The latest COVID-19 pulse survey from Cypress Research found that in the first quarter of 2021, more than 40% of bakers plan to hire frontline workers beyond their normal expected attrition levels, highlighting the pressures that bakery companies are continuing to experience as a result of the pandemic. Marjorie Hellmer, president of Cypress Research, outlined these findings in a webinar hosted by the American Bakers Association (ABA) and Sosland Publishing Co., and sponsored by Lesaffre and Red Star Yeast Co.
“Bakers know within their own companies how their companies are doing,” said Ms. Hellmer. “But for us to get credible data from you all on the state of the industry through this incredible time is incredibly valuable to give back to you so that you can know where you are in the broader context.”
The first pulse survey in March showed outlooks leaning toward negativity, with only 35% of respondents expecting an increase in production as a long-term impact of coronavirus (COVID-19). In the latest December survey, that number increased by 12%, and uncertainty over long-term impacts had decreased from 33% to 13%.
That being said, Ms. Hellmer pointed out that a larger percentage of respondents were reporting high levels of disruption by the end of 2020. It had become apparent over time that situations such as stay-at-home orders, minimizing the number of people in plants and discovering better processes with supply chain partners were evolving as the year went on.
Ms. Hellmer also pointed to transportation, in particular, being a pain point across manufacturing, but that putting a data point on transportation and distribution would be important as solutions continue to be sought.
“I think all of the supply partners are doing amazing jobs trying to meet the needs of the bakery manufacturers, so to see manageable levels of disruption — albeit ongoing, but manageable for the most part — was really good to see,” she said.
As far as low-level manufacturer concern about running out of PPE supply, 66% of respondents reported being unconcerned about running out of supply at their company within the next six months. This was a new industry level insight, according to Ms. Hellmer.
“We were relieved to see that there wasn’t a great deal of widespread pain points with regard to PPE supply,” she said. “We felt that it was too early with the vaccine rollout to get any kind of indicators or measures on that, so that is something we would like to continue looking at in the future.”
There were other positive numbers reported in the December survey as well. According to the respondents, over the course of 2020 bakers reported positive sales trends in the grocery channel. Though this percentage has seen some moderation since March, 67% of respondents are still reporting that sales were up since the outbreak in the December survey. Budget-friendly channels like dollar and drug stores saw an increase in March that by December had fallen back.
“Research suggests that as the pandemic has worn on and fatigued so many, many Americans have become less price conscious in certain categories, preferring to indulge in those premium baked goods that bring with them just a little bit of comfort during these challenging times,” Ms. Hellmer said.
The surveys showed retail to be the most resilient channel for baking manufacturers during COVID-19, while the restaurant and foodservice channel continues to take the biggest hits. The December survey reflected minor channel recovery, as restaurants continue to pivot their attention toward contactless ordering and dining options and off-sight dining models, with only 7% of respondents reporting heightened sales, and 83% still saying that sales are down.
“According to a recent study by the International Federation for Information Processing (IFIP), the No. 1 consumer concern for 2021 is food handling and preparation related to COVID-19,” Ms. Hellmer said. “This signals to us that until the public health crisis recedes, we can likely expect this channel to continue with those struggles.”
On March 22 at ABA’s convention, Ms. Hellmer will be moderating a panel discussion with industry experts using the data insights as, “a backdrop to spur conversation about ways bakery manufacturers and their supply chain partners have used their experiences throughout COVID-19 to develop solutions to minimize future stresses attached to unanticipated events,” she said. “We’ll be talking about ways to future-proof commercial baking and better position the industry for ongoing success.”
This panel discussion, she said, is designed to look forward.