For the past several years, the baking industry has faced a long list of serious, ongoing challenges. Ever since the pandemic landed upon the planet, producers and partners have been forced to wrangle with ever-increasing labor challenges, supply-chain tangles, and rocketing inflation.

As we flipped our calendars from 2022 to the New Year, myriad tests and trials remained, formidable as ever. However, according to a number of industry leaders, there are reasons to look on the bright side.

“Despite several years of instability related to the pandemic and ongoing supply chain disruptions, there was a strong overall level of positivity throughout the industry,” observes Kerwin Brown, president and CEO of Bakery Equipment Manufacturers and Allieds (BEMA). “Demand for baked goods among U.S. consumers also remained strong.”

Jennifer Colfelt, vice president of operations and membership with the American Bakers Association, reports that away from conversations with ABA members in recent months reflect an increased sense of industry stability.

“They figured out how to manage what volatility does come their way, and honestly, looking at our smaller- and medium-sized bakers, even our entrepreneurs who are trying to get their businesses off the ground, we're starting to see a lot of positive momentum for them.”

Another source for positive signs was the 2022 International Baking Industry Exposition (IBIE), which gathered in person for the first time in three years.

“IBIE is quickly becoming known for being an international education program. In 2022, attendees experienced close to 100 classes in nine categories,” Brown related.

Remarks Colfelt, “There was just an energy and an excitement at IBIE. Our attendees really turned out. I think it was just a wonderful opportunity for the industry to gather and be able to spend some time together. I think that was probably one of my highlights in this past year.”

Labor

Nearly every sector of the U.S. economy has struggled to find qualified, willing workers to fill job openings. Bakery is no exception, says ABA president and CEO Eric Dell, but at the same time, there have been signs the field is turning a corner.

“What I've witnessed in the last four to five months, going around and visiting with our members and talking with them onsite in their bakeries, is they’ve really moved from a situation where they were having a difficult time findings workers at all to a situation where they can find the workers now,” he remarks.

However, Dell adds, finding and recruiting workers is only part of the battle.

“It’s finding that worker at the right talent level that they need,” Dell says. “It's also retention issues now, keeping those workers in place. They're struggling with workers leaving and cycling through.”

Filling the worker gap often requires bakery leaders to look for innovative solutions. Brown says resourceful managers increasingly are exploring investment in technology, for example.

“Ongoing labor issues forced bakers to look at automated equipment solutions,” he reports. “Fundamental ROI calculations have changed because of the inability to find labor and the increased costs in doing so. Lower price points allowed bakers to look at technology differently than they might have in the past. These investments are increasingly necessary to stay competitive.”

Supply chain

Rasma Zvaners, ABA's vice president of regulatory and technical services, comments that even though it’s been three-plus years since COVID descended upon manufacturers, it continues to plague companies, including those in the baking field.

“Not to dwell on the pandemic, but that was such a challenge for the supply chain—not just in baking, but across all manufacturing. Even now, we're in almost halfway through 2023 and we still see challenges in the supply chain.”

However, she observes, bakery operations appear to be learning to adapt and show flexibility.

“I think lessons learned on that is the sector used to be very much just-in-time for some of their manufacturing needs, and I think it helps them grow and look at better ways of doing things. Now it's maybe just-in-case. We have Plan A, Plan B, and Plan C. We're doing much better than we were; we still have some kinks along the way, but it's nice to be looking forward instead of just looking back.”

Brown says other ways bakery companies are learning to manage supply-chain issues, labor, and other matters is harnessing tools like data, and collaborating with their partners.

“The use of data is becoming more important in demonstrating how to run more efficiently with less waste,” he says. “Organizations that choose a data-driven approach are also more attractive to a younger generation who is used to controlling and manipulating with computer controls at hand. We’re getting better at navigating the challenges. There’s a shared understanding of what’s at stake and knowing what’s needed to thrive, and this has taken the industry to new levels of collaboration and creativity. There is a renewed emphasis on listening between bakers and suppliers.”

Regulations

Bakers often struggle to stay on top of ever-changing laws and regulations that impact them. Zvaners remarks that groups like the ABA often work on behalf of the industry by engaging with agencies on  laws and regulatory issues effecting bakery companies, such as the Environmental Protection Agency's renewable fuels program.

“We put a tremendous effort forward to try to advocate for the sector because the challenges our members had to either accessing or just readjusting to the market demands and the price changes,” she relates. “That was a huge, huge challenge. EPA is supposed to finalize their regulations this summer on how they plan to move forward with respect to the renewable fuels. But that [being] said, some of the pricing challenges have not changed, and our sector I think is unfortunately having to adjust to some of those bumps. I also feel that they're recognizing that at some point the economics will all sort of straighten itself out, but it may not be where it was three, four years ago.”

On November 13, ABA leadership is descending upon Washington, D.C., for its Fly-In and Policy Summit, to meet with policymakers and discuss relevant industry matters. Dell says opportunities for bakery leaders to engage with lawmakers like the fly-in enable the industry to have a positive impact on legislation, and to enable legislators to make informed, rather than misguided, decisions about matters of industry importance.

“The reason that the industry needs to be here is to tell their story, so the members of Congress know how a bakery works,” he explains. “They can understand and remember, ‘That baker was in my office talking to me, and now I know how this impacts the industry, and this may not be the right way to do it.’ In short, if you are not at the table, you are on the menu.”

Future forward

As baking professionals continue to deal with issues and capitalize on opportunities, Dell says, groups like ABA will help them with both.

“If there's a challenge, there's an opportunity,” Dell says. “This allows ABA the opportunity to look at those challenges and say, ‘Hey, where can we lead? Where can we make a difference for feeding America?’”

Brown remarks, “As individuals and as an industry, we’re here to provide solutions to the pain points of our customers,” he relates. This is never a straightforward path, and we often don’t know if solutions will withstand the test of time or other trends/markers often out of our control. It’s up to us to look for ways to venture into the unknown—investing in education, networking, and partnerships that will benefit the industry now and in the future.”

One of the resources on the calendar is NEXUS, an event taking place in Dallas September 25–28. Produced jointly by ABA and BEMA, NEXUS offers programming and sessions designed to engage and connect professionals at every level, from both bakers and suppliers, at an in-person setting.

“The ability to again be in-person has allowed many to build and re-establish connections,” Brown says. “This has become a powerful catalyst for change and innovation within the industry.”

What’s more, remarks Zvaners, those in the baking industry will continue to lean on each other for mutual benefit.