US Bakery Industry

The US bakeshop sedulousness has combine annual revenue of tight $25 billion from commercial bakeries and nearly $2 billion from small sell bakeries. in that location atomic number 18 about 2600 commercial bakeries in the US and 7000 small sell bakeries. about of the leading companies within this intentness involve Interstate Bakeries and Flower Foods as easily as smaller divisions such(prenominal) as Sara Lee and Nabisco. The commercial bakehouse incision is highly concentrated with 80% of the grocery store held by 50 tumid bakeries. On the other hand, the retail bakery sh atomic number 18 is highly fragmented.Larger bakeries dominate the market beca routine they make water greater economies of scale in procurement, drudgery and distrisolelyion. The industry is excessively characterized by high automation. However, the end bakery product is chiefly low value and but the unchangeable hold is sufficient to generate grim revenues for most players in the market. The most ordinarily sold bakery items implicate bake abrasions (white, wheat and rye), rolls, muffins, buns, bagels and croissants. Other popular items imply cakes, pies, pastries and doughnuts. (Industry Overview US bakery Industry Hoovers Online)Competition is unfit but differentiation can be attained through automation. Although baking is a low-technology business, the larger the bakery facilities and the more automatize the facility the bigger the profits for that company. This is because in large automated facilities, labor cost can be reduced world-shatteringly and maximum production can be attained. However, since bakery products are highly perishable, large facilities are only sensible for bakeries which present high sales and do non maintain a great demand of inventories.Bakeries also face competition from cocoa outlets and fast food outlets since most of them also carry bakery style products such as bagels, pastries, doughnuts etc. Commercial bakeries once a gain enjoy a commanding gear up because they can act as suppliers to these outlets eyepatch smaller retail bakeries sometimes piddle to suffer since customers fox more intent to go to fast food outlets then to visit a bakery. Moreover, customer trends are rapidly ever-changing.There was a time when the bonny consumer desired freshly adust products but instantaneously consumers are willing to grease ones palms packaged products and believe that they are safe, indulgent and convenient to use. Thus, packaged bakery bit products are also snatching the share from retail bakeries which offer freshly scorched products to the consumers. (US bakehouse Trends) Consumer demands and preferences are also changing constantly. Today, customers restrain become more health certain and demand low plump out and fat free products. Moreover, customers are now more and more aware and quite educated.They have detail information about nutrition and persona issues and have sophisticated tastes and preferences. That is why the industry has seen a growth in non-traditional bread products such as bagels, flat breads and essential products. Bakeries have had to change their strategies and their technological capabilities in request to keep up with the changing customer demands and preferences. (Bakeries and Snacks 2005) Bakeries are affected by external factors such as inconstant prices of raw materials. Most baked goods use ingredients such as flour, sugar and veggie oil.These are global commodities with fluctuating prices so it is important for both commercial and retail bakeries to make intelligent and proactive secure decisions. Flour is the primary ingredient in baked goods and accounts for the largest cost element for bakery products. Wheat prices are quite volatile and this can have a significant jar on profit margins. expenditure of butter has a similar impact and many bakeries have switched from butter to vegetable oil but again note has to be maintai ned in order to sustain a competitive position within the industry.The US bakery industry also has a growing exportationing segment. Since the 1990s exports of US bakery products have been increasing consistently. It is expected that exports of US bakery products will exceed $250 million by the middle of the decade if not higher. about of the core reasons for the growth in exports include rising incomes, increasing populations, growing tourer industries, reduction in trade barriers and an overall increase in global demand for baked goods.The main factors hindering export growth are demand for bauble and transportation limitations. However, with the improvement of technology, bakeries are now able to produce products that overcome these limitations. Moreover, in that location is always a demand for baked mixes, cookies and doughs that can be easily packaged and transported and that have prolonged shelf lives. The biggest customer of US baked goods is Canada. It is a huge mark et and Canadian customers have similar tastes to US customers.It is estimated that nearly half of US bakery products are consumed by Canada. (Clair, Thomas 1992)Bibliography1. Industry Overview US bakeshop Industry. Hoovers Online. Retrieved May fifth 2008 http//www. hoovers. com/bakeries/ID__91/free-ind-fr-profile-basic. xhtml.2. Clair, Thomas. (1992) Bakery products exports on the rise. AgExporter. Retrieved May 5th 2008 http//findarticles. com/p/articles/mi_m3723/is_n1_v4/ai_11754641/pg_2.3. The Canadian Bread and Bakery Industry. market-gardening and Agri Food Canada. Retrieved May 5th 2008 http//www4.agr.gc.ca/AAFC-AAC/display-afficher.do? id=1171653091262& amplang=e.4. Bakery industry cashes in on wholegrain trend. 2005. Retrieved May 5th 2008 http//www. bakeryandsnacks. com/news/printNewsBis. asp viper? id=62237.5. Eyre, Charlotte. US Bakery markets beckons for Vivartia. Retrieved May 5th 2008 http//www. cee-foodindustry. com/news/ng. asp? id=83797-vivartia-nonni-s-wind-poi nt-partners.6. US Bakery Trends. Retrieved May 5th 2008 http//www. bakeinfo. co. nz/industry/trends/article. php? id=43.