Commercial and Retail Bakeries NAICS 311811, 311812

Jul 20, 2025 - Tariffs Impacting Bakers' Costs/Supply Chains

• Tariffs on imports from the US’s top three trading partners are expected to cost the baking industry about $454 million this year, according to the American Bakers Association (ABA). This figure includes $244 million due to a 25% tariff on imported ingredients such as flour blends and sweeteners from Canada, $170 million due to tariffs on goods imported from Mexico, and $40 million from a 10% tariffs on Chinese goods, according to ABA. Also, a 125% tariff levied on certain imports from China in April to curb US reliance on foreign manufacturing is raising the cost of packaging and baking equipment. In July, President Trump threatened to raise the tariff on goods from Canada to 35%, with an exemption for goods that comply with the US-Mexico-Canada Agreement applying for now, according to the White House.
• Hostess reported a 12% increase in Twinkies sales last year, driven by limited-edition flavors, collaborations with brands like Dunkin’ and Hershey’s, and a viral TikTok challenge. According to IRI retail data, US sales of the golden spongy snack cake reached $150 million last year, their highest level since the 1990s. Twinkies disappeared from the market briefly in 2012 when Hostess filed for bankruptcy but soon returned by popular demand. The J.M. Smucker Company acquired Hostess Brands in 2023 and savvy marketing has breathed new life into the classic snack cake. The release of “Mystery Flavor Twinkies” helped to drive interest and sales last year. Moreover, bakeries and home cooks have started using Twinkies in cake recipes, further driving sales and introducing Twinkies to a new generation.

• Wedding season is here and bakeries looking to establish steady wedding traffic should befriend wedding planners and venue coordinators to drive business their way, according to Retail Bakers of America (RBA). These gatekeepers are influential in steering business to vendors through their recommendations. RBA suggests bakeries looking to establish themselves as a go-to choice for wedding cakes drop off a box of samples at local venues or planners’ offices. To sell couples on your bakery, RBA recommends making tastings an experience, highlighting your best cake flavors and creating an inviting ambiance. Charging a small fee for the tasting that can go toward the final order is a good way to weed out free sample hunters. According to The Knot, in 2024 the average cost of a wedding cake was $540. Beyond the cake, offering a dessert table package is an easy way to upsell.
• Producer prices for retail bakeries were relatively flat in May compared to a year ago, while producer prices for commercial bakeries rose 1.5% over the same period, according to the latest US Bureau of Labor Statistics data. Bakery industry producer prices are near record highs amid rising costs for ingredients including butter and eggs, which while easing are still historically expensive. Sustained strong demand for baked goods supports high producer prices due to consumers' willingness to pay for cakes, cookies, and other treats. Employment by bread and bakery product manufacturers grew 1.7% year over year in April, while the average industry wage rose 3.7% over the same period to $22.88 per hour, BLS data show.