Global Bakery Contract Manufacturing Market - 2022-2029

Global Bakery Contract Manufacturing Market - 2022-2029

Market Overview

Bakery contract manufacturing market was valued at USD XX million in 2021. It is forecasted to reach USD XX million by 2029, growing at a CAGR of 9.6% during the forecast period (2022-2029). Bakery contract manufacturing is where a manufacturer contracts with a firm for components or products. It is a form of outsourcing.

The key benefits of bakery contract manufacturing include the absence of brand-building expenses, stable revenue and minimal investment risk, absence of the requirement for a sizable sales team, and absence of a procurement department. The demand for baked goods is projected to be driven by changing lifestyles, a growing middle-class population, and rising disposable incomes, which will support the market for bakery contract manufacturing.

Market Dynamics:

Growing demand for prepared food products generates a need for production capacity, thus increasing the demand for bakery contract manufacturing

Food processors had been forced to rely on contract manufacturers as the demand for ready-to-eat food products surged in 2020 because companies could not produce on such a large scale. Due to OEMs' limited manufacturing capacity and expanding food producers, outsourcing manufacturing is rising. Food companies may now easily expand because of the value-added services that food contract manufacturers have started to provide, including packaging, research, consulting, and warehousing. Many contract manufacturers could obtain long-term deals that propelled them to the top.

In addition, private equity investments have allowed contract manufacturers to expand their capacity and provide other important services. Over the years, bakery companies have become smarter about using contract manufacturers to avoid the additional costs associated with manufacturing. Food companies can also release cash flow, which has played an important role during a pandemic and create a favorable environment for manufacturers to thrive. Additionally, it is anticipated that the popularity of commercials featuring appealing images and the accessibility of baked goods in a wide range of flavors will positively impact the market for processed food and, by extension, bakery contract manufacturing.

However, the growing prices of input raw materials in baked goods are expected to reduce market sales, restraining market growth.

Market Segmentation:

Manufacturing segment for the highest share in the global bakery contract manufacturing market

In 2021, the manufacturing segment had the highest revenue share of more than XX percent. The increasing use of robotics and automation technology in the bakery sector improves both the effectiveness and output of contract bakers and the quality of baked goods. Automation technologies help minimize involvement in the baking process, lower the risk of food contamination, and encourage the creation of high-quality baked items. With the need for efficient overall bakery production, bakeries may choose to adopt modern baking techniques or outsource their baking operations due to growing labor and energy costs across the field.

Geographical Penetration:

Europe is the dominating region during the forecast period

In 2021, Europe had the highest revenue share of almost XX percent. Consumers' diet shifts and preferences for nutritious foods and beverages are some of the significant trends seen in Europe's food and beverage business that is projected to increase demand for products. Additionally, one of the most dynamic food industries in the European Union (EU) is the bakery, which is strongly influenced by continuous customer demand changes and frequent developments. Bread and biscuits continue to gain popularity due to high consumption, with Europe continuing to be the biggest consumer of baked products. According to 2010 research by the European Commission, there were around 32 million tonnes of bread sold in the EU 27 countries. There are over 1,000 plant bakeries in Europe overall, with nations like Bulgaria, the Netherlands, and the UK having the biggest market shares, followed by Finland. As a result, there will be a demand for bakery contract manufacturing as production capacity for bakery items is needed.

Competitive Landscape:

The major players covered in the bakery contract manufacturing market report are De Banketgroep b.v, Haco Holding AG, PacMoore Products, Inc., Blackfriars Bakery, Southern Bakeries, LLC, Cibus Nexum B.V., Hearthside Food Solutions LLC, Perfection Foods Ltd, Richmond Baking Co., and Adventure Bakery LLC among other domestic and global players. Consolidation along the supply chain has become more prominent for major manufacturers. Additionally, businesses have started to provide additional value-added services, including packaging, R&D expertise, and storage, which has boosted industry expansion. A modernized supply chain strategy that focuses production at the centre and gives bakery businesses a competitive edge is starting to gain traction in the industry. Sales increase as a result and cross-border risks are reduced. For example, Hearthside Food Solutions, LLC, the industry’s leading contract manufacturer, completed the acquisition of Weston Foods Ambient Division assets in November 2021. The acquired Ambient Division assets include six North American locations producing cookies, crackers, cones, wafers and related baked products. The completed acquisition expands the Hearthside network to 43 facilities in the US, Europe, and now Canada.

COVID-19 Impact:

Positive impact on the global bakery contract manufacturing market

The COVID crisis impacted every component of the food supply chain, which is one of the most crucial components of any economy, from the farm to the consumer. The pandemic affected consumer demand, the labor movement, and bakery production facilities. It also impacted laws regulating the food industry, which limited trade and put financial restrictions on the food supply chain. The COVID-19 pandemic, on the other side, has prompted panicked consumers to stock comfort foods and reorganize the supply chain, which has benefited the contract manufacturing industry. Convenience food consumption significantly increased due to the extended lockdowns forced on by the COVID-19 pandemic, which kept people holed up in their houses. Contract extension opportunities for bakery contract manufacturers have emerged due to the rising demand for bakery products. The pandemic also led to a supply chain reorganization, which was expected to boost industrial growth. a result, bakery contract manufacturing boosted market sales during the pandemic.

The global bakery contract manufacturing market report would provide an access to approximately 45 market data tables, 32 figures and 170 pages