Baking technology, as showcased every three years at the International Baking Industry Exposition (IBIE), changes over time in ways that reflect how the baking industry is evolving. In some instances, advances in automation help drive industry change.
While change in an ancient industry like baking tends to be incremental from one IBIE cycle to the next, there are numerous ways the environment in which baking companies operate is fundamentally different in 2022 than was the case in 2019. Of course, nothing has been a greater driver of change than the coronavirus (COVID-19) pandemic that emerged a few short months after IBIE 2019, with implications for the labor market, sanitation and for the product mix demanded in the marketplace.
Three very distinct changes over the past three years worth contemplating as IBIE 2022 approaches are the emergence of e-commerce as a major force in the food business, an unprecedented embrace of sustainability by the global business community and the addition of a new ingredient to the list of major allergens for the first time in a decade.
E-commerce takes center stage
E-commerce for the food industry emerged as a powerful trend at the start of the pandemic, and for the baking sector interest in the abruptly emerging channel has picked up steadily.
As early as July 2020, grain-based foods companies were devoting attention to the growth and potential of online business. At the time, Jeffrey L. Harmening, chief executive officer of General Mills, Inc., Minneapolis, noted that e-commerce sales accounted for about 9% of sales in the first few months of the pandemic. Speaking to the marketplace’s potential, Jonathan J. Nudi, president of North America Retail for General Mills, said the company’s online business was up 250% from a year earlier during the spring of 2020 and that 50% of US households purchased products online during the previous 12 months.
Bakers have demonstrated growing interest, too. Earlier this year, A. Ryals McMullian, president and CEO at Flowers Foods, Inc., Thomasville, Ga., said Flowers was determined to become “the category leader driving sales at traditional retailers’ websites, online retailers and last-mile delivery partners.”
During a panel discussion at the 2022 annual meeting of the American Bakers Association, Omar N. Haque, vice president, general manager and head of eCommerce Acelerada for Bimbo Bakeries USA, of Horsham, Pa., told bakers online baked foods sales are gaining momentum and that even now 20% to 30% of consumers do all of their grocery shopping online.
He warned that bakers will need to compete vigorously to stand out in the e-commerce marketplace.
“There is a misconception that the online shelf is endless,” he said. “Yes, you search in any category and Amazon, Instacart, Kroger, Walmart, you see thousands of results, that’s true. But the reality is the digital shelf is much smaller. Seldom do shoppers go beyond the first page, especially on a small screen, by results.”
While bread is one of the most heavily searched products for online food shoppers, the baking industry lags the broad food industry, said JP Frossard of Rabobank.
There is still lots of room for the baking industry to do e-commerce business, Mr. Frossard noted.
“Only one in three [online food] purchases have a baked good,” he said. “Baked goods have a 100% penetration in households, so why is it only in one in three orders? The consumers are eating these products, they’re just not buying them online, and we need to understand why.”
A few months before the 2019 IBIE, the United Nations in concert with 25 businesses launched its “business ambition for 1.5˚C,” a call to action looking for the business community to set verifiable science-based targets toward limiting global warming to 1.5˚C and to achieve a net-zero emission economy by 2050.
By December 2020, the 25 businesses had swelled to a group of 350 (the UN recently said more than 1,200 companies now have made zero-emissions pledges). That month, Nestle said it had become one of the first signatories to share a detailed plan for achieving net zero greenhouse gas emissions. The company debuted a pilot fleet electrification plan to test the use of electric trucks on a 20-mile short haul route in Ohio, and globally, Nestle said it expected to complete a transition of its 800 sites in the 187 countries where it operates by the end of 2025 to 100% renewable electricity.
A wide range of other food, beverage ingredient and foodservice companies as well as retailers have signed the pledge, including Clif Bar & Co.; Corteva Agriscience; Corbion NV; Groupe Danone; Domino’s Pizza, Inc.; General Mills, Inc.; Givaudan; Grupo Bimbo SAB de CV; Koninklijke Ahold Delhaize NV; Mars, Inc.; McCormick & Co.; Panera Bread Co.; PepsiCo, Inc.; Koninklijke NV; Target Corp.; The Hain Celestial Group; Unilever PLC; Univar Solutions Inc.; and Walmart Inc.
In addition to focusing on making their operations more sustainable, several companies have looked upstream to effect change.
At General Mills, Mary Jane Melendez, chief sustainability and social impact officer, earlier this year said 90% of the company’s total greenhouse gas emissions come from Scope 3 — not related to activities at assets owned by the company.
“As a result, we are accelerating the adoption of regenerative agriculture, which we expect will be the largest contributor to our greenhouse gas reduction goals,” she said.
The company has committed to advancing regenerative agriculture on 1 million acres by 2030, Ms. Melendez said. To date, the company is 20% of the way toward this goal.
Bimbo became the first major North American baking company to sign onto the pledge in the fall of 2021.
A new allergen
Bakers have grappled with the safe handling and appropriate labeling of food allergens since 2006, but a move by Congress in 2021 added a new wrinkle to requirement for many bakers.
On April 23, 2021, President Joe Biden signed into law the Food Allergy Safety, Treatment, Education and Research Act of 2021 (FASTER Act), adding sesame to the list of major food allergens for which labeling is required. The FASTER Act set Jan. 1, 2023, as the date by which food companies are required to declare the presence of sesame on food packaging labels.
The first food added to the list of major allergens in more than a decade, the ingredient is far less prevalent than the other eight allergens — dairy, wheat, eggs, peanuts, tree nuts, soy, fish and shellfish. US consumption of sesame each year has been estimated at about 40,000 tonnes. That compares to 6.8 billion tonnes of eggs (113 billion eggs), 101 million tonnes of milk and 1.14 million tonnes of peanuts.
Still, unlike, say, eggs or soy, sesame is a consumer-facing ingredient for bakers. At McDonald’s and other quick-service restaurants, a sesame topping on buns creates the initial visual impression for many consumers.
Certain bakers are responding to the FASTER Act passage by eliminating sesame completely from their baking operations. For example, Calise Bakery, Lincoln, RI, has reformulated its Scala bread, replacing sesame seed with flax seed. The product has been renamed Calise Bakery Golden Flax Seed Scala Bread. It was introduced at the start of 2022.
Baking companies that don’t have the option to drop sesame likely will take other steps to ensure compliance with the new law, including adjusting production schedules to allow for thorough cleaning after each sesame run. Interest in production equipment that is especially conducive to thorough cleaning may be expected to attract heightened interest at IBIE this year.