Baking&Snack - February 2017 - 41

If a bakery isn't leaving its building - but it's ready to
loosen those purse strings a bit - those dollars
will likely target automation.
tion and rapid growth anytime soon. Baking companies are nothing if not calculated. They don't splurge
on the unknown. They fix what's broken and improve
what's working.
According the survey, the average company-wide
operating capacity was just shy of 73%. "We're seeing a little over a quarter of availability," Ms. Hellmer
said. "There's room to increase operations with existing capacity, so companies are not yet maxed out."
When margins are tight and operations aren't yet at
capacity, spending, while strategic, is still happening.
In fact, 86% of bakers reported making major capital
investments in the past two to three years, and 79%
still reported planning for new ones in 2017 - 55%
indicated plans to increase investments over 2016.
This year, on average, 13.8% of revenue looks to be
going back into capital investments, and about half
of that (47.9%) will be used for equipment, according to the survey. Specifically, the bulk of the focus
is being placed on packaging (73%), mixing (61%),
makeup/dividing/depositing (58%) and cooling/
freezing (55%).
Considering the nature of the industry, most of
the concentration for investments is naturally being
seen in new equipment and upgrades, as well some
expansion, rather than in new construction. If a
bakery isn't leaving its building - but it's ready to
loosen those purse strings a bit - those dollars will
likely target automation and eliminating bottlenecks
to max out capacity. Think robotics in packaging or
digital upgrades with tools such as tablets.
At the end of the day, it's practically impossible to
gauge investment trends without a having a grasp on
the health of the industry. The industry outlook creates a context to understanding the motivations behind
capital spending and equipment purchasing. Lucky for
bakers and their suppliers, the outlook is bright.
Between the mediocre state of general manufacturing and high consumer confidence, commercial
baking seems to be sitting in the catbird seat.
"Bakers are telling us that the economy is growing," Ms. Hellmer said. "For so many years, we've
been hedging our bets, saying, 'We're not sure, yet,'
or 'The industry is unsure.' Finally we get to blow
the horn and say bakers are actually optimistic
about the future."

Was your company revenue up, steady or
down at the end of 2016?

6
32

UP
STEADY
DOWN

By what percent did your company's revenue
change in 2016 compared with 2015?

Average

7.4%

Change

Do you expect company revenue
to be up, steady or down in 2017?

32
%

STEADY

DOWN

By what percent do you expect your
company's revenue to change in 2017
compared with 2016?

Average

Change
All data courtesy Cypress Research Associates

7.0%
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