IBIE - 2022 Special Edition & Show Preview - 47

BEMA INTEL
An appetite for investment
The second quarter of 2020 - the first time BEMA
collected this data - the Member Pulse Survey
showed only 76% of bakery equipment manufacturers
were feeling somewhat positive or very
positive for the United States' industry outlook.
This survey reflected equipment suppliers' outlook
for their industry during Q2 2020, when it was
unclear what the pandemic's impact would be on
bakers' appetite for investment. As early as the
very next quarter, however, that number began to
grow to 86% in Q3 and 95% in Q4. The number of
bakery equipment manufacturers who had a positive
outlook remained above 90% until Q1 of 2022.
Even then, the number only dropped to 84% - still a
mostly sunny outlook.
" The dip in positive outlook for this latest quarter
is directly correlated to the dip in bookings for last
quarter, " said Tim Cook, chief executive officer of
Linxis Group and immediate past BEMA chairman.
" The positive side to this, however, is that after such
strong data the last couple of quarters, the outlook
is only slightly less positive overall, which is a sign of
continued strength following a very bullish period. "
Bullish is the word to describe it. From Q2 2020
to Q3 2020, the percentage of bakery equipment
manufacturers who said their bookings were up
compared to the previous quarter jumped from 13%
to 49%. That percentage leaped again from Q1 2021
to Q2 2021 from 44% to 66%. The majority of survey
respondents continuously reported their bookings
were either up or steady throughout the nearly two
Bakery equipment
manufacturers with positive
industry outlook
Q2 2020:
76%
Q3 2020: 86%
Q4 2020: 95%
years of BEMA Intel data. This heightened investment
is attributed to the imbalance in supply and
demand for baked goods.
" Demand has remained high for bakery products, "
Mr. Cook explained, referencing the IRI data. " The
industry is imbalanced right now in terms of supply
and demand, and that's spurring the investment. "
Dollar sales of commercial bread products in Q2
2020 surged by double digits compared to the same
quarter in 2019, and unit sales rose as well. Both sides
of the equation remained steady through 2021. Most
commercial bakery products experienced similar
spikes, though not to the same degree. The in-store
bakery channel, however, saw massive losses at the
beginning of the pandemic but has since recovered
fully and even seen some growth compared to prepandemic
sales. This may be due to consumers rediscovery
of bread and current inflationary pressures
driving them from restaurants to the premium baked
goods found in the perimeter of the store.
" Food is something consumers can still splurge on
in recessionary times, " explained Jennifer Lindsey,
vice president of global marketing, Corbion. " You will
see that more in the comfort categories, but people
have rediscovered carbs. "
Challenges accepted
Despite bakers investing to increase capacity and
keep up with demand, significant challenges have
evolved. Starting in 2021, industry indicators show
ingredient prices steadily rising for all bakery products.
Fuel and labor costs have snowballed as well.
And the consumer price index for bakery products
rises to pass off these costs to consumers.
In the Member Pulse Survey, bakery equipment
manufacturers have been asked each quarter to
rank their top challenges, and it's revealed the evolution
of major challenges throughout the past two
years. Uncertainty reigned early on with a weaker
domestic economy and global growth and COVID19-related
challenges ranking very high. However,
as those concerns have fallen away, BEMA members
are now more concerned with increased raw
material, transportation and logstics costs, as well
as attracting and retaining workforce. It's also interesting
to note that trade uncertainties jumped in
concern from 9% to 25% from Q4 2021 to Q1 2022,
most likely due to the war in Ukraine and its impact
on global commodity supplies and food prices.
" While the industry has been very concerned
about increased raw material costs and transportation
costs, we see the concern is growing in terms
of workforce, " Mr. Cook said.
Overall, BEMA Intel has provided a 30,000-ft
view of the industry's challenges and outlook in one
of the most unprecedented times in the baking industry's
history.
" Our industry is never straight-line growth, " Mr.
Ward explained. " We'll have periods of volatility,
and the value of this tool is keeping it updated so
that as we as individual companies experience challenges,
we can see if it accurately reflects what's
happening for other member businesses. "
*
INSIDE IBIE | 47
" WHILE THE
INDUSTRY HAS
BEEN VERY
CONCERNED
ABOUT INCREASED
RAW MATERIAL
COSTS AND
TRANSPORTATION
COSTS, WE SEE
THE CONCERN IS
GROWING IN TERMS
OF WORKFORCE. "
Tim Cook, Linxis Group
IBIE - 2022 Special Edition & Show Preview

Table of Contents for the Digital Edition of IBIE - 2022 Special Edition & Show Preview
