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Sector Spotlight: Bakery

Read on for an overview of the business opportunities in the booming bakery industry in the UK.

Sector Spotlight: Bakery

Bread is an important element of the food industry and the consumer now has a phenomenal variety of choice available.

So, what are the prospects for anyone wishing to trade in this environment and looking to buy a bakery business? Let’s start with some facts and figures. 

Bakery industry statistics 

  • According to an Ibis World report, the UK bakery industry currently generates revenues of £8.3bn per annum and grew at a rate of 2.2% per annum over the period 2014-2019.
  • In global terms, Statista figures indicate the United States bakery sector generates the highest revenues (US$70,057m in 2019). 
  • The UK bakery sector currently employs 74,879 people who work in a total of 2,563 businesses. 

Sector overview 

The bakery growth trend has fuelled a consumer industry which now produces bread, baguettes, rolls, doughnuts, cakes, bagels, muffins, and more. The public has become more discerning and accustomed to regular supplies of freshly baked products. 

Furthermore, health-conscious consumers are tending to reject standard store-bought products. They now look towards the health benefit and improved taste of natural ingredients prepared by a skilled hand.

New bread varieties are also arriving on the market via international restaurants and street stalls. In many cases, these bread products are associated with, or inspired by, the ‘dip’ food traditions common in Mexican, Spanish, and Indian cuisines. 

Alternative flavours are becoming popular, especially with millennials, and many bakery products now incorporate colourful vegetables. Bakers are also responding to health concerns by limiting the carbohydrate content of their wares, in some cases by as much as 30%.

Who could run a bakery business? 

The bakery sector offers a choice of scale and a variety of niche specialisms to suit different tastes and ambitions.

Formal training is obviously an advantage, as is some prior experience of working in the bakery trade. But, most of all, you must acquire a good knowledge of the bakery business and be passionate about your goods.

If you have great baking skills and a flair for introducing your own unique touches to personalise your

goods, you could develop a home baking business. As well as offering a good income for those who can produce an excellent, sought-after product, it also has the further advantage of relatively low start-up costs. 

At the other end of the scale, a larger operation employing staff, and perhaps also operating a café on the premises, would involve setup costs for equipment and a regular payroll. This will also require good management skills.

There are also niche opportunities to produce health-oriented products such as gluten-free foods and plant-based foodstuffs. 

Some bakers include, or specialise in, sweet-tasting cookies and pastries as well as indulgent products such as cakes and confectionery.

This also involves links with other businesses such as wedding organisers or catering companies. This would suit you if you're quick to spot new trends and ready to exploit gaps in an existing market. 

Buying a bakery business 

Opting to buy an existing bakery business for sale gives new entrants to the bakery sector a potentially huge advantage.

Often cheaper than purchasing a franchise, which limits an entrepreneur’s scope for expanding and developing the business, purchasing a ‘going concern’ also sidesteps the heavy investment of time and money required to build a start-up enterprise from scratch.

Provided you buy wisely and thoroughly research the background and potential of any existing enterprise which attracts your interest, this approach gives you immediate access to an existing base of customers and suppliers.

So, it’s the best way to begin earning revenue from day one. 

Some advice before buying 

  • Think very carefully about your business location because footfall is the lifeblood of bakery retailing. 
  • Research your market carefully, both to inform your business plan and to check that your premises can accommodate any expansion plans you may have. 
  • Don’t forget to develop your website and social media presence. This will help you to build your business through customer reviews and keep you in touch with market trends.

Kyle Cairns

About the author

Junior Film Producer at Dynamis and writes for all titles in the Dynamis stable including, and as well as other industry publications.

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