Commercial and Retail Bakeries

The 11,075 bakeries in the US produce bread, rolls, and other baked goods. 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.

Dietary Trends Affect Demand

Trends and fads that drive food preferences can impact demand for bakery products.

Variable Costs Impact Margins

The cost of ingredients, such as flour, sugar, cocoa, and dairy products, can vary and affect margins.

Oct 20, 2026 - Declining Demand for Packaged Bread

• Traditional packaged bread sales continue to struggle as consumers shift toward alternative bread varieties and convenient meal options, according to an October report from Baking Business. US sandwich bread sales fell 1.5% to $9.97 billion during the 52 weeks ending August 9, while unit sales declined 3.3%, according to Circana. Consumers are making fewer sandwiches, choosing snacks and other lunch options, and becoming more price-conscious. Meanwhile, specialty bread sales rose 9%, and crusty and meal breads gained 7%. For commercial bakeries, declining demand for traditional white and wheat loaves could pressure production volumes and profitability. Manufacturers may need to diversify into artisan, sourdough, high-protein, and other specialty breads while offering affordable options to retain budget-conscious shoppers.
• The holiday season is fast approaching and with it opportunities for bakeries to capture holiday spending, Baking Business reported in September. Commercial and retail bakeries can boost holiday dessert sales this year by combining familiar favorites with fresh flavors and smarter merchandising. While traditional pumpkin, pecan, and apple pies remain important, consumers are also showing interest in seasonal twists, unexpected flavor combinations, bold textures, and desserts inspired by familiar candy, cookie, and ice cream flavors. For commercial bakeries, that creates opportunities to develop new products without straying too far from flavors consumers already know. Retail bakeries can increase sales by placing grab-and-go desserts and snack pies in high-traffic areas beyond the bakery department. Cross-merchandising desserts with ice cream, whipped toppings, and other complementary products can also encourage impulse purchases and larger baskets. Successful holiday strategies will balance innovation with familiarity while using prominent displays and cross-merchandising to generate additional sales.
• Whole wheat flour production remained steady in the second quarter of 2026 at 4.206 million hundredweight, essentially unchanged from both the previous quarter and a year earlier, according to USDA data. The figures suggest demand has stabilized after earlier declines, with whole wheat accounting for 4.1% of total US flour production for the fifth consecutive quarter. For commercial and retail bakeries, this stability points to consistent supplies and steady consumer demand for whole grain baked goods, making ingredient purchasing and production planning more predictable. However, year-to-date production remained 3.1% below the first half of 2025, indicating that demand has leveled off rather than rebounded. Despite longstanding dietary guidance encouraging Americans to eat more whole grains, stable whole wheat flour production suggests consumers have yet to significantly increase their consumption of whole grain baked goods.
• Producer prices for retail bakeries rose 2.4% in September compared to a year ago, after rising 4.7% in the previous September-to-September annual comparison, according to the latest US Bureau of Labor Statistics data. Producer prices for retail and commercial bakeries are at record highs driven by the rising cost of sugar and other ingredients, energy, labor, and other inputs. At the retail level, the price of bakery products rose 1.7% year over year in September but was unchanged from August, according to the Labor Department’s September 2026 Consumer Price Index report. Employment by bread and bakery product manufacturers grew 1.6% year over year in August, while the average industry wage rose 3.7% over the same period to $24.12 per hour, easing from its high in July, BLS data show.

Industry size & Structure

The average commercial bakery employs 68 workers and generates about $16.2 million annually, while the average retail bakery employs 12 workers and generates about $858,000 annually.

• The bakery industry comprises about 11,075 firms that employ about 271,300 workers and generate about $47.2 billion annually.
• Commercial bakeries account for 22% of firms and 75% 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), J.M. Smucker-owned Hostess Brands, and McKee Foods (Drake’s Cakes, Little Debbie).
• Bread is a standard household staple, with per capita consumption in the US of about 57 pounds annually.