With inflation in bakery above the consumer price index (CPI) since 2022 and only exacerbated by the war in Ukraine, the impact on the final demand should remain minimal in the US market, despite volume contractions, according to an analysis made by Rabobank. The pandemic boosted the demand and led to operational improvements.

“We can say we enter 2024 in a better shape as an industry. Wheat and energy prices have eased, and consumers have taken higher pricing, which has supported COGS and restored margins. But equally important is that the industry has learned its lessons. The last comparable inflation event took place over 40 years ago, which means a whole new generation had to face successive price renegotiations and uncertainties for the first time in their lives and careers.

Throughout the many conversations we had with bakers and at conferences we attended this year, it became noticeable that there was a consistent easing of supply chain issues – namely, the availability of packaging, ingredients, and truck drivers – that used to be the main talking point at bakery forums in the past two years. After a turbulent 2020-2023 period, we now see bakeries talking about the future and planning ahead,” the report highlights.

Rabobank estimes that restoring volumes while keeping current pricing and margins is high on the industry’s 2024 to-do list.

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