Sector report: The bakery sector keeps in touch with times and invests in the future

While the turnover of the diverse bakery industry increased in 2020, competition continues to be tight; imports are on the increase and so are bakery services and store baking points.

The exports of bakery goods are slightly on the increase. The shortage of skilled workers is already visible in bakery companies. The sector seeks renewal through investments and by launching new products and services.

These are the conclusions of the sector report on the bakery sector published by the Ministry of Economic Affairs and Employment on 8 December 2021.

Hundreds of bakeries

In 2020, the food industry’s turnover amounted to EUR 11.4 billion and the bakery sector accounts for about 10 per cent. Its turnover increased by just under five per cent last year, amounting to EUR 1.1 billion.

The shortage of skilled workers has started to show also in bakery companies. The key requirement for bakery and confectionery companies in different parts of Finland is that skilled workforce is available. The bakery sector employs approximately 7,000 full-time personnel in nearly 600 companies while the entire food industry employs approximately 34,000 full-time workers, so over 20% of the sector’s workers earn their bread from the bakery industry.

“The food sector is also facing challenges with matching the supply and demand of workforce and it expects to receive help in matching the supply and demand of workforce through the roadmap work launched by the Ministry of Economic Affairs and Employment. One sector to be looked at is natural resources, food production and the environment, says Leena Hyrylä, Food Industry Sector Manager at the Southeast Finland ELY Centre.

From local to international

In addition to increased imports, increased bakery services and store baking points have intensified competition. The imports of bakery goods amounted to EUR 123.7 million in 2020 and to EUR 127.9 million a year earlier. The coronavirus pandemic explains the decline in imports last year and the resulting changes in sales channels. The amount of imported bread purchased by Finns has tripled between 2002 and 2020 while the exports of bakery goods are slightly on the increase. In 2020, bakery goods worth over EUR 53 million were exported and this year the exports are expected to grow to more than EUR 54 million. The large bakery and cereal markets in Western Europe are attractive to Finnish companies.

In addition to breads and bread rolls, product categories such as gluten-free and wellbeing products, may offer interesting business opportunities. Through cooperation with online stores it may be possible to do test marketing and sell long-lasting bakery goods and cereal products. This information is included in the report’s internationalisation review produced by Business Finland.  

SME Barometer: Growth and customer oriented approach in food and bakery companies

Due to the coronavirus pandemic, 2020 was exceptional and the situation treated Finland’s diverse bakery sector in different ways. The pandemic has increased uncertainty about the future, but not suppressed the growth orientation of small and medium-sized enterprises in the food and bakery sector.  

The sector barometer  for the manufacture of food products indicates that SMEs in the food sector continue to be growth-driven. More than half of the SMEs that responded said they were pursuing growth; 20 per cent said they sought powerful growth, while 34 per cent said they would tap into any growth opportunities available.

The SMEs both in the food and bakery sector seek renewal through investments and by launching new products and services. Marketing and sales continue to be key development areas in food and bakery companies. While the utilisation of technologies and digitalisation are means to increase competitiveness it is vital to have consumer knowledge and seek renewal in the rapidly changing business environment, characterised by trends.

Business Sector Services are expert services provided by the Ministry of Economic Affairs and Employment that collate, analyse and distribute information about the operating environment for companies and the development of sectors.

Inquiries:
Leena Hyrylä, Sector Manager, Southeast Finland ELY Centre, tel. + 358 295 029 047 and email: firstname.familyname(at)ely-keskus.fi
Katri Lehtonen, Development Director, Ministry of Economic Affairs and Employment, tel. + 358 295 064 926 and email: firstname.familyname(at)gov.fi
Petri Koskela, Senior Specialist, Ministry of Agriculture and Forestry, tel. + 358 295 162 382 and email: firstname.familyname(at)gov.fi
Esa Wrang, Head of Food from Finland program, Business Finland, tel. + 358 400 243 076 and email: firstname.familyname(at)businessfinland.fi