Bakery Contract Manufacturing Market Size, Share, and Trends 2024 to 2033

Bakery Contract Manufacturing Market Size and Growth

The global laser hair removal market size was USD 23.20 billion in 2023, calculated at USD 25.40 billion in 2024 and is expected to reach around USD 57.59 billion by 2033, expanding at a CAGR of 9.52% from 2024 to 2033. The growing demand for bakery products significantly increases the demand for the bakery contract manufacturing market.

Bakery Contract Manufacturing Market Key Takeaways

• Europe dominated the market with the largest revenue share of 34% in 2023.
• Asia Pacific is expected to grow at the highest CAGR of 10.31% in the market during the forecast period.
• By service, the manufacturing segment has held a major revenue share of 70% in 2023.
• By service, the custom formulation and R&D segment is expected to grow at a remarkable CAGR of 10.82% in the market during the forecast period.

Europe Bakery Contract Manufacturing Market Size, Growth 2024 to 2033

The Europe bakery contract manufacturing market was valued at USD 7.89 billion in 2023 and is expected to be worth around USD 19.87 billion by 2033, at a CAGR of 9.67% from 2024 to 2033.

Europe held the largest share of the bakery contract manufacturing market in 2023. A rising trend among consumers is the preference for specialty bakery goods, such as those that are low-sugar, organic, gluten-free, and non-GMO. The need for specialist contract manufacturing services is driven by the need for healthier and personalized baked goods.

The bakery contract manufacturing market in Europe is very competitive and focused on innovation. The contract manufacturers help firms launch cutting-edge baked goods into the market more swiftly by providing their experience in formulating and producing new products. The private label businesses are becoming more and more popular among European retailers. To create affordable and high-quality bakery items, these brands need contract manufacturing services.

Asia Pacific is expected to grow at the fastest rate in the bakery contract manufacturing market during the forecast period. The region's urbanization has resulted in hectic lives, which has raised demand for quick-to-eat bakery goods. The demand for effective contract manufacturing-based bakery production has arisen as a result of this change. Consumers in the area now have easier access to bakery items because of the growth of supermarkets, hypermarkets, and e-commerce platforms.

Increasing middle-class populations in Southeast Asian, Indian, and Chinese countries have led to higher discretionary incomes. The spending by this generation has increased on a range of food products, particularly premium and high-quality baked goods. Asia Pacific has seen a sharp increase in the acceptance of Western cuisine, which includes baked goods like bread, cakes, and pastries. The bread business has grown as a result of this tendency, which has increased demand for the bakery contract manufacturing market.

Market Overview

The bakery contract manufacturing is the practice of contracting out the manufacturing of bakery goods to other producers. The bakery contract manufacturers are these specialist manufacturers who manage the full production process, freeing up bakery brands to concentrate on other business-related activities like product development, marketing, and distribution.

The bakery contract manufacturing market is fragmented with multiple small-scale and large-scale players, such as Blackfriars Bakery, Perfection Foods, Michel’s Bakery, Inc., Tradition Fine Foods Ltd, Oakhouse Bakery, Cibus Nexus, Southern Bakeries LLC, Stephano Group Ltd., Hearthside Food Solutions LLC, Richmond Baking, Adventure Bakery LLC, Bake Works, Inc., De Banketgroep B.V., PacMoore Products, Inc., HACO Holding AG.

Bakery Contract Manufacturing Market Growth Factors

• The rising middle-class population can boost the demand for the bakery contract manufacturing market.
• The change in lifestyle can grow the bakery contract manufacturing market.

Bakery Contract Manufacturing Market Scope

Bakery Contract Manufacturing Market Dynamics

Driver

Rising demand for long shelves of bakery products

The rising demand for a long shelf of bakery products can boost the growth of the bakery contract manufacturing market. The market can benefit from the growing demand for long-shelf-life bakery products in a number of ways, including increased consumer convenience, increased market reach, improved supply chain efficiency, food security, leveraging technological advancements, cost savings, assuring health and safety, offering market differentiation, and supporting economic stability. Together, these elements propel market expansion and innovation.

Restraint

Higher long-term cost

The higher long-term cost may slow down the growth of the bakery contract manufacturing market. The higher long-term costs can impede the market's growth for contract manufacturing of bakery goods by raising production and operating costs, putting pressure on prices, restricting market accessibility, straining finances, complicating the supply chain, and necessitating ongoing investments in workforce training and compliance.

Opportunity

Technical advancement in bakery contract manufacturing

Technical advancements in bakery contract manufacturing may be an opportunity to boost the bakery contract manufacturing market. The time and personnel expenses associated with manufacturing processes can be decreased with the help of modern automated technologies. The results are higher manufacturing quantities and consistent product quality. The product quality and shelf life can be improved by innovations like fast cooling systems and precise bake ovens.

Maintaining the reputation of a brand depends on every batch of baked goods meeting the same exacting standards, which are ensured by sophisticated technology and precise control systems. Advanced sensors and monitoring systems have the ability to identify and address problems instantly, guaranteeing that the finished goods fulfill exacting standards for quality.

Service Insights

The manufacturing segment dominated the bakery contract manufacturing market in 2023. Large-scale bakery manufacturing is made possible by the advanced machinery and specialized knowledge of contract manufacturers. They can now efficiently and affordably make superior bakery goods thanks to this. The labor, raw material, and equipment maintenance expenses are decreased for bakery brands when manufacturing is outsourced to contract manufacturers. For small and medium-sized businesses (SMEs) that might lack the funding to invest in expansive manufacturing facilities, this is especially beneficial. The flexibility for bakery brands is provided by contract manufacturers, who may adjust production levels in response to demand. In the bread sector, demand might fluctuate depending on market trends or be seasonal. Therefore, this is quite important. Bakeries may concentrate on their key skills, such as product creation, marketing, and distribution, by outsourcing the production process.

The custom formulation segment is expected to grow at a significant CAGR in the bakery contract manufacturing market during the forecast period. The consumer demand for distinctive and customized baked goods that address particular preferences, dietary needs, and health issues is rising. By developing specialized goods, businesses are able to satisfy these needs thanks to custom formulas. The demand for bakery goods with particular health advantages, such as gluten-free, low-sugar, high-protein, and vegan alternatives, is being driven by growing knowledge about health and well-being. The production of these specific goods is made possible by custom formulation. The bakery businesses aim to set themselves apart in a crowded market by introducing novel items. By experimenting with different ingredients, tastes, and product forms, custom formulation enables firms to create distinctive products that stand out in the bakery contract manufacturing marketplace.

Bakery Contract Manufacturing Market Companies

• De Banketgroep B.V.
• PacMoore Products, Inc.
• HACO Holding AG
• Blackfriars Bakery
• Cibus Nexus
• Hearthside Food Solutions LLC
• Perfection Foods
• Oakhouse Bakery
• Richmond Baking
• Adventure Bakery LLC
• Michel’s Bakery, Inc.
• Southern Bakeries LLC
• Bake Works, Inc.
• Stephano Group Ltd.
• Tradition Fine Foods Ltd.

Recent Developments

• In May 2024, the large company located in Bentonville, Arkansas, announced the introduction of its "bettergoods" private label. Billed as its "largest private brand food launch in 20 years," the line has 300 items, most of which are under $5 and range in price from $2 to $15. Items include dairy, frozen foods, snacks, drinks, pasta, soups, coffee, chocolate, and more.
• In April 2024, the founders of ChipMonk Baking established the company to help snackers who struggle with these two problems. The firm helps T2 patients satisfy their cravings with a variety of tasty keto- and diabetic-friendly cookies, brownies, and other goodies. 
• In February 2024, in Malmo, Sweden, In Q4 of FY2023, Oatly Group AB repaid its debt by switching to an asset-light production strategy. A non-cash asset impairment charge of $172.6 million and associated expenses of $29 million resulting from the abandoned development of several industrial sites were incurred by the firm. 
• In July 2023, Gopal Food Product, whose factory is located in UPSIDC, Kotwan Industrial Area, Mathura, Uttar Pradesh, has signed an exclusive contract manufacturing arrangement with Annapurna Swadisht Limited, one of the top fast-moving consumer goods firms in eastern India. A month's worth of biscuits, 60 MT of Namkeen, and 150 MT of snacks may be produced at the new plant. 

Segment Covered in the Report

By Service

• Manufacturing
• Packaging
• Custom Formulation and R&D

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa