Yes, things change — often for the better, sometimes for the worse, but never without consequences. While much is the same in the baking industry since it last gathered in Las Vegas for IBIE, much has altered in the landscape. The entire structure of the industry has undergone dramatic upheaval, notably the acquisition of one top baker by another and the exit from the marketplace of yet another major baker. In 2010, many analysts discussed overcapacity and underutilization of capital assets, but now they focus on undercapacity and full utilization.
Partly to compensate for the tight situation in production capacity, two large players are executing strong capital development plans. Additionally, as one company that exited the marketplace now rises again, its new management team will need to seriously consider how to address key operational issues that led to its exit. For all key players, it will be imperative to design and build highly innovative new production facilities.
New capacity isn’t driving just the large players in the industry. A list of the most-talked-about new bakeries is dominated by mid-sized independent companies. Their main thrust is producing more product with less waste and as efficiently as possible. A tour of the newest baking facilities coming on-line the past couple of years illustrates this trend. Bakers have always been very attentive to waste and inefficient production, but that has now evolved into an absolute necessity.
A significant portion of the drive toward more efficient production has come in the area of energy and water usage. Pushed by internal cost-saving measures and customers’ demands, bakers are looking to dramatically reduce their energy usage. With the American Bakers Association (ABA) Energy Star Challenge, bakers are paying more attention than ever to suppliers who can help them deliver greater savings.
Bakers aren’t just looking to equipment suppliers to provide innovation, efficiencies and savings. With the ever-changing tastes of consumers and more emphasis on health and wellness, bakers are seeking ingredient and flavoring suppliers to partner with. As was reported at the ABA annual convention this year, consumers are more diverse and segmented than ever and bakers will need assistance to develop innovative, healthier-for-you and more flavorful products to capture the attention of those diverse segments.
As hard as it is to imagine, it was just three years ago that two landmark pieces of legislation passed that will alter the landscape of the baking industry and change how bakers do business. The Affordable Care Act, familiarly known as Obamacare, and the Food Safety Modernization Act (FSMA) will impact bakers and their suppliers in ways we can barely imagine today.
Food safety is another area where myriad regulations are teed up to be released. ABA has counted in excess of 40 major food safety regulatory initiatives ranging from traceability, verification of foreign ingredient suppliers and process control plans. The complexity of FSMA regulations and controls will focus bakers on finding equipment that is easier to sanitize and maintain; exploring ways to reduce potential cross contamination; and tracing product through the entire supply chain.
There was a time when you could measure change in the baking industry by decades. In today’s world with its high rate of change, more complex marketplace and drive for product and process innovation, bakers now measure change in years or quarters. IBIE 2013 couldn’t be coming too soon for the industry.