Bakery Bites: Looking Back and Looking Ahead
January 31, 2024 | 1 min to read
In 2023, the US bakery industry improved, benefiting from lower commodities prices and restored margins, despite a decline in volume. The year, being a true post-pandemic period, saw reduced demand as consumers adjusted to a fully open economy. This decrease in volume, influenced by rising prices, is expected to remain a key concern moving forward. However, with anticipated stability in commodities and fewer supply chain issues, there is hope for promotional efforts to boost sales.
With the holiday season officially over, we look back at the main developments in US bakery in 2023 and speculate on what to expect in the new year. We see the industry is in better shape now than a year ago, mostly due to lower commodities prices, restored margins, and boosted knowledge of how to navigate a volatile environment. The recent drop in volume remains worrisome and is likely to be the main point of attention for bakeries in the new year. On a positive note, we expect a more stable environment for commodities and limited supply chain constraints in the year ahead that, in addition to improved margins, should create room for promotional activity to restore volumes.
Prices up, volume down
Volume in most bakery retail categories is lower than it was in the previous year. This is somewhat expected, as 2023 was the true post-pandemic year with a fully open economy and no major new Covid variant affecting Americans’ traveling and eating-out routines. Moreover, a sharp increase in prices is likely to have contributed to lower total demanded volumes.
To read the rest of the story, please go to: Rabobank