Milling & Baking News - May 5, 2020 - 14

Business

Wholesale bakers detail supplier
needs amid COVID-19 crisis
KANSAS CITY - When the coronavirus (COVID-19) hit the United States,
it changed the game for commercial
baking almost instantly, from supply chain disruption and operational
shifts to concerns over worker health
and safety.
National guidelines aimed at slowing the COVID-19 spread were announced on March 16, sparking foodservice shutdowns and panic buying
that emptied supermarket shelves
across the country.
Anticipating the massive shift that
was about to take place, Baking & Snack,
a sister publication of Milling & Baking
News, commissioned Cypress Research
to survey national and regional wholesale bakers to gauge their industry outlook and understand the current and
potential disruption.
The survey reflects participation
from Baking & Snack readership, including 162 executives representing
small, mid-size regional and national
commercial bakeries that service regional and national accounts. Survey
participants self-reported their company size, and small companies may
not service at regional levels.
Industry confidence impact
Because the survey was conducted
in the early stages of the outbreak, Cypress was able to gauge the immediate
and specific impact the virus - and the
measures taken to contain its spread -
had on bakers' industry outlook.
Overall, commercial bakers' general
attitude remained positive in the outbreak's early stages, with 45% of all
respondents indicating a positive outlook through 2020, while just 20% had
a negative one. Overall, 35% of bakers said they were unsure what 2020
would look like.
Marjorie Hellmer, president of Cypress, noted a correlation between
general outlook and bakery size, with
56% of large national wholesale bakeries indicating an initial positive industry outlook in the survey.
"Significantly more mid-size regional manufacturers reported uncertainty
than their counterparts," Ms. Hellmer
said. Forty-five percent of this sample
indicated "unsure" in the survey.
Longer-term predictions for small
wholesale bakery manufacturers revealed more than half (54%) foresee
a decrease in production. For large
national bakeries, there's a relatively
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Milling & Baking News

of staff for operations, with 40% of
bakery executives saying they are "extremely" concerned.
"When we zero in on the acute concerns, you can see that at least 20% of
baking executives rated their highest
concern levels for long equipment
lead times, planned startups and also
worker safety practices," Ms. Hellmer
said. "These are great concerns during
the pandemic."

even split between those that expect
increased production and the ones unsure what to anticipate, 45% and 40%,
respectively.
"The smaller companies are contributing a disproportionate amount of
concern for loss in production while the
national manufacturers have a more uncertain outlook about the long-term impact of COVID-19," Ms. Hellmer said.
This outlook could be attributed to

Maintaining constant communication
During this critical time, communication is more important than ever, and

US baking industry confidence

What is your general outlook for the US commercial baking industry through 2020?
Negative

Positive
Aggregate

45%

Small wholesale

36%

Mid-size regional wholesale

38%

Large national wholesale

Unsure/don't know

20%
36%
17%

56%

35%
28%
45%

12%

32%

Baking industry confidence is linked to company size: More than half of national manufacturers report a positive
industry outlook compared to just over a third of small manufacturers. Significantly more mid-size, regional
manufacturers report uncertainty than their counterparts.
Source: Cypress Research

the fact that many smaller bakeries
serve those foodservice outlets that have
been forced to either limit their business
to curbside-only or have shut down.
Supply chain disruption
At the time of the survey, overall operating capacity was holding steady in
the manufacturing plants. Since then,
however, some large manufacturers
have announced temporary shutdowns at facilities where workers
have tested positive for COVID-19,
which may have shifted production to
other plants and increased capacity at
those locations.
Almost half of the bakers also reported that, in the early stages of the
crisis, they experienced almost no supply chain disruption with ingredients,
equipment or packaging, but they do
expect that to change in the coming
months.
Currently social distancing measures and other steps to protect workers' health have halted some equipment installations and prevented service technicians from entering plants.
According to the survey, the main
business concern remains the availability

bakers are taking a proactive approach.
To ensure supply chain continuity, midsize and large national bakeries also are
enlisting backup supply options.
Bakers are taking the same approach
with their own customers. Nearly all
survey participants (96%) noted that
they are communicating with their
customers on finished product continuity and their company's food safety
practices. And 93% said they are communicating about their worker safety
measures, while 86% are sharing info
on supply continuity.
"This, of course, makes communication key during the virus outbreak,
regardless of a bakery's size," Ms.
Hellmer advised.
The way bakers are communicating,
especially with suppliers, also has seen
a shift. While, not surprisingly, 100%
of respondents indicated email as the
preferred form of communication with
suppliers, 57% said they also are relying
on good old-fashioned telephone calls.
That said, video conferencing tools
such as FaceTime and Zoom are seeing
an uptick as 17% of survey participants
indicated it as a preferred method.
About a quarter of small and
bakingbusiness.com / world-grain.com

5/1/2020 9:45:20 AM

Shawnee18

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - May 5, 2020

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