For the longest time, the industrial bakery sector has been lagging other industries in terms of innovation. The reason for this: mass production did not lend itself to quality bread and varied products. The paradigm in the past has always been quality times price equals value. If you got that ratio right, consumers would be happy, and they would be loyal. But this is a new era. Consumers know that the technology exists to get them exactly what they want no matter the industry – and as such, they not only want premium quality products now, they want variety as well. How is the manufacturer to account for the numerous modern challenges of the industrial bakery sector?
Increasingly demanding consumers
The industrial bakery sector is no exception to the general rule: the new generation has consumer habits to which industrialists must comply. To begin with, there is the proliferation of speeches about what constitutes a good diet. “Consumers are more interested in food as preventive medicine because they realize their diet is a big component of their health so there’s an increase desire to know what they are eating,” shares Megan Poinski, senior Food Dive editor. Then there is the variety of consumption patterns according to social origin and group affiliation, to the point that food has become a strong marker of identity, confirming more than ever the famous quote from the 18th century French lawyer and politician Jean Anthelme Brillat-Savarin: “Tell me what you eat: I will tell you what you are”. Finally, global ecological awareness has led to increasingly high environmental expectations among consumers. All this has had an impact on food consumption patterns.
In addition, these fundamental movements are accompanied by the habit inherited from the digital revolution of perpetual change and rapid consumer fatigue. The internet generation is zapping and surfing on the screens as well as in its plate…
At the same time the regulatory and safety requirements for fresh food producers have exploded. Manufacturers are faced with the unenviable task of not only keeping up with compliance and the complexities of the globalized marketplace, but also standing out from the crowd through innovative products. Just as the beverage industry sees an exponential growth in the diversity of products offered, and we see the personalization of retail products becoming standard practice, the bakery sector is also expected to keep up with these constant evolutions.
A global trend
The whole world is concerned by this. Even local businesses must adapt to these global consumption patterns. Whether this is in Asia, Africa, or the Middle East, producers are constantly adapting to consumer demands. The purpose is always to provide the globally buoyed middle-class of consumers with more choice and excitement even as the manufacturers move from crafts to mass production.
Sometimes it even consists in creating alliances between very different cultural entities in order to offer a variety of products that can be adapted to all palates. For instance, Wilmar International, an agribusiness conglomerate headed by CEO Kuok Khoon Hong, announced that it has reached an agreement with Associated British Foods P.L.C. to form a joint venture in China for the manufacture, sale and distribution of yeast and bakery ingredients. This decision will allow Wilmar, through its subsidiary Yihai Kerry Arawana Holdings Co. to capture the growth of traditional Chinese bakery products as well as Western style bakery products.
In Nigeria, Tosan Jemide, a young pastry chef trained in the United Kingdom became an entrepreneur and national star known as the “African Cake Maestro”, starting by making wedding cakes himself. Gradually he managed to move from craftsmanship to mass production while always respecting his principles of excellence and adaptability to the desires of consumers. “I think it is the same for every industry. Those who subject themselves to exacting standards and maintain them through the years always endure, no matter the weather. And so when you hear all the nice things being said about Cakes by Tosan today, it is mainly because we have refused to compromise on excellence,” he said. For him, product quality is not incompatible with mass production and he is now at the head of four brands, including Top Crust Bakery, an industrial bakery.
In Saudi Arabia, the Al Munajem Group subsidiary, Gulf Catering Food Factory (GCFF) has also a strong interest in being attentive to these new trends. GCFF is a prime example of a regional producer with a strong market position, as well as government department contracts, that is likely to make strides towards the above-mentioned quantitative and flexible approach if pursued correctly. Indeed, in 2018 McKinsey & Company published a survey examining the consumption habits of Saudi people. The survey highlighted rapid changes, including a loss of product and brand loyalty. Under the stewardship of CEO Ahmed Bawazir, and with the backing of industry heavyweight, Ibrahim Ali Abdullah Munajem, the company is set for a significant evolution in its offering, one which should see the consolidation of an already firm grip on the market.
While these types of countries could no doubt do with a technological upgrade in the bakery industry, their revolutionaries also need to think outside the box when it comes to their products, concepts, and partners, as some already do. If these companies play their cards right, meeting industry challenges head on, then they set themselves up for huge gains in the coming years.
How to be equipped for these demands
The new challenges in the bakery sector are centered around continuously changing consumer demands that are forcing companies to become more flexible in their production capacity. Only by doing so can they efficiently make different types of product simultaneously in response to new trends.
Baked goods manufacturers having realized that they need a diverse variation to their products, a core series of items is simply not enough anymore. That’s why manufacturers need to also be agile, reactive with their ideas – the difference between keeping up with the latest trend and missing it completely is a matter of fractional margins. It must therefore be on the manufacturers’ minds from the very beginning when choosing equipment and installations. This is what Olivier Sergent, president of the French company Mecatherm, which designs, manufactures and installs production lines for industrial bakeries, noted: “The world is changing increasingly fast and for a very long time the challenge for manufacturers was to play on their price/quality ratio. […] on one hand manufacturers need high capacity lines for improving delivery time and service yet at the same time to be flexible, developing new lines to be first on the market.”
Also, how efficient are the installations themselves, in terms of energy. With the pressure being exerted by environmentalists, the red tape factor is only going to increase. Already wasteful machines and poorly organized bake schedules hurt your bottom line, but it won’t be long before they may well also incur unwanted scrutiny. The entire supply chain must now be brought into line with environmental requirements. Packaging, for example, the last link in the food industry chain, is particularly scrutinized by consumers on this issue. It is in this perspective that Grupo Bimbo, a Mexican multinational bakery product manufacturing company headquartered in Mexico City announced its launch of a compostable packaging for bread.
The world is changing fast and the industrial bakery industry must keep pace. Today, the requirements of speed and productivity have remained the same for industrialists, but these new consumer demands have been added. Manufacturers who have adapted by adjusting their entire supply chain, from production to delivery have every chance of surviving. The technology exists to allow them to remain true to their core business while innovating and remaining agile. Nowadays there is no shortage of ideas and tools!
Author: Christian Newman