Consumers in the United States and around the world are choosing to follow healthier lifestyles. That means there is less of a demand for sugary foods, which would make it seem like the cake making industry could be in trouble. What customers want are organic, whole grain, gluten-free, and low-carb items that can help them to meet their fitness goals.
There is always a place for indulgence even with the most health-conscious consumer, so freshly-baked cakes and other goods. Continue to have a place in the economy.
Consumers in the United States use commercial bakers far more often than independent retail locations. Only 9% of industry revenues in the bakery sector comes from the retail market. The top three commercial producers generated over $25 billion in sales in 2015.
Important Cake Making Industry Statistics
#1. Decorated cakes make up the largest category in the U.S. industry, representing 26.3% of the market in 2017. Ice cream cakes captured a 5.7% share of category sales during the same time for the purpose of comparison. (Statista)
#2. The baking industry generates over $30 billion in revenues each year, which represents 2.1% of the GDP in the United States. (American Bakers Association)
#3. There are 6,000 retail bakeries and 3,000 commercial locations that produce goods for the cake making industry each year. 55% of total revenues from the latter come from just three producers: Campbell Soup Company, Flowers Foods, and Grupo Bimbo. (San Francisco Chronicle)
#4. The economic impact of baked goods that are produced and sold in the United States totals $423 billion, but profits are not necessarily high because of the rising costs of sugar, wheat, and vegetable oil that can swing by as much as 40% in a single year. (American Bakers Association)
#5. 65% of all of the bakeries operating in the United States employ fewer than 10 people. 44% have between 1-4 workers, and most small operators have one facility from where they produce goods. (San Francisco Chronicle)
#6. Cakes represent 23% of the overall bakery market in the United States. That places the industry second behind bread (32%) for total market share. Rolls represent 19% of the industry, while pies are just 2% of it. (San Francisco Chronicle)
#7. The baking industry in the United States employs about 800,000 people each year, which generates over $44 billion in direct wages that can impact the economy in positive ways. (San Francisco Chronicle)
#8. Frozen cake and pastry manufacturing in the United States is a $7 billion segment for this industry despite the fact that there are only 235 firms currently active in this space. (IBIS World)
#9. The annual rate of growth for the frozen products sector in the cake making industry is 1.4% even though changing consumer preferences are taking them away from frozen cheesecakes and pies. (IBIS World)
#10. Small cakes took over the largest share of the UK market for the industry in 2012 with 139 million kilograms sold in 2012, representing 44% of total sales. (Mintel)
#11. 24% of consumers say that they would like to see more cake sold in individual portions so that there is less waste for them to manage. (Mintel)
#12. 51% of consumers say that they’ve eaten at least one pre-packaged cake that was baked in a local store, with 47% noting that they have consumed at least one individual cake in the past year. (Mintel)
#13. 20% of adults say that they prefer to make cakes at home instead of purchasing them at the store, an experience driven by the economic downturns in recent years. 75% of home bakers say that they enjoy the work of making a cake, with 41% saying that they also want to learn how to improve their skills in this area. (Mintel)
#14. There are more than 11,000 bakery cafés operating in the United States. Many of them bolster their revenues by providing coffee and high-quality menu items. (IBIS World)
#15. Bakery cafés generate about $11 billion in revenue each year for the cake making industry, showing growth of 2.9% annually between 2014-2019. (IBIS World)
#16. Families with five or more people in the household spend 32% more on baked goods in the United States compared to the average American buyer. The presence of children between the ages of 6-17 is a significant indicator of above-average spending for the industry. (American Bakers Association)
#17. Fresh bakery cakes drove the majority of growth experienced by the baked goods industry in 2018, providing a $61 million boost while the generic pies and cakes category saw a $3 million decline in sales. (Information Resources Inc.)
#18. 40% of consumers say that their food and beverage purchases are the most critical to how they take care of their overall health. (Information Resources Inc.)
#19. 28% of consumers have dietary restrictions or plans that influence their purchasing behavior, including low sodium needs. (Information Resources Inc.)
#20. Cakes and other baked goods that contain ingredients from the “ancient grains” category saw a 24% spike in total sales in 2018. (Information Resources Inc.)
#21. 19% of consumers say that they shopped for their fresh baked goods at a standalone bakery in their community. (Information Resources Inc.)
#22. Dollar store brands, including Family Dollar, Dollar Tree, and Dollar General, have added over 1,500 locations that have added fresh of pre-packaged baked goods like cakes to their inventory. (Information Resources Inc.)
#23. One in three consumers today say that they want fresh foods as part of their grocery store pickup, but that figure rises to 44% when only Millennials are included in the data. (American Bakers Association)
#24. 36% of consumers also say that they would purchase fresh foods online if a fast delivery option was offered to them. That figure increases to 45% when only Millennials are surveyed. (American Bakers Association)
#25. 65% of consumers say that an in-store fresh bakery influences their decisions on where they choose to shop. Only 49% of customers said that a desired selection of packaged baked goods would influence them in the same way. (American Bakers Association)
#26. 60% of consumers say that they’re not looking for specific brands when they shop for cakes or other fresh bakery items. (American Bakers Association)
#27. The average store transaction is 2.5 times higher when there are baked goods, like a cake, in the consumer’s shopping basket. (American Bakers Association)
#28. Baked goods see a disproportionate amount of sales during March and April when revenues are 10% higher in the United States. Holidays tend to cause a surge of sales for the cake making industry, with Mother’s Day, Memorial Day, and July 4th being significant influences on unit and dollar sales. (Information Resources Inc.)
#29. Club Channel commands an 8% market share of the in-store bakery cake sales. (Information Resources Inc.)
#30. Themes and limited-time offers for the cake making industry can generate consumer excitement, leading to a 9.5% increase in sales and up to a two-point difference in overall market share. (Information Resources Inc.)
#31. 48% of the customers who regularly shop with the cake making industry still use store circulars, magazines, and newspapers to plan their spending habits even though these traditional messaging efforts are slowing losing their effectiveness. (Information Resources Inc.)
#32. 51% of consumers go online to see if there are sales or coupons available for the cakes that they want to purchase. (Information Resources Inc.)
#33. 34% of consumers compare prices when shopping for cakes, with 17% using a mobile device to ensure that they can save the most money. (Information Resources Inc.)
#34. 60% of customers say that they receive the most information about their purchases from in-store displays, packaging, or signs. Only 39% say that they turn to their friends and family for this need. (Information Resources Inc.)
#35. 81% of consumers say that they are comfortable with an exchange of private information for relevant personalized offers. (Information Resources Inc.)
Cake Making Industry Trends and Analysis
The market for baked goods in the United States is expected to struggle over the next 10-year forecast period, with a 1% CAGR average expected each year through 2029. This figure is tied to a lower population growth estimate, changes to the amount of disposable income that people have, and fluctuations in economic conditions.
There will still be a place for the cake making industry, but the early adopters to the changing influences that generate consumer interest will see the most success. Look for more businesses to challenge commercial bakers by providing gluten-free items and other diet specialties to carve out a niche for themselves. Reformulating recipes with existing cakes so that there are new flavor combinations or single-serving options will continue to be a priority for the industry.
The thin margins will always be a problem for the industry. Bakeries can’t always pass along increased costs to consumers with higher pricing, so cost-saving activities will be the key that unlocks future growth.
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