“Adopting robotics during bakery processing reduces waste and increases the quality of products by almost 20%. Automation enables proper handling of large bulk bakery production. Also, it allows a precise and consistent mixing of ingredients during processing. Companies such as Global Bakery Solutions (UK) and Erica Record (US) provide robotic equipment for panning and depinning bread and other bakery products. Technological upgrading enables the production of more complex baked goods, which are expected to increase demand for automated bakery equipment. Continuous improvements in baking lines are driving the bakery processing equipment market.”

Manuradha Rajput MarketsandMarkets Research Analyst, Food, Beverage, Animal Feed & Agriculture Globally, the consumption of bakery products is increasing, which is driven by the changing eating habits. Bakery product manufacturers are increasingly inclined to making investments in product innovations, new processing techniques, and opportunities exploration for the enhancement of productivity and the profitable experience. The bakery processing equipment market is highly impacted by the changes in the bakery industry to produce complex & innovative bakery products of different shapes and sizes, thereby trying to meet the increasing demand from the processed food industry and cater to changing consumer demands.

Development of new machinery and enhancement of the existing ones are the key strategies adopted by many players in the bakery processing equipment market. In addition to this, the growing focus on facility expansion, marketing schemes, and information exchange programs to create awareness and enhance the applications of bakery processing equipment contribute to the growth of the market. The bakery processing equipment industry experiences a few restraints regarding cost structure and fixed cost involvement in a high investments market. However, the rapid growth and increase in demand from the bakery industry encourage manufacturers to sustain market competition.

The new technology from robotics and extrusion of data analytics, along with innovative technological advancements, are some factors responsible for adding value to the North American and European bakery manufacturing equipment companies. In 2018, Europe and North America collectively accounted for a share of around 55% to 60% of the bakery processing equipment market.

INCREASE IN ADOPTION OF AUTOMATION AND ROBOTICS IN BAKERY PROCESSING Automation reduces labor costs and increases flexibility between different operations. The latest advancement in processing technology is robotic automation, which is being adopted by food manufacturers to improve efficiency, reduce costs, and improve throughput. Adopting robotics during bakery processing reduces waste and increases the quality of products by almost 20%. Automation enables proper handling of large bulk bakery production. Also, it allows a precise and consistent mixing of ingredients during processing. Companies such as Global Bakery Solutions (UK) and Erica Record (US) provide robotic equipment for panning and depinning bread and other bakery products. Technological upgrading enables the production of more complex baked goods, which are expected to increase demand for automated bakery equipment. Continuous improvements in baking lines are driving the bakery processing equipment market.

The oven sets and helps in maintaining the proper conditions of heat flux, humidity, and temperature to carry out the baking process and remove moisture from the products. A wide range of bakery ovens are manufactured, which are designed using advanced technologies and research to offer products with low fuel consumption, affordable prices, excellent volume, shine, texture, and crust in the market. Manufacturers are providing ovens in various shapes and sizes to meet the various requirements of customers around the world, according to the recent market and consumption trends. Ovens are manufactured with trolleys fitted inside them to increase bakery production with less energy consumption. The various types of ovens used in commercial baking companies include direct-fired oven, indirect-fired oven, electric oven, peel brick oven, rack oven, deck oven, reel oven, tunnel oven, and hybrid oven. Ovens & proofers witness high demand and are widely used in the Asia Pacific market, due to the growth in the bakery industry in the region.

The baking equipment companies are focusing on utilizing innovative and new technologies for proofing the bread and bakery products in the European region. These factors are projected to contribute to the growth of the bakery processing equipment market in the region. For instance, in July 2015, few groups of companies in Spain, the Netherlands, Germany, Belgium, France, and Italy launched UltraBAK technology, which was partly funded by the European Commission with nearly USD 2.4 billion. This technology helps in generating water droplets using ultrasound technology to proof bread, unlike the traditional steaming techniques. Further, a new technology, WP Intelligent Energy Control (IEC), was integrated into the bakery oven, which was launched by the WP Bakery Group (US) in 2014. This operation helps in controlling efficiency while baking and minimizes the energy wastage.

POTENTIAL FOR BAKERY PROCESSING EQUIPMENT MANUFACTURERS: DEMAND FOR FROZEN & PREMIUM BAKERY PRODUCTS • Bakery processing equipment manufacturers are focusing on launching innovative and technological bakery equipment in the oven & proofers baking type. For instance, in October 2018, Mecatherm SA launched M-TA tunnel oven, which consists of compact heating modules that work independently and can combine radiant heat and convection for optimal management of a large baking curve. This oven is mostly useful for bakery products such as sweet goods, bread & related products, and baked snacks.

• The booming demand for pastries, bagels, and donuts is majorly seen in emerging markets of the Asia Pacific region such as India and China. Consumers in North America, Europe, and Asia Pacific are demanding bakery products that are 100% natural, preservative-free, organic, non-GMO, and have reduced calories and sugar. The rise in this trend is a good source of motivation for bakery manufacturing companies.

• Consumers in the Asia Pacific region are demanding premium bakery products, especially in bread and pastries. This has proved to be a growing factor for the rise in bakery processing equipment solutions in the Asia Pacific region. For example, in Japan, Yamazaki Baking Company saw a great demand for premium bakery products, especially in bread and pastry varieties, by the consumers.

• The growing expansions and collaborations by bakery equipment brands to produce enhanced and technological equipment solutions are greatly influencing the bakery manufacturing companies to produce a wide variety of bakery products. For instance, in April 2018, Heat and Control (US) collaborated with Ishida Co., Ltd. (Japan) for providing its customers with full “end-to-end” processing and packaging solutions. Further, in February 2019, Bühler (Switzerland) acquired Haas (US), to expand in India by adding a baking oven manufacturing plant to its service and support facility in the country.

HIGH DEGREE OF INVESTMENTS BY EQUIPMENT MANUFACTURERS Various industry giants such as GEA Group AG, Bühler, and JBT offer a wide range of equipment, globally. Looking at the growing demand, manufacturers are increasingly inclined to make investments in the global market. Seen below are some of the recent expansions/investments made in the bakery processing equipment industry: During study period January 2014 and February 2019, industry players relied mainly on new product launches in order to achieve growth in the bakery processing equipment market. This strategy accounted for 30.4% of all growth strategies adopted by market players. The rise in demand for bakery processing and the high growth potential of emerging markets, along with an increase in demand for advanced technological and innovative bakery processing equipment, have encouraged the companies to adopt this strategy. GEA, Baker Perkins, and Markel Food Group were the leading market players that adopted this strategy in order to develop their business. Market players are also focusing on expansions & investments in expanding their capabilities in innovation and research centers. This strategy accounted for a share of 28.6% of the total number of growth strategies adopted by players in the bakery processing equipment market between 2014 and 2019.

INCREASE IN NUMBER OF ARTISAN BAKERIES AND QSR OUTLETS The retail food industry, including quick service restaurants (QSR), has witnessed significant growth over the past few years, globally. The growth in the Asian market can be attributed to Foreign Direct Investment (FDI), domestic conglomerates, and government investments. Owing to high competition, QSRs are focusing on improving customer experience. Installing automated bakery equipment helps them to improve their overall productivity. Moreover, the trend of online food ordering has led the foodservice players to adopt machines and systems that can provide them a quick baking experience. Of these, QSRs or fast food restaurants are dominating the foodservice segment in the bakery processing equipment market due to the high contribution of QSR chains such as McDonald’s, Starbucks, Subway, Burger King, Wendy’s, Taco Bell, Dunkin Donuts, Pizza Hut, KFC, and Domino’s. The foodservice industry uses frozen bakery food items on a regular basis to save time in cooking, which consequently reduces the time taken by the food items to reach the customers’ table.

Further, artisan bakeries are becoming popular due to the increasing demand for fresh bread and other bakery products. Artisan bakery products are fresh, softer, and tastier than regular bakery products, and this makes them unique in the bakery market. The increasing number of in-store bakeries, such as in supermarkets and hypermarkets, within big retail stores, is also driving the overall baking processing equipment market. These large food chains and artisan bakers form an important growing outlet for bakery products, owing to the latest trend of on-the-go consumption. Such factors are attributing to the growth of the bakery processing equipment market.

UNTAPPED POTENTIAL OF DEVELOPING REGIONS The key bakery processing equipment manufacturers have adopted expansion and investment strategies to gain a larger share of the market. To keep up with the emerging demand for bakery processing equipment, companies such as Bühler (Switzerland), Rheon Automatic Machinery. (Japan), and GEA Group AG (Germany) are expanding their facilities and adopting new & upgraded technologies.

The bakery processing equipment industry has a positive outlook due to high growth in the bakery products industry. Consumer preferences in emerging economies of Asia and South America have gradually transitioned from traditional homemade breakfast and snacking meals to ready-to-eat products, over the last couple of decades. Hence, companies are focusing on providing efficient systems to bakery producers. For instance, in August 2018, Baker Perkins (UK) launched Tweedy SuperCool mixer, which combines ingredients radically for enhancing bowl cooling with advanced control technology to provide precise management of dough temperature in any climate. Such developments create an immense opportunity for the bakery processing equipment market, globally.

CHALLENGES FACED BY THE BAKERY INDUSTRY Lack in infrastructure is one of the major challenges for the bakery processing market, mostly in emerging economies. According to a report published by the Federation of Indian Chambers of Commerce & Industry (FICCI), inadequate infrastructural facilities is one of the 15 factors hampering the growth of the food processing sector. Areas such as cold chain and transportation facilities require investment to improve the growth of the food processing industry in developing countries.

Manufacturers in the developed economies are searching for untapped markets and new consumer bases. This requires sufficient investment in many aspects of business expansion, especially when it comes to the establishment of new facilities in developing countries. Other than internal investments in manufacturing facilities, manufacturers need to spend heavily on the development of an efficient supply chain management and storage of raw materials & finished goods. Though low raw material prices and labor costs benefit bakery processing equipment product companies, the investment costs for infrastructural development pose a bigger challenge.

WHAT DOES THE FUTURE HOLD FOR THE INDUSTRY? Globalization of the premium and frozen bakery products industry is evident as the giant suppliers produce & distribute these products globally. The demand for premium products is on the rise, as consumers are moving toward high-end frozen bakery products such as French-styled baguettes and gourmet rolls. There is a rise in demand for different types of frozen bakery products, owing to their varying tastes and applicability in QSRs and food chains. The increasing popularity of frozen bakery products has also compelled manufacturers to boost production; it is expected to expand the number of opportunities for various types of bakery processing equipment. The bakery equipment market has huge potential in the export industry as well as from the demand witnessed from QSRs, which are the most important retail marketers of bakery products. They are growing faster in the developing and emerging markets than they did in the developed markets of the US, countries of Europe, and Japan. The emerging markets have proved and will continue to prove themselves as potential importing countries for bakery equipment from developed economies.