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Keep up with what’s going on in the bakery industry today.
It’s easy to dream of running a bakery. The smell of fresh pastries, the quiet of the mornings, the connections made between staff and regulars, and of course, the access to all the treats you can eat all make the job incredibly appealing.
Some people go to pastry school, work in a few bakeries, and then venture out and start their own bakery business. Others are avid home bakers with business savvy who jump into bakery ownership when they need a career change. Others still dedicate themselves to creating architectural cakes to wow guests at weddings and other events.
Whichever way you enter into bakery ownership, it’s always important to stay up to date on trends in the baking industry. We’ll provide some market insights and bakery trends that can help you take your business in the right direction.
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Bakery industry market analysis
COVID was tough on all hospitality industry businesses, and bakeries are no exception.
Many bakeries were lucky to be able to produce treats that could be easily sold to go, or even delivered, to keep revenue coming in during the height of the pandemic and beyond. People needed a pick-me-up during the early days of COVID, and many were happy to support their local bakeries by buying lots of sweet treats to eat at home.
Others faced bigger challenges: the demand for special occasion baked goods plummeted as weddings, bar mitzvahs, and holiday dinners went canceled for months, or even years.
In 2022, bakeries are finally starting to operate similarly to how they did pre-pandemic. They’re still facing challenges like staffing shortages and supply chain issues, but businesses are starting to feel closer to normal. Bakeries that offer food service are now welcoming guests back to dine on-premise instead of just offering takeaway, and specialty event bakers are back to being busy and booked.
The market size of the global bakery industry was $331.37 billion in 2020, and is projected to reach $436.91 billion by 2026. Across the world, major corporations are largely responsible for getting bakery products into the hands of hungry customers. In 2019, retail bakeries made ~$3 billion in sales, while commercial bakeries sold over 10 times more, with $31 billion in sales.
In 2022, the bakery industry competitive landscape has a few top players who hold a majority of the market share — in the U.S., 55% of all baked goods are produced by three major companies. Globally, Bimbo Bakeries USA, Nestle SA, Mondelez International, Inc, and Associated British Foods place are just a few of the top bakery brands in the world.
The specialty bakery sector, which refers to bakery companies catering to customers looking for key trends like healthy alternatives and new products, including organic and gluten-free baked goods, grew by 2.45% in 2022.
This list includes all the restaurant management statistics and trends every restaurant owner/operator should know.
2022 bakery industry trends
Online ordering and delivery
But even as things started to level out with COVID and businesses started to feel a little more back to normal, the convenience and additional revenue brought by online ordering and delivery apps continued to prove useful.
Bakeries of all sizes now have the capacity to process orders online, whether a customer just wants to pre-order their morning scone or if an office is looking for donuts for 50 people.
The labor shortage and staffing crisis
Hospitality workers left the industry by the thousands during the pandemic, and many have decided not to return. The work is tough, and pay has always been too low, and even the most passionate bakers and industry lifers have said enough is enough.
Today, bakeries everywhere are finding themselves short-staffed, meaning that customer service immediately suffers and the employees they do have are seriously overworked, leading to burnout.
In order to attract and retain a great team, bakeries are increasing wages and experimenting with offering different types of benefits. It means that labor costs are significantly higher, which can be challenging during a time when inventory costs are also higher, but staff retention is so vital to the success of a business that many bakeries are raising prices significantly in order to be able to afford to provide best-in-class compensation.
Supply chain disruptions
Because of the huge challenges that the whole world is currently facing, from wars to climate crises to ongoing COVID fears, the supply chain for bakery raw materials has been massively disrupted. The cost of everything has gone up precipitously — from storage bins to specialty flours, it’s simply harder to afford the cost of running a bakery.
Despite high consumer demands, many bakeries have had to remove certain items from their menu, or significantly increase their prices to meet the new prices of ingredients set by strained distribution channels.
Recipe costing is a very helpful tool to identify when ingredient costs eclipse how much an owner can reasonably charge to still stay profitable, so an inventory solution can be a great support in these times.
New products and nutritious alternatives
As mentioned above, the demand for healthier baked goods has been steadily rising as society becomes more conscious of how their lifestyle and food choices can impact their long-term health and wellness — as well as that of the environment.
Plant-based bakeries have begun popping up all over, offering vegan versions of many different bakery product types, from breads to croissants and cupcakes.
The demand for gluten-free substitutes has also markedly increased, and bakeries are meeting the needs of customers who are gluten-intolerant and celiac.
When thinking about bakery trends, the number one thing that comes to mind is the cronut — it was one of the first mega-trends spurned by the internet that led to lines around the block at bakeries offering this hybrid baked treat.
Though the cronut craze has come and gone, there are many bakery trends worth keeping an eye on and considering offering in your local bakery.
Croissants. There’s nothing like a perfect croissant — buttery, flaky, with hundreds of soft layers inside a crackly golden shell — and nothing quite as disappointing as a sub-par one. Croissants are labor-intensive and they get stale relatively quickly, so they’ll need to be made fresh daily in order to truly delight your customers.
Kouign-amann. Kouign-amann is another laminated pastry, but a much more niche and lesser-known one compared to croissants. They’re shaped like little crowns and dusted with coarse sugar before baking, providing a crunchy, caramelly exterior that yields to a buttery layered inside.
Savory pastries. As much as bakeries are often built to offer sweet treats, many are now venturing into offering savory pastries, too. Whether you stick to the classics like ham and cheese or spinach and feta croissants, or get creative with herbs, sausage, bacon, cheese, and more, your customers will know they can come to you for a salty snack as well as for a sweet tooth fix.
Gluten-free baked goods. As mentioned above, the demand for gluten-free baked goods is huge right now. Though cross-contamination isn’t usually an issue for those who are just sensitive to gluten, be sure to communicate to your celiac customers if you’re not able to use a separate space to prepare your GF baked goods, because some may experience issues if even a little bit of regular flour makes it into their cookies.
Naked cakes. As opposed to the wedding cakes completely draped in fondant that were popular in the mid-2000s, naked wedding cakes are stacked and coated in a very light crumb coat of frosting so that customers can still see the cake itself. They’re decorated with flowers, rosettes, and any other type of cake decoration styles, but the key with naked cakes is that you can see through most of the decor.
Floral decor. Ever a classic but also always evolving, floral baked goods are a beautiful option for weddings and other occasions. Whether you use real edible flowers, create vividly colored flowers out of sugar paste and food coloring, or you opt for traditional frosting-piped flowers, a floral motif will always be a showstopping crowd-pleaser, especially for cakes and cupcakes.
Technology Innovation and automation
During the height of the pandemic, many bakeries opted to upgrade their restaurant technology systems to better reflect the needs of their customers and their strained operations. Letting customers order ahead online helped them predict sales volume. Others also added on email marketing capabilities to reach and connect with their customers during such uncertain times. And for bakeries that offer on-premise dining, many have chosen to implement QR codes that let customers order for themselves, and have those orders go straight to their bakery POS system without a server involved.
Keep bringing baked treats to your community
Every baker and bakery owner fuels their business with their passion for food, their love of connecting with customers, and with the help of a dedicated team. Keeping up with economic and consumer trends in the bakery industry can help inform what you can add, change, or optimize at your bakery — no matter what kind of bakery you run.