The ancient Greek philosopher Heraclitus was known for his central belief that change is constant—a point clearly illustrated by the fantastic innovation seen across every bakery category today. Yet bread is the oldest form of food known to humankind, dating back thousands of years. And we still eat it today.

Such is the state of the bakery industry in 2018. We see constant innovation—and steadfastly rely on a core of traditional, time-tested, category-leading bakery products.

State of the Industry: Bakery Report
Overview | Bread | Tortillas | Sweet Goods | Snack Cakes | Pizza | Desserts | Cookies | Buns & Rolls | Bars | Breakfast Products

And innovation would grow exponentially further in just the right environment.

But today we also face multiple aspects related to regulatory matters, sanitary design and workforce development that collectively hold the industry back—primarily the need for change—while other aspects of these same issues seek to drive it into a more-profitable future.

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Regulatory matters

Robb MacKie, president and CEO, American Bakers Association (ABA), Washington, D.C., notes that in developing ABA’s new strategic plan, one element clearly jumped out as critically important to the success of the industry: the overwhelming concern for the cost of government overreach at all levels of government. “This is significantly compressing the operating margins of bakers, as well as their customers. This compression limits capital for facilities, innovation and retaining the highly skilled talent of the industry.” In 2016, the Cato Institute estimated the cost of new and impending federal regulations at $1.2 trillion.

We must reach a reasonable middle ground.

“Since the 2016 election, ABA has successfully worked hard to eliminate or scale back the most onerous regulatory proposals,” says MacKie. “Working with willing allies in the administration, Congress and the manufacturing sector, numerous Department of Labor, Occupational Safety and Health Administration, Environmental Protection Agency and Department of Transportation regulations have been stopped before being finalized, or outright repealed. These actions, coupled with a massive tax relief packaged aimed at boosting domestic manufacturing—including the largest sector of manufacturing, the food industry—have helped to take the pressure off bakers.”

But much work awaits—mostly with FDA. “ABA has historically had a close working relationship with FDA across administrations of both parties,” says MacKie, “so it is surprising that FDA—in an administration that favors regulatory relief—has been so intransigent on issues such as fiber, added sugars, Nutrition Facts labeling and trans fat.” ABA will focus on the myriad federal labeling proposals over the next year and a half to try to mitigate unnecessary duplication and compliance costs, he notes.

“We anticipate significant activity around the final Nutrition Facts label in the coming year,” says Brian Strouts, vice president, baking and food technical services, AIB International, Manhattan, KS. This will include activity related to guidance on “intrinsic and intact” fibers, conclusions on the nondigestible carbohydrates under FDA review and a final rule extending the compliance dates for the new version of the Nutrition Facts label.

“In addition, FDA will provide more details on a nutrition strategy to ‘reduce preventable death and disease through better nutrition,’” says Strouts.

“Food companies should anticipate that the compliance date for the new Nutrition Facts label will be extended to January 2020, which means several steps should be taken to get ready to meet the new regulations,” says Strouts. “AIB International has already updated its Nutrition Labeling database to meet the current understanding of the regulations and is poised to make additional adjustments pending final guidance documents.”


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Sanitary design

The Food Processing Suppliers Association (FPSA) Bakery Council address a multitude of issues related to bakery equipment, operations and food safety, notes David Seckman, president and CEO, FPSA, McLean, VA. “FSMA challenges the abilities of companies to meet the recordkeeping and documentation requirements.” He also notes that the need for installing new, sanitary equipment will drive capital expenses.

“It’s getting to the point where bakeries are encouraged, due to updated and improved standards, to refrain from purchasing older, used equipment or equipment with painted surfaces, which—up until recently—would have been a normal practice,” says Ken Hagedorn, vice president of sales and partner, Naegele, Inc., Alsip, IL, past chair, FPSA Bakery Council. “As an industry, we have to start thinking about improved sanitary standards similar to what the other food industries have already addressed.”

One of the values FPSA brings to the industry is the cross-pollination of food industry segments, notes Dante Pietrinferni, president, Pacproinc, Packaging Progressions, Inc., Souderton, PA, vice chair, FPSA Bakery Council. “For example, we have a lot of member companies serving the meat industry that could potentially help bakery companies understand sanitary design requirements. FDA inspections will force a lot of these changes.”

We have also seen a push toward sustainability, says Tony Graves, project manager, The Dennis Group, Springfield, MA, chair, FPSA Bakery Council. “More companies in the baking industry are making investments toward sustainability. They’re starting to see the long-term benefits of these investments.”


Workforce development

Workforce development is perhaps the top issue in baking today. “Workforce turnover is especially challenging on the production floor,” says Dave Van Laar, senior advisor to the president and CEO, ABA. “New employees come with little or no food experience and must quickly be taught the fundamentals. GMP and food-safety training programs are available, but training in the basics of baking needs to be stronger.”

Recognizing this need through member involvement, ABA is enhancing the Entry Level Training (ELT) with an emphasis on engaging, hands-on learning. ABA will soon offer an ELT “Train the Trainer” module to allow bakers to conduct ELT internally on their own schedule, notes Van Laar. “The hands-on ELT training not only teaches the effects of variations seen on the production floor, but allows students to experiment with these changes and observe the changes in the final product. This provides a better understanding when troubleshooting production problems. Training plant trainers will allow bakeries to expand their reach and then train on their own schedules. These efforts have been successful for both new employees and more-seasoned bakers.”

Van Laar has seen that, time and again, training sessions regularly feature one baker who all other employees look to for answers. “Unfortunately, many of those experienced bakers are nearing retirement age. Fortunately, the path those seasoned employees took is still available through ABA’s “Cookie & Cracker Academy Manufacturing Course.” This training tool will bring less-experienced employees to a level of filling those positions vacated by retiring leadership.

“Numerous studies show that companies that invest in the long-term development of their key employees experience far greater engagement and less turnover,” says Van Laar. “Investing in those trainees instills pride and confidence that they are essential to a well-established industry with potential for individual growth.”

To help meet the need for more training, Strouts notes that AIB International has released several new online training courses in the last six months, including “Food Labeling Online,” a self-paced, online course covering food labeling basics, and the “Baking Specialist Online Collection,” a series of nine self-paced, online courses covering topics from ingredient basics to specific bakery products.

“FSMA compliance for the industry is still a key priority,” says Strouts. “Fully understanding and implementing the programs and controls needed for compliance is a critical top goal for all organizations. As the regulations impact even very small businesses in fall 2018, an additional layer of food companies will need support. This has the potential to impact even large companies that have a network of co-manufacturers supporting their complete product portfolio.” In order to help all companies comply with FSMA, AIB International has developed an “FSMA Compliance Connection” portal.

Kent Van Amburg, CAE, executive director, American Society of Baking (ASB), Kansas City, MO, notes that one way ASB is addressing the workforce development problem is by creating programs to encourage food science and technology students to seek careers in baking. “This year, the annual Product Development Competition had student teams from 15 different universities across the U.S. competing for $20,000 in scholarships,” he says.

A study commissioned by ASB and ABA, “The Workforce Gap in U.S. Commercial Baking,” identified three areas of greatest need for skilled workers in the baking: engineers, machinists and maintenance personnel. “The ASB Scholarship Program directly addresses these wholesale baking workforce challenges,” says Van Amburg. “ASB provides scholarships to university engineering students who have interned in bakeries and are interested in pursuing a career in baking after graduation. Current employees of bakeries and allied companies can also apply for one of five $4,000 scholarships to further their education at trade schools and community colleges in the areas of engineering, maintenance and mechanics.”

ASB is also creating programs to address the specific needs of engineers, says Van Amburg. “Technical sessions during ASB BakingTech focus on problems engineers are facing, and developing solutions they can take back to their bakeries.” He notes ASB is also creating workshops to be held across the country to address training needs for engineers, mechanics and maintenance personnel.

“For students interested in pursuing a career in the wholesale baking industry in the future, the ASB Scholarship Program allows them to focus on their studies instead of how they will repay their student loans,” says Monica Kline, director of business operations and education, The EnSol Group, Erwinna, PA, member, ASB Student Task Force. “For those individuals already working within the industry, the scholarship allows them to focus on advancing their career and lessens the financial strain that may hinder them from taking courses.”

Kline notes that ASB is continuing its Engineering and Maintenance/Machinist Scholarship Program for 2018–19. Summer engineering student interns and maintenance/machinist employees can apply for one of five $4,000 scholarships to help them reach their educational goals and advancement within your company.

Understanding the developmental resources available from industry supporters can go a long way toward positioning your company for successful growth into the future.

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State of the Industry: Bakery Report
Overview | Bread | Tortillas | Sweet Goods | Snack Cakes | Pizza | Desserts | Cookies | Buns & Rolls | Bars | Breakfast Products