Flowers Foods and Grupo Bimbo dominate the U.S. bakery market
Flowers Foods and Grupo Bimbo dominated the U.S. bakery market in the 52 weeks ended January 1, 2023.
The current competitive landscape for breads and buns in the U.S. baking industry consists of Bimbo Bakeries USA (BBU), Flowers Foods and Campbell Soup Company, under the Pepperidge Farm brand, along with a number of smaller independent regional bakeries, local bakeries and retailer-owned bakeries.
According to Flowers Foods, the U.S. market for fresh and frozen bakery products is estimated at $47 billion at retail.
This category is intensely competitive and has continued to experience consolidation.
In the period under review, BBU had a 31% market share in the U.S. fresh bakery sector, followed by Flowers Foods (17%) and Campbell Soup (6%).
While private labels accounted for 19% coverage, other companies shared the remaining 27%.
A private label identifies products belonging to a distribution chain, which are marketed exclusively in its stores or those linked to the group.
Some smaller regional bakeries do not enjoy the competitive advantages of larger operations, including greater brand awareness and economies of scale in purchasing, distribution, production, IT, advertising and marketing.
However, Flowers Foods believes that size alone is not enough to guarantee success in the industry. The company faces significant competition from regional and independent bakeries in certain geographic areas.
In general, competition in the bakery sector continues to be driven by a number of factors, including the ability to serve retail and foodservice customers, generational changes in family-owned businesses, and promotional efforts by competitors in branded bread and store brands.
Competition is often based on the ability to address changing consumer preferences, product availability (including through e-commerce channels), product quality, brand loyalty, price and effective promotions.
Customer service, including frequent deliveries to keep store shelves well stocked, is also a competitive factor.
As of December 31, 2022 Flowers and its subsidiaries had approximately 9,200 employees located throughout the U.S. and approximately 4,100 long-term leased employees.
Approximately 930 employees are covered by collective bargaining agreements and there are no material outstanding labor disputes.