Commercial and Retail Bakeries
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 10,800 bakeries in the US produce bread, rolls, and other bakery products. Commercial bakeries sell primarily to businesses (retailers, restaurants, and food service companies). Retail bakeries sell primarily to consumers. Major revenue categories include bread, rolls, cakes, cookies, and crackers. Companies may also sell frozen bakery products or may specialize in a particular type of product, such as cupcakes.
Variable Costs Impact Margins
The cost of ingredients, such as flour, sugar, cocoa, and dairy products, can vary and affect margins.
Dietary Trends Affect Demand
Trends and fads that drive food preferences can impact demand for bakery products.
Industry size & Structure
The average commercial bakery employs 43 workers and generates between $14 million annually, while the average retail bakery employs 11 workers and generates about $665,000 annually.
- The bakery industry comprises about 10,800 firms that employ about 337,000 workers and generate about $40.7 billion annually.
- Commercial bakeries account for 25% of firms and 88% of industry revenue.
- The commercial bakery industry is concentrated - the top 50 firms account for 70% of industry revenue. The retail bakery industry is fragmented - the top 50 firms account for just 16% of industry revenue.
- Large companies include Grupo Bimbo (Sara Lee, Arnold), Hostess Brands, and McKee Foods (Drake’s Cakes, Little Debbie).
- Bread is a standard household staple, with per capita consumption in the US of nearly 44 pounds annually.
Industry Forecast
Commercial and Retail Bakeries Industry Growth
Recent Developments
Mar 20, 2025 - New High for Wages
- Producer prices for bakery products inched up 0.6% in December compared to a year ago after rising 3.8% in the previous December-versus-December annual comparison, according to the latest US Bureau of Labor Statistics data. After rising relatively steeply in 2022 and 2023, wholesale price hikes for bakery products took a breather last year. Employment by commercial and retail bakeries grew 1.8% year over year in January, while average industry wages rose 3.9% over the same period to a new high of $22.63 per hour, BLS data show. Payroll growth is outpacing pricing power for makers of baked goods, putting pressure on profits.
- Consumers looking to reduce their sugar consumption are checking labels for natural sweeteners that don’t compromise on the taste or texture of baked goods, Snack Food & Wholesale Bakery (SF&WB) reports. So called “clean-label” sweeteners include monk fruit, stevia, and organic date syrup made from concentrated date juice. Organic date syrup contains fiber, natural sugars (such as glucose and fructose), vitamins, and minerals and can substitute for sugar in baking due to its sweetness and moisture-retaining properties, according to SF&WB. Tagatose – a naturally occurring sugar found in various foods – is 90% as sweet as sucrose with 60% fewer calories. Tagatose also has a low glycemic index (GI of 3), a ketogenic certification, and is non-GMO Project Verified. A bulking sweetener, tagatose delivers both sweetness and textural properties. Bakers who innovate to cater to consumers looking to cut sugar without sacrificing taste and texture are likely to gain new customers.
- Farmers in the world’s top cocoa-producing regions are abandoning their crops despite high record prices, The Wall Street Journal reports. A combination of bad weather, disease, and failed government policies – intended to protect cocoa farmers from volatile swings in global markets – has farmers in Ghana and Ivory Coast uprooting their cocoa crops and reseeding their fields. Cacao swollen shoot virus, a disease that causes root necrosis and kills cocoa trees, has afflicted cocoa crops in recent years. Another factor in farmers’ decisions to abandon cocoa is faulty government policies, including a fixed price that the countries pay farmers for their beans that’s prevented growers from profiting on the price rise, WSJ reports. Cocoa production in Ivory Coast dropped 22% during the 12-month season that ended Sept. 30, from the same period a year earlier, while Ghana’s output plunged 27% over the same period, according to the International Cocoa Organization.
- A rule proposed in the waning days of the Biden administration would require food manufacturers to display new labels on the front of packages flagging key nutrition information on salt, added sugar, and saturated fat, The Wall Street Journal reports. The new rule proposed by the Food and Drug Administration in January is meant to help US consumers make healthier dietary choices. The new labels, dubbed a “nutrition info box,” would appear on the front of packages, according to WSJ. The agency currently requires most packaged foods to display a nutritional label, usually on the back or side of the box. The FDA said it would accept public comments on its proposal until May 16. If the rule is finalized, food manufacturers would be required to add the new labels to most packaged food products three to four years after it takes effect.
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