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Food: Donut, Bagel, Cookie Franchises
The U.S. bakery industry has about 2,600 commercial bakeries with combined annual revenue of $25 billion; and 7,000 small retail bakeries with $2 billion total revenue. Major businesses include Hostess Brands (formerly Interstate Bakeries) and Flowers Foods, plus divisions of companies such as Sara Lee and Nabisco.
The changing structure of the grocery industry and eating trends fuels demand. Profitability for individual businesses is determined by efficiency of operations. Large businesses have scale advantages in procurement, production and distribution. Small businesses can compete by offering specialty goods or superior local distribution service.
Baking is a low technology business that produces low-priced products from commodity ingredients. 50 percent of industry volume is from baked breads, mainly white, wheat and rye; 20 percent from rolls, buns, muffins, bagels and croissants; 11 percent from soft cakes; and the rest from pies, pastries, donuts and a variety of sweet goods.
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