According to the most recent State of the Retail Baking Industry Report conducted by Cypress Research for Sosland Publishing, 18% of retail bakeries are addressing the industry skills shortage by increasing automation. For many, the push for improved technology is leading to a greater reliance on online ordering and website marketing. Many retailers including fresh bakeries are using technology and packaging innovations to improve their customer service.

Wholesale bakeries are answering this call for higher quality options. In Kansas City, Kansas, Farm to Market Bread Co. blossomed over three decades into a brand that is widely known and loved by consumers throughout the region.

The company has a rich history. While working at a commercial bakery in the '80s, Farm to Market’s founders Mark Friend and Fred Spompinato developed a shared love of bread. Friend became enamored with the sourdough fermentation process, while Spompinato was partial to a grainy wheat loaf. They recognized a need in Kansas City for fresh bread baked from quality ingredients. In 1993, Farm to Market Bread Co. was born from that idea.

Friend passed away a year ago, and his son, John, now runs the business. They deliver fresh daily to neighboring Kansas cities including Olathe, Topeka, and Lawrence, as well as seasonal breads such as panettone and stolen to the Rocky Mountains region. Frozen bread distribution goes farther – to Wichita, Kansas; Little Rock, Arkansas.; and Omaha, Nebraska. They recently started a sourdough program with Costco that is going very well, he says.

“Our frozen distribution side is expanding. That is our biggest growth area now,” said John Friend, president of the company. “If you do it right, frozen makes a lot of sense.”

Farm to Market is equally excited about their conversion to using Farmer Direct flour.

“We are thrilled to partner with Farmer Direct Foods. We share the same values of supporting local farmers and sourcing sustainable, traceable ingredients,” he said. “This partnership will allow us to continue producing the high-quality bread that our customers love, while also strengthening our commitment to the local food community.”

Friend further explains the importance of controlled growth and the need for Farm to Market to sustain their high-quality profile. “Every piece of bread is touched by human hands at some point. We want to grow, but we won’t compromise our quality for anything.”

“Our frozen distribution side is expanding. That is our biggest growth area now.”

John Friend, president of Farm to Market Bread Co.

Expansion trail

H&H Bagels, an iconic New York City brand since 1972, is entering a new era of expansion in 2023, with agreements in place for 25 new restaurants across the country.  Currently operating five locations in New York City, H&H Bagels is now expanding outside of the tri-state area for the first time, opening new company-owned and franchised locations in Florida, California, Washington, D.C., Virginia, Illinois, and Connecticut.  A company-owned location will also open at the newly remodeled Penn Station in New York City later this year.

With its national franchise program, H&H Bagels empowers entrepreneurs to open a turnkey business operation with strong consumer demand.  The beloved brand has built a robust following over the last five decades, known for its legendary bagels and high-quality premium offerings.  In recent years, due to the immense growth in its nationwide shipping and global wholesale business, H&H Bagels has established an even larger following around the world.

“We’re excited to bring our legendary New York City bagels to cities across the country as part of our expansion plan,” said Jay Rushin, chief executive officer of H&H Bagels. “With each new company-owned and franchise location, we are looking forward to welcoming new customers to the H&H family, while working with like-minded entrepreneurs who are eager to bring an iconic brand and an authentic New York City bagel to cities all across the country.”

H&H Bagels under development:

  • Los Angeles, California (5-unit franchise development agreement)
  • Tampa, Florida (5-unit franchise development agreement)
  • Washington, D.C., Northern Virginia, Norfolk/Virginia Beach, Virginia (10-unit franchise development agreement)
  • Boca Raton, Florida (franchise)
  • West Palm Beach, Florida (company-owned)
  • Stamford, Connecticut (franchise)
  • Chicago, Illinois (company-owned)
  • Penn Station, New York, New York (company-owned)

The first H&H Bagel franchise location will be in Boca Raton, Florida which is expected to open in the third quarter of 2023. In addition, the first company-owned locations outside of New York City will be in West Palm Beach, Florida at NORA, the redevelopment of West Palm Beach’s warehouse district and in Chicago, Illinois in Fulton Market. H&H Bagels’ sixth New York City location is expected to open in the fourth quarter of 2023 in the newly renovated Penn Station.  

Portland favorite

Wildly successful as a gourmet donut shop, Blue Star has seven locations across the West Coast. The pandemic induced a pivot in the business plan to focus on wholesale to grocery that has led to their products being carried at more than 20 retail outlets with more in the works. Blue Star has demonstrated its ability to adapt to e-Commerce as retail rapidly evolves.

Blue Star Donuts + Coffee is a majority women owned and operated and operates locations across Oregon and Southern California. They also are carried in 20-plus grocery retail stores across the Portland-Metro area.

The pandemic induced a pivot in the business plan to focus on wholesale to grocery that has led to their products being carried at more than 20 retail outlets so far. Blue Star has demonstrated its ability to adapt to e-Commerce as retail rapidly evolves. Executive pastry chef Stephanie Thornton invents each flavor with an adventurous spirit and quality collaborations that celebrate the creativity and diversity in local communities.

Like many small businesses, Blue Star was not immune to COVID-19 and the subsequent economic impact. Forced to close temporarily during nationwide shutdowns, Blue Star filed for bankruptcy protection in September 2020 with Sortis on board guiding the company through and out of bankruptcy proceedings. A hearing held November 23, 2020, in Portland, Oregon approved the plan that brings Blue Star, a cherished Portland gourmet donut brand, back from a COVID-19 induced crisis. In addition to the investment, restructure terms prioritized retaining leadership and core stakeholders, and working with the Blue Star team to provide support and resources where needed.

“I appreciate the trust and faith that Paul and Sortis have in me and my vision for Blue Star,” said Blue Star chief executive officer Katie Poppe. “They listened to what was important to me, and put their money where their mouth is, so to speak. Maintaining women-majority ownership and folding in some of our key staff stakeholders was essential to me, and I’m thrilled to finally be able to expand the ownership structure as we rebuild the company.”

Blue Star Donuts + Coffee has been a Portland favorite since 2012, making their donuts from scratch with locally sourced ingredients and collaborating with creatives across the West to come up with the best local creations. Blue Star will now move forward with navigating the unending challenges facing the restaurant industry.

There are six locations in Portland, Oregon, including the Portland International Airport, and one location in Venice, California. Blue Star is wholesale donut supplier to retailers including Market of Choice, Alpenrose, New Seasons Market, Green Zebra, Smith Brothers Farms, and Legacy Health.

Key investments

A National Restaurant Association report reveals that many operators want to keep moving toward the edge, with more than 4 in 10 planning investments in equipment or technology to increase front- and back-of-the-house productivity. These investments are anticipated mostly in the order and payment space, rather than automated systems or robots that prepare and serve food.

Off-premises-only locations are expected to grow in popularity; more than 4 in 10 limited-service operators think they will be more common this year. 69% of adults say they like the option to dine outside.

Ashley Robertson, director, global marketing, Corbion, Lenexa, KS, agrees that changes are happening that lead to innovative ways that fresh bakery products are packaged and displayed at the instore bakery.

“This change presents more than just a shift in packaging and display methods. It opens a pathway for increased ingredient transparency, a concern growing in importance among today's consumers,” she says.

Enhancements in packaging design are expected to interweave aesthetics with functionality. Clear packaging could become prevalent, highlighting both product freshness and ingredient quality. Additionally, the increased demand for sustainability may fuel a shift toward recyclable packaging materials.

In terms of displays, appealing arrangements of individual packages will become vital in attracting customers. However, the most notable change lies in ingredient transparency. The use of prepackaged goods provides a platform for detailed labeling, making it easier to share ingredient lists, nutritional information, and allergen warnings. This increased transparency, a major draw for today's health-conscious consumers, allows bakeries to demonstrate their commitment to quality and customer health.

“This growing preference for prepackaged goods thus signifies a multifaceted evolution for instore bakeries, centering on design, presentation, and most importantly, ingredient transparency,” Robertson says.

High standards are evident everywhere. Farm to Market relies on Bundy pans, which feature a new pan coating that prevents any erosion. A Burford bagging machine is perfect for bagging sliced loaves of Farm to Market breads, which are always hand loaded into Revent rack ovens and their four-deck Bongard deck oven.

“Our biggest growth is in sliced breads,” Friend said. Addressing the challenge that high-hydration doughs often lose their form as they move through the lines, Friend explains that their doughs cannot be too wet to serve the higher purpose of great flavor and consistent quality.

“There is definitely a balance,” he said. “Mom wants to make a PB&J without the jelly falling out of the middle.”

Specific ingredient traits

At Ardent Mills, clean label links directly to whole grains, which, it should be noted, ranks as the No. 1 trait that consumers seek out when paying attention to specific traits in fresh bakery products, according to Rick Stein, vice president of fresh foods for the Food Marketing Institute, who presented findings from their Power of Bakery Report during IDDBA.

“You’ve got to be speaking about health and wellbeing in the bakery,” he said.

Matt Schueller, director of marketing insights and analytics at Ardent Mills, agrees that consumers in study after study say they want to eat whole grains, “and yet there’s still work to be done.”

“This may be the environment now that offers renewed opportunities to promote good taste and health benefits,” he said. “Decisions are being made around food choices for myself and for the planet.”

Ardent Mills offers products including whole wheat UltraGrain, which offers the same nutritional profile as whole grain but with a “more appealing taste profile.”

Increased efficiency

Automation can bring several benefits to smaller wholesale/retail bakery operations, according to Sonia Bal, director of global marketing, Unifiller Systems.

Increased efficiency: Automation can streamline various processes in a bakery, such as ingredient handling, mixing, portioning, and depositing. By automating these tasks, bakeries can achieve higher production rates, reduce labor requirements, and optimize their overall operational efficiency.

Consistent product quality: Automated equipment can help ensure consistent product quality by precisely measuring and controlling ingredients, mixing processes, and depositing techniques. This reduces the chances of human error and ensures that each baked item meets the desired standards.

Cost savings: Although implementing automated equipment involves upfront investment, it can lead to long-term cost savings. Automation can reduce labor costs, minimize ingredient waste through accurate portioning, and enhance production throughput, allowing bakeries to produce more in less time.

Enhanced food safety and hygiene: Automated systems can help maintain high levels of food safety and hygiene. They can minimize human contact with the product, reducing the risk of contamination. Additionally, automated equipment is often designed for easier cleaning and sanitization, ensuring compliance with food safety regulations.

Improved product variety and customization: With versatile equipment, bakeries can easily switch between different products, flavors, and sizes, catering to diverse customer preferences and demands.

Skilled labor utilization: By automating repetitive and labor-intensive tasks, bakeries can allocate their skilled workforce to more specialized tasks that require creativity, precision, and product development. This allows employees to focus on innovation and improving the overall quality of baked goods.

“Manufacturers are incorporating sophisticated control systems into depositors, utilizing sensors, cameras, and software algorithms to enhance accuracy. These systems provide real-time feedback, enabling precise depositing of delicate inclusions,” Bal explains. “One such advancement from Unifiller is our Total Care App. Total Care empowers frontline operators to trouble shoot problems, train & share knowledge, while reducing downtime and optimizing performance.”

Specialized depositor heads or nozzles, large passages and openings (SV valve), adjustable depositing speeds are innovative mechanisms to prevent damage or distortion of inclusions. 

Integrated Vision Systems are being integrated into depositing technology to ensure accurate placement of delicate inclusions. These systems can detect variations in product shape, size, or position, enabling adjustments in real-time for optimal accuracy, Bal shares.

Destination market

In a key emerging trend, retail bakeries are joining forces with other food retailers in food plazas that appeal to larger groups of consumers.

The highly anticipated Citizens Market Atlanta at Phipps Plaza in Atlanta’s Buckhead neighborhood is now open to the public. The 25,000-square-foot immersive destination includes a culinary market with eight distinct chef-driven brands, a full indoor and outdoor bar and event space.

Citizens Market Atlanta at Phipps Plaza is the culinary addition of the Phipps Plaza redevelopment. The culinary market sits adjacent to The Green, the newly designed, grand courtyard with comfortable seating, well-manicured green space, and a large-scale, hand-painted mural Simon commissioned from Savannah College of Art and Design (SCAD). The reimagined Phipps Plaza is an unrivaled mixed-use development that redefines the way Buckhead lives, works, plays, and shops. This iconic shopping and dining destination is headlined by the Nobu Hotel and Restaurant Atlanta, Life Time and Life Time Work, a luxury athletic country club and coworking destination, and One Phipps Plaza, a LEED certified, 13-story, Class A office tower.

Citizens Market Atlanta at Phipps Plaza, operated by global premium experiences company Legends, features eight fast-casual culinary brands created by C3 (Creating Culinary Communities), the fastest-growing global food tech platform.