Industry research
Scope
US
Companies
63
Table of contents
What does the Industrial Bakeries market landscape look like in the US?
The US market for bakery products is relatively fragmented, with various large players with a nationwide presence competing against a large pool of sizable as well as more regional and local bakeries. However, the industrial bakery market is primed for consolidation, driven by the need for automation to increase scale and enhance cost efficiencies (L.E.K. Consulting, August 2023). This shift requires substantial investment in modernization and capacity expansion, with incumbents needing significant scale and a strong footprint to effectively serve large customers. This trend is further accelerated by European bakeries entering the US market through strategic M&A initiatives (FoodNavigator, August 2024).
What is the level of investor activity in the US Industrial Bakeries Industry?
Sponsor-led interest has been limited, with ~35% of identified assets being sponsor-backed (January 2025). Investors are primarily attracted by the increasing demand for innovative bakery products with favorable dietary characteristics, adoption of eating food away from home and buy-and-build opportunities to capture economies of scale and cost efficiencies. On the other hand, traditional bakeries being perceived as unhealthy, headwinds in US wheat production and food regulation challenges across various states serve as detractors for investors.
What are the key ESG considerations in the US Industrial Bakeries Industry?
ESG topics mostly revolve around environmental and social aspects. Herein, environmental challenges relate to the generation of food waste. Incumbents address this by introducing shelf-life extension measures and recycling residues into biofuel and animal feed. Next to that, identified players seek to reduce waste generation and use sustainable raw materials by adopting practices in production processes and collaborating with suppliers of sustainable and ethically sourced ingredients. The social agenda entails the unhealthy nature of bakery goods and safe labor practices. Incumbents improve consumer health through recipes without artificial ingredients and ensure employee well-being through frequent audits at production facilities.
The North American bread and bakery product market was worth ~$121.8bn in 2024 and is expected to reach ~$147.9bn by 2029 (+4.0% CAGR 2024-2029; Statista, December 2024)
According to Technavio (December 2024), the global bakery product market had an estimated value of ~$631.5bn in 2024 and is projected to grow to ~$902.4bn by 2029 (+7.4% CAGR 2024-2029)
US consumers’ increasing demand for more favorable dietary characteristics, which drives innovation in baking products. Consumer preference shift towards products with more energy and hydration, reduced and natural sweeteners and functional additives, enabling incumbents to position products as “better-for-you” with more margin upside potential (Baking Business, November 2024; ESM, June 2024; Food & Beverage Journal, April 2024)
Adoption of eating food away from home among US consumers as an increasing number of individuals opt for out-of-home food alternatives. This results in opportunities for providers to meet this increased demand by offering products that are difficult to replicate at home, focusing on convenience, taste and compelling product messaging (Perishable News, November 2024; Baking Business, November 2024)
Opportunities for buy-and-build in a fragmented landscape. The rising demand for automation and modern production lines, amplified by US labor shortages, leaves smaller players struggling to invest and achieve scale and cost efficiencies. As a result, these smaller players present takeover opportunities for larger consolidators (PE Hub, June 2024; FoodNavigator, August 2024; L.E.K. Consulting, August 2023)
The ongoing health consciousness trends among US consumers, with the perception of traditional bakery staples as unhealthy, combined with the shift toward low- and zero-carb lifestyles and growing awareness of ancient grains and sugar content, could constrain long-term demand for industrial bakery products (Farrelly Mitchell, April 2024; Food & Beverage Journal, April 2024; Medical Xpress, January 2024)
Rising raw materials costs driven by supply chain disruptions and complicating agricultural circumstances, such as drought in critical wheat production regions in the US, will likely affect industrial bakeries. Persistent unfavorable conditions could inflict supply shortages, resulting in inflated costs and capped profitability for incumbents (Agriculture Dive, September 2024; L.E.K. Consulting, August 2024; Reuters, February 2023)
Regulatory challenges for US industrial bakers require additional investments for compliance with no upside. To illustrate, tightening legislation on ingredients and additives, along with concerns over the need for state-specific formulations, poses challenges for identified players (Bakery & Snacks, August 2024)
With the full report, you’ll gain access to:
Detailed assessments of the market outlook
Insights from c-suite industry executives
A clear overview of all active investors in the industry
An in-depth look into 63 private companies, incl. financials, ownership details and more.
A view on all 150 deals in the industry
ESG assessments with highlighted ESG outperformers
