Baking & Snack - February 2024 - 34

CAPITAL SPENDING STUDY
" BAKERS HAVE PUSHED THEIR
EXISTING LINES AND EQUIPMENT TO
THE LIMIT, AND NOW THEY HAVE TO
GO BACK AND ADDRESS THAT. "
Clay Miller, Burford Corp. and BEMA
Bakers positive about
company outlook for 2024
Yearly outlook
2024
2023
2022
2021
2024
2023
2022
2021
2024
2023
2022
2021
2024
2023
2022
2021
Very Positive
46%
48%
55%
51%
Somewhat Positive
46%
46%
39%
46%
Somewhat Negative
7%
5%
5%
2%
Very Negative
1%
1%
1%
1%
Bakers' outlook for
US industry stabilizes
35%
61%
54%
36%
11%
Better
same
15%
Data source: Baking & Snack/BEMA Industrial Baking Industry Capital Spending
Studies (2020-21, 2021-22, 2022-23, 2023-24)
9%
Worse
45%
49%
40%
42%
tive for their company's business outlook for 2024. This holds
steady from 2023's survey, which showed 48% of respondents had
a very positive outlook and 47% had a somewhat positive outlook.
" Company outlook should be our main indicator when looking
at industry health, " Ms. Hellmer said. " While outlook may have
dropped from 2022 to 2023, today's positive outlook for 2024 is
now holding steady with 2023's projections. "
This trend extended when bakers were asked about the US industrial
baking industry, with 30% of respondents having a very
positive outlook for both 2023 and 2024. For 2024's survey, however,
more bakers were somewhat positive on the US industry's
outlook - 57% in 2024 vs. 54% in 2023 - and bakers who had a
very negative outlook decreased to zero from 1% in 2023.
" The percentage of respondents reporting a somewhat or very
negative outlook hasn't moved much over the years, so it's safe to
say that bakers are not a pessimistic bunch, " Ms. Hellmer noted.
While comparing 2023 to 2024's results shows an industry holding
steady, analyzing this data across the past few years reveals
the tumultuous times the industry has endured. Respondents
have been asked every year whether the US industrial baking industry
would fare better, worse or the same as the previous year.
Respondents who predicted the industry would perform better
drastically dropped between their 2021 outlook (61%) and 2022
outlook (35%). This represents the bump the industry received
from the pandemic and the subsequent course correction.
Since that correction, however, the industry has regained
ground. In 2023, those who predicted the industry would fare
better was up to 40%, and for 2024, there's a slight increase to
42%. Notably, those saying the industry would perform worse has
also fluctuated: 11% for 2022, 15% for 2023 and 9% for 2024. The
baking industry may be coming down from its pandemic high,
but it certainly is landing in a strong position.
" At this point, both bakers and industry suppliers have experienced
record growth year after year, so this tempering we've
seen is to be expected, " Mr. Miller said. " But the industry is still
in a strong position that is elevated compared to what we saw
pre-pandemic. "
Unlike company and US industry outlook, viewpoints for the
global baking industry saw a significant shift. In 2023's study, 19%
of bakers reported a very positive outlook for the global industrial
baking industry, and in this year's survey, that number increased
to 26%. While global unrest continues, its impact on the baking
industry has lessened.
Positive indicators inside and outside the baking industry have
bakers feeling comfortable enough to continue investing in their
operations. More than half of respondents said their companies
plan to increase their capital investments compared to the past
year. And for the fifth year in a row, bakers report that they have
designated more annual revenue to capital spending projects.
In 2024, 54% of bakers projected they will increase their capital
investments compared to 2023, 33% said they would remain the
same and 13% said they would decrease their capital investments.
These numbers are nearly identical when zeroed in on equipment
34 Baking & Snack February 2024 / www.bakingbusiness.com
2021 Outlook
2022 Outlook
2023 Outlook
2024 Outlook
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Baking & Snack - February 2024

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