2014

Fresh Bakery is in FashionBakery Trends of 2014Bakery Industry Analysis

Bakery Business Media Outlets

Baking BusinessSnack Food & Wholesale BakeryAmerican Cake Decorat ing Magazine

Bakers JournalBake MagazineAmerican Societ y of Baking eNewslet ter

Bakery Business Associations

Trade associat ions of ten are excellent sources of informat ion on an indust ry.Here are some relevant industry associat ions:

American Bakers Associat ionRetail Bakers of AmericaProgressive BakerIndependent Bakers AssociationAmerican Societ y of BakingAmerican Culinary Federat ion

Bakery Business Employment Trends

Here is aBakery Business labor market summary f rom the Bureau of LaborStatistics.

Pay
http://www.bls.gov/ooh/production/bakers.htmhttp://www.acfchefs.org/http://www.asbe.org/http://www.independentbaker.net/independentbakersassociation/http://www.progressivebaker.com/http://www.retailbakersofamerica.org/http://americanbakers.org/http://archive.benchmarkemail.com/AmericanSocietyofBakinghttp://www.bakemag.com/http://www.bakersjournal.com/http://www.americancakedecorating.com/http://www.snackandbakery.com/http://www.bakingbusiness.com/http://smallbusiness.chron.com/bakery-industry-analysis-64831.htmlhttp://www.lundsandbyerlys.com/Blog/Bakery-Trends-of-2014.aspxhttp://www.bakeryandsnacks.com/Markets/Nielsen-Fresh-bakery-is-in-fashion-and-par-baked-loaves-are-hitting-runwayshttp://www.bbcgoodfood.com/howto/guide/rising-cake-stars-top-baking-trends-2014http://www.bakingbusiness.com/articles/news_home/Trends/2014/08/CPI_for_baked_foods_cereals_ri.aspx?ID={A9F2C74E-7610-453A-8EF3-862BBB50BCAD}http://www.bakingbusiness.com/articles/news_home/Trends/2014/08/Gluten-free_gaining_globally.aspx?ID={AC827891-A170-4419-AB6F-99FA0B160DDC}&cck=1http://www.forbes.com/sites/allbusiness/2013/09/30/7-business-lessons-from-gourmet-cupcakes/http://www.bakersenrichamerica.com/view/c7f6c10f-6bc9-4f8a-b853-95e1c283841e/downloadhttp://www.bplans.com/pie_restaurant_business_plan/executive_summary_fc.phphttp://www.bplans.com/delicatessen_and_bakery_business_plan/executive_summary_fc.phphttp://www.bplans.com/specialty_baker_business_plan/executive_summary_fc.phphttp://www.bplans.com/dessert_bakery_business_plan/executive_summary_fc.phphttp://www.bplans.com/bakery_business_plan/executive_summary_fc.php


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The median annual wage f or bakers was $23,140 in May 2012. Themedian wage is the wage at which half the workers in anoccupat ion earned more than that amount and half earned less.The lowest 10 percent earned less t han $17,200, and the t op 10percent earned more than $36,980.

Nearly 1 in 3 bakers worked part t ime in 2012.

Grocery stores and rest aurants, which employ more than half of allbakers, sell f reshly baked goods throughout the day. As a result ,bakers are of ten scheduled to work shifts during early mornings,late evenings, weekends, and holidays.

Work Environment

Bakers held about 167,600 jobs in 2012. About 6 percent were self-employed.

The work can be st ressful because bakers of ten work under st rictdeadlines and critical, time-sensitive baking requirements.

Bakers who run their own businesses of ten spend long hoursmanaging all aspect s of the business t o ensure bills and salariesare paid, supplies are ordered, and the business is prof itable.

Bakeries, especially large manufacturing facilities, are filled with

potential dangers such as hot ovens, mixing machines, and doughcutters. As a result , bakers have a higher rat e of injuries andillnesses than the nat ional average.

Although their work is generally saf e, bakers may endure backst rains caused by repet it ive lif t ing or moving heavy bags of f louror other packages. Other common hazards include cuts, scrapes,and burns. To reduce these risks, bakers of ten wear protect iveclothing, such as aprons and gloves.

Job Outlook

Employment of bakers is project ed to grow 6 percent f rom 2012 to2022, slower than the average for all occupations.

Population and income growth are expect ed to result in greaterdemand f or specialty baked goods, such as cupcakes, pies, andcakes, f rom grocery stores, bakeries, and restaurants.

However, employment growth of bakers will be limited asmanufacturing facilit ies increasingly use more automat edmachines and equipment to mass-produce baked goods.

Sources


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photo by: tinyfroglet
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