Bakery Contract Manufacturing Market Report 2025

The bakery contract manufacturing market size has grown rapidly in recent years. It will grow from $24.93 billion in 2024 to $27.79 billion in 2025 at a compound annual growth rate (CAGR) of 11.5%. The growth in the historic period can be attributed to consumer demand for diverse products, cost efficiency, and scalability, focus on core competencies, globalization of supply chains, rising disposable income, and popularity of convenience foods.

The bakery contract manufacturing market size is expected to see rapid growth in the next few years. It will grow to $40.93 billion in 2029 at a compound annual growth rate (CAGR) of 10.2%. The growth in the forecast period can be attributed to the expanding middle class, e-commerce growth, rising health and wellness concerns, regulatory compliance and quality assurance, aging population. Major trends in the forecast period include customization and innovation, clean label and health focus, technology integration, supply chain resilience, and global expansion.

The increasing consumption of bakery products is anticipated to drive the growth of the bakery contract manufacturing market in the future. Bakery products encompass a wide variety of items made using wheat flour to create different baked goods. Many bakeries are unable to operate at full capacity to meet the rising demand for these products, often relying on external contract manufacturing companies to fill the gaps. Consequently, the growing consumption of bakery items is expected to propel the bakery contract manufacturing market. For example, a report published by Agriculture and Agri-Food Canada in November 2023 indicated that in 2022, the United Kingdom ranked as the tenth largest global retail market for baked goods, valued at US$10.6 billion, representing a 2.4% market share. By 2027, this market is projected to grow at a compound annual growth rate of 5%, reaching retail sales of US$13.6 billion. Thus, the rising demand for bakery products is driving the expansion of the bakery contract manufacturing market.

The bakery contract manufacturing sector is poised for growth, driven by the escalating demand for convenience food. These food items, designed for swift and effortless consumption, cater to the needs of time-strapped consumers. Contract manufacturers offer a diverse range of convenience food products, allowing food companies to outsource production cost-effectively. A survey conducted by Itochu Corporation in August 2023 revealed that 45% of respondents purchased ready-to-eat (RTE) lunch boxes, with over 10% consuming them weekly, especially prevalent among men and younger demographics. This consumer behavior signals a rising inclination towards convenience foods, bolstering the bakery contract manufacturing market.

Major companies in the bakery contract manufacturing market are pursuing strategic partnerships to drive innovation, expand their product offerings, and enhance supply chain efficiency. Strategic partnerships involve companies leveraging each other's strengths and resources to achieve shared benefits and success. For instance, in September 2024, EQUII, a U.S.-based food technology firm, collaborated with Bridor, a French baking company, to improve the nutritional quality of bakery products. As part of this partnership, EQUII will provide Bridor with its protein-packed yeast flour, enabling Bridor to create a range of high-protein baked goods for the food service industry across North America. This collaboration aims to address the increasing demand for nutritious, high-protein, plant-based bakery options while maintaining great taste.

Major companies in the bakery contract manufacturing market are prioritizing the development of natural ingredient solutions to meet the growing demand for clean-label, natural ingredients in baked goods. Natural ingredient solutions involve using clean-label, minimally processed components that enhance flavor, texture, and nutritional value while aligning with consumer preferences for healthier and more sustainable food options. For example, in December 2022, Galactic, a Belgium-based fermentation technology company specializing in bakery products, launched Galimax Flavor K-10, a versatile ingredient designed for sweet baked goods like muffins and cheesecakes. This innovative solution maintains the quality of baked items throughout their shelf life, offering food manufacturers a clean-label alternative to traditional preservatives while ensuring a high-quality, handcrafted taste experience.

In August 2024, QualiTech, a U.S.-based manufacturer of plant nutrition and food ingredient products, acquired Ellison Bakery for an undisclosed amount. This acquisition is aimed at enhancing QualiTech's product offerings and expanding its footprint in the bakery sector. The strategic move seeks to leverage Ellison's expertise and innovation to promote growth and improve customer satisfaction. Ellison Bakery is a manufacturer of baked goods and inclusion ingredients based in the United States.

Major companies operating in the bakery contract manufacturing market include De Banketgroep B.V., HACO Holding AG, PacMoore Products Inc., Blackfriars Bakery, Southern Bakeries LLC, Cibus Nexum BV, Hearthside Food Solutions LLC, Richmond Baking Company, Oakhouse Bakery, Adventure Bakery LLC, Michel’s Bakery Inc., General Mills Inc., Perfection Foods Ltd., Bimbo Bakeries USA, Dawn Foods, Flowers Foods, Grupo Bimbo, Hostess Brands, Kellogg Company, Mondelez International, Nestle SA, PepsiCo Inc., Sara Lee Frozen Bakery, The Hershey Company, Tyson Foods Inc., Unilever plc, Weston Foods Canada, Yamazaki Baking Co Ltd., Aryzta AG, Campbell Soup Company.

Europe was the largest region in the bakery contract manufacturing market in 2024. The regions covered in the bakery contract manufacturing market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the bakery contract manufacturing market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Bakery contract manufacturing involves a collaborative arrangement where a bakery business engages another entity to produce specific ingredients, packaging, or entire products as per the bakery's specifications.

The primary products within bakery contract manufacturing encompass specialty and nutritional bakery items along with traditional bakery products. Specialty and nutritional bakeries focus on producing a limited range of baked goods, and they often rely on bakery contract manufacturers for safe and efficient production and packaging solutions. These manufacturers offer a range of services including manufacturing, packaging, custom formulation, and research and development (R&D), catering to the needs of both small and medium-sized enterprises (SMEs) and larger corporations within the baking industry.

The bakery contract manufacturing market research report is one of a series of new reports that provides bakery contract manufacturing market statistics, including the bakery contract manufacturing industry's global market size, regional shares, competitors with a bakery contract manufacturing market share, detailed bakery contract manufacturing market segments, market trends, and opportunities, and any further data you may need to thrive in the bakery contract manufacturing industry. This bakery contract manufacturing market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The bakery contract manufacturing market consists of revenues earned by entities by providing services such as label manufacturing, contract packaging (plastic, flow wrap, cartons), lab testing, and other related services. The market value includes the value of related goods sold by the service provider or included within the service offering. The bakery contract manufacturing market also includes sales of cookie dough, muffins, flatbreads and more baked goods. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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