Baking & Snack - February 2022 - 31

2022 compared to 2021, so again, this is a great indicator
of industry health, " Ms. Hellmer said.
This has also been reflected last year in BEMA Intel's
quarterly Member Pulse Survey. In Q3 of 2021, 50% of
BEMA members reported increased quarterly bookings
compared to the previous quarter. In Q2, 66% of members
reported the same. Seventy-two percent of BEMA
members anticipate their company sales to increase during
the next 12 months. On both sides of the equation,
bakers and equipment companies are reporting high levels
of investment to meet the needs of high demand in
the midst of a challenging labor market.
How bakers plan to spend that money uncovers all the
challenges bakers have faced the past two years. Rather
than upgrading existing equipment or production lines,
bakers' priorities seem evenly split between maintaining
existing equipment and production lines and adding
new ones. In 2022, interest has grown in adding new
equipment and production lines.
" If we look at study trends just for adding new equipment
and lines, we saw that 27% of bakers reported that
commitment in 2020, " Ms. Hellmer said. " It rose to 35%
of bakers in 2021 and to 39% of bakers who project adding
new equipment and production lines in 2022. So we're
seeing a jump of 12 percentage points in just a few years. "
When it comes to specific spending on equipment,
bakers are overwhelmingly planning to invest in maintenance
and replacement parts. That's not new, as Ms.
Hellmer pointed out, but thinking in the context of the
current supply chain challenges, this data point takes on
new meaning.
" I don't think that commitment is higher than what
we have typically seen in past studies, but we know that's
a pain point for bakers and their supply chain partners
right now, getting those parts to the bakers, " she said.
After maintenance and replacement parts, 88% of bakers
reported plans to invest in systems improvements in
2022, another typically high priority. Worth noting, however,
is that 58% of bakers are planning to expand their
facilities either with new production lines or building
expansions in 2022, up from 47% in 2020. And nearly a
quarter of bakers indicated 2022 plans to invest in bricksand-mortar.
Whether that appetite remains when interest
rates and borrowing expenses rise remains to be seen.
" If these companies made it through the pandemic,
they are poised to continue to invest in their companies
and people even more to meet their customers' needs, and
I think that's what we're seeing here, " Ms. Hellmer said.
Investing around challenges
Where bakers are investing their capital makes sense
when the challenges they are facing are taken into consideration.
While the surge for baked goods may have
dropped some from unprecedented highs in Q2 of 2020,
demand has been sustained. IRI data for the commercial
baking aisle, reported in BEMA Intel's quarterly reports,
show bakery product unit sales are either holding
steady or growing. And certain sectors, like in-store bakery
sales, are recovering from pandemic-related drops.
While sales of baked goods in certain sectors are evening
out, other channels recover, leaving bakers still feeling
the crunch of needing to produce, produce, produce.
As one baker wrote in the qualitative section of the
Capital Spending survey: " The increase in retail consumers
over the course of the pandemic has changed
how people eat. More people are making food at home,
and it stayed that way even when the restaurant industry
opened back up. We are seeing increases in the retail
market holding strong at their current levels. "
The top three 2022 goals bakers cited for their capital
spending all support that need. Increasing capacity
was the top goal for capital spending, with 71% of bakBAKERS
ARE READY TO SPEND AT IBIE
8 in 10 BAKERS
ATTENDING IBIE PLAN
TO SHOP FOR EQUIPMENT
Investment at
IBIE
Bakers couldn't have picked a better year to have an appetite
for investment. The International Baking Industry Expo
(IBIE) will be held in Las Vegas, Sept. 17-22, and will be the
first international baking trade show since the coronavirus
(COVID-19) pandemic put a damper on in-person events.
With pent-up demand for automation and pent-up equipment
innovation, IBIE looks to be a significant event.
In the Baking & Snack 2021-22 Commercial Baking
Industry Capital Spending Study, conducted by Cypress
Research and sponsored by BEMA, eight in 10 bakers who
plan to attend IBIE reported that they will be shopping for
equipment at the show. And they offered ways equipment
suppliers can make their search process easier.
Bakers indicated they hope to be able to clearly understand
an exhibitor's core competencies and solutions,
whether that's through product catalogs or clear descriptions
of the company's expertise. They also cited equipment
demonstrations and videos as being helpful in
addition to spec sheets. Bakers also want uninterrupted
time with equipment suppliers through scheduled appointments
to discuss their equipment needs.
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