Amid change in baking, importance of innovation must not be lost
BakingBusiness.com, Dec. 18, 2012
by Josh Sosland

In looking forward to 2013 and how the baking industry will change in the year to come, conversations have been dominated by two subjects — changes in the industry structure amid consolidation and the demise of Hostess Brands and the impact on margins and volume of what remains a challenging input cost environment.

With such issues looming so large, the importance of new product pipelines has been relegated to the back burner in an industry that has received a true spark of energy in recent years from innovations like bread thins and “made with whole grain” products. Whether such breakthrough products loom around the corner, one clear area of impending innovation is an expansion of gluten-free products in the baking aisle.

Indeed it is likely that 2013 will be the year in which it becomes clear whether bakers are able to overcome the extraordinary challenges of offering gluten-free varieties of the ultimate gluten-containing food. According to one investment analyst, sales of the top-selling brand of gluten-free bread exceeded $120 million over the past 12 months. Meanwhile, Flowers Foods, Inc. said that after starting and then stopping a gluten-free bread trial about a year ago, the company will try again in 2013.

Asked whether the market could grow to $1 billion in the medium term, the analyst was skeptical. How large it will grow and even whether the category has any more staying power than the reduced carbohydrate products of yore also remain to be seen.