Health consciousness and changing consumer tastes are expected to boost revenue slightly
New York, NY (PRWEB) September 30, 2014
Dynamic health trends, changing consumer tastes and falling demand have hampered growth in the Bread Production industry over the past five years. Popular diets have caused consumers to moderate their consumption of a variety of industry goods while growing consumer preferences for premium varieties shrunk the market for white loaf bread and other conventional bread products. Successful operators proactively responded by introducing more nutritious products to attract health-conscious consumers, as others extended product offerings to include specialty varieties that command a premium price.
According to IBISWorld Industry Analyst Ibrahim Yucel, “Growing health-consciousness and decreased disposable income at the beginning of the five-year period to 2014 has nonetheless curbed demand for industry goods from grocery retailers, the foodservice sector and other key downstream markets.” While this decline in demand was somewhat mitigated since bread is a staple of the American diet, many consumers still traded down to private label products in order to save money due to lower levels of discretionary income. Since private label products are less profitable, the entire industry suffered from 2009 to 2010. In the past three years, however, growing demand for premium products and rapid gains in exports have helped boost industry performance. Industry revenue is expected to increase an annualized 0.2% to reach $39.1 billion in the five years to 2014.
Along with frugal consumer spending, producers have had to contend with America's diverse and ever-changing palate. Some manufacturers developed products to cater to the growing demand for multigrain and gluten-free products. For example, major player Bimbo Bakeries USA introduced Thomas' Bagel thins, while Flowers Foods expanded its Cobblestone specialty breads selection. In addition to product innovations that have reignited demand, prices for several key inputs such as wheat and sugar are expected to stabilize in 2014. Therefore, IBISWorld anticipates industry revenue to grow 1.1% over this year.
“These trends in health consciousness and changing consumer tastes are expected to continue in the next five years as companies continue to expand their portfolio of nutritious and specialty products,” says Yucel. Similar developments in neighboring countries like Mexico and Canada will also drive growth in exports, helping boost the performance of domestic industry participants. As a result, revenue is projected to increase in the five years to 2019.
For more information, visit IBISWorld’s Bread Production in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in the Bread Production industry manufacture fresh and frozen bread and other baked goods that include cakes, muffins and croissants, but exclude cookies and crackers. Retail and commercial establishments then sell these products to downstream supermarkets, convenience stores and food-service providers. Many bakeries also sell their products directly to the public.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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