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
Jan 20, 2025 - FDA Proposes Warning Labels
- A new 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.
- According to a new study, people taking Ozempic and other GLP-1 drugs for weight loss are spending less at the grocery store, Newsweek reports. The study, conducted by Cornell University's SC Johnson College of Business, found that people using GLP-1 drugs saved 5.5% on their groceries six months after first taking the drug, amounting to about $416 in grocery savings. The hardest hit grocery categories included sweet bakery treats, chips, and savory snacks, which saw the largest decrease in spending among GLP-1 users, the study found. The data may prompt food manufacturers, including bakeries, to evaluate their product formulations, portion sizes, and packaging strategies "to align with changing consumption patterns," the study’s authors wrote. Cornell's Sylvia Hristakeva, who conducted the study, told Newsweek "Companies relying heavily on calorie-dense or processed products will likely reassess their product portfolios to remain competitive and adapt to these shifting consumption patterns."
- The bakery industry is bracing for a major shakeup under President Donald Trump’s nominee to head the Department of Health and Human Services, Robert F Kennedy Jr, Bakery & Snacks reports. Kennedy’s health agenda could unleash a wave of regulatory changes for manufacturers of baked goods and pastries and the broader food industry, according to B&S. An environmental lawyer by trade, Kenedy is an outspoken critic of ultra-processed foods, artificial additives, and Big Food in general, which he says is “literally poisoning our children” and primarily responsible for the chronic disease epidemic in the US. Manufacturers, including Hostess, are voicing concerns over possible sugar taxes and reformulation mandates, B&S notes, adding Kennedy is a proponent of greater transparency in food production, particularly in ingredient use and labelling. Still, his control over what Americans eat is limited and his appointment requires Senate confirmation.
- Wholesale price inflation for baked goods is easing, according to the latest US Bureau of Labor Statistics data. The producer price index for commercial and retail bakeries, which measures prices before reaching consumers, inched up 0.4% in November compared to a year ago after rising 4.2% in the previous November-versus-November annual comparison, BLS data shows. Employment by the industry grew 5% year over year in October, while average industry wages increased 2.5% over the same period to $22.10 per hour, per the BLS. Industry payrolls continue to rise amid falling profits for food companies, which tumbled nearly 30% in the second quarter versus Q2 2023 and 29% compared to Q1 2024, Census Bureau data shows.
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