IBIE - 2022 Special Edition & Show Preview - 43

CAPITAL SPENDING STUDY
Bakers are ready to invest
How do your company's capital investments
compare to the previous year?
2022 compared to 2021 (projected)
14% 30%
57%
DECREASE * STAY THE SAME * INCREASE
more in their companies and people to meet their
customers' needs, and I think that's what we're
seeing here, " Ms. Hellmer said.
The top three 2022 goals bakers cited for their
capital spending all support that need. Increasing
capacity was the top goal for capital spending, with
71% of bakers focused on that. Sixty-four percent
want to improve process capability and/or flexibility,
and 62% want to increase production speed.
" We know increased capacity for existing products
has been a challenge for bakers during this
ongoing pandemic with facilities operating at
nearly full or full capacity to meet their customers'
needs with incredible pressures on them, " Ms.
Hellmer said.
It should also be pointed out that all this
increased capacity is for existing products.
Increasing capacity for new products was at the
bottom of the list of goals with only 53% of bakers
reporting that as a driver for 2022 capital spending
plans. This is a significant shift in the industry.
Following the top three 2022 investment goals
are other priorities that can't be ignored. Bakers
want to improve product quality, consistency and
accuracy (61%); improve food safety/sanitation
(60%); decrease labor costs (59%) and invest in
accommodations for a lack of skilled labor (56%).
The fact that these goals are nearly equal in importance
reflects the growing pains the baking
Bakeries set aside
more revenue
for capital spending
What percent of your company's annual
revenue is designated for capital spending
projects in 2021 and 2022?
2021 (ACTUAL)
8.5%
2022 (PROJECTED)
11.3%
industry feels in so many different directions as it
tries to absorb business expansion along with the
contraction of the supply chain and labor market.
" The need to improve process capability, increase
production and improve product quality
are typically main drivers of investment, but we've
seen so many workforce shortages related to
pandemic disruptions, whether that's staff getting
sick or people leaving their jobs in record numbers
across manufacturing industries, " Ms. Hellmer
pointed out. " That's also putting downward pressure
on the baking industry, so we're seeing companies
needing to make these capital improvements,
and often they're automating in specific
areas to make these improvements. "
That was supported in the qualitative portion of
the Capital Spending Survey where bakers were able
to write in trends most affecting their company's
planned capital investments. The top three investment
drivers from these narrative responses were
related to labor shortages/automation, increased
demand/new opportunities, and increased capacity
and efficiency. Other themes mentioned in the qualitative
responses were challenges related to the supply
chain, raw material costs and longer lead times
on equipment and parts.
While conversations around labor do include
best practices and new ways to find and retain
workers, the overwhelming answer to the labor
shortage appears to be investing in technology.
As one baker pointed out: " Automation is very
important as skilled labor and, in fact, any labor is
difficult to find and retain. "
With bakers experiencing headwinds that are
largely out of their control, their capital spending is
being used to find efficiencies and control what they
can. Bakers are turning to automation to increase
capacity and efficiencies in the hopes of reaching
the blue skies on the horizon. And they'll be looking
to take action on those investments at IBIE.
*
Pandemic influence
on investment
How has the pandemic
impacted your company's 2022
capital investment plans?
PLAN TO SPEND MORE
36%
NO IMPACT 35%
PLAN TO SPEND LESS 14%
UNSURE/DON'T KNOW 14%
35
INSIDE IBIE | 43
36
14
14
" IF THESE
COMPANIES MADE
IT THROUGH THE
PANDEMIC, THEY
ARE POISED TO
CONTINUE TO
INVEST EVEN
MORE IN THEIR
COMPANIES
AND PEOPLE
TO MEET THEIR
CUSTOMERS'
NEEDS. "
Marjorie Hellmer,
Cypress Research
Cypress Research
IBIE - 2022 Special Edition & Show Preview

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