To identify those mega trends and underlying factors that have been affecting the industry over the long run, Baking & Snack magazine asked Kansas City-based Cypress Research to conduct a recent analysis of the Economic Census of Manufacturing data.

From a macro perspective, lifestyle changes such as the dramatic dollar swing from eating at home to dining out have shifted the industry’s customer base to food service and prepared meals-to-go in grocery and c-store chains. These retailers and others have responded with takeaway foods and in-store meals that supply alternatives to quick-serve and casual dining restaurants. Likewise, the shift toward all-day snacking to replace traditional meals has been going on for decades. However, it has accelerated even more in recent years as established manufacturers and start-up incubators roll out better-for-you offerings that are gaining greater acceptance with today’s consumers.

Such lifestyle and retail changes are redefining and restructuring how bakeries operate. From a distribution standpoint, many regional baking companies have installed multi-tiered shipping systems that now allow them to serve national accounts with a combination of fresh and frozen baked goods. From a production perspective, perhaps the greatest transition comes as the industry segues from long-term consolidation to an era of capital reinvestment.

Specifically, significant advances in technology coupled with emerging automation for the digital age are transforming the way bakers and snack producers operate. They’re also changing how bakers calculate their returns on future investments. These underlying mega-trends aren’t new, but they are accelerating in force and will potentially drive further change in the years to come.