how frozen process changes the bakery market?
TRANSCRIPT
How frozen process changes the bakery market ?
Frozen bakery market
Frozen bakery has already changed market : - To increase at a CAGR of 7.1% through 2018 - To reach a value of $32,505.2 million by 2018
Frozen bakery products : - Croissants - Crusty products - Burger buns - Rolls - Danish pastries - Brioches - Cakes - Bagels - Muffins - …
Represents more than 25 % in volumes
Take it as an example Source : Companies & Markets
$32,505.2 million
2018 2014
+ 7,1 %
CAGR of the frozen bakery market
Crusty… What is crusty ?
Caramel flavor (Maillard reaction) Crispiness THIN CRUST Short bite Melting in mouth No preservative, no chemicals
Yeast (including natural improvers) Flour Water Salt
Clean Label Crusty bread (no fat, no preservatives) : 6 hours shelf-life !
Crusty bread is even better when freshly baked
Countries where crusty bread is cultural, traditional, Mediterranean influence
Demand for crusty bread is growing worldwide
1,5 billion inhabitants
Demand for crusty bread is growing worldwide
Growing demand for crusty bread : - Low-carb - Low-fat - Mediterranean diet
SIMPLY GOOD !!!
Fresh bread : a supply chain challenge
Mixing 30 min
Proofing 120 min Baking
20 min Cooling 30 min
3H30 TO MAKE BREAD
Make-up 10 min
Fresh bread : a supply chain challenge
3h30 to make bread
6 hours shelf life
Extremely difficult to make bread Ingredients control Temperature and humidity control Process control Hygiene control
Cheap product
Very light (high cost to transport)
Fragile product
HIGHLY CAPEX DEMANDING
Extremely challenged by customers (Erik Kayser says : “A good bread makes a good sandwich”)
There is no OTHER SIMILAR
CHALLENGE in food industry
Fresh bread : a supply chain challenge
If no more bread at 6 pm SALES ARE LOST
Just in time : right quantity at a right time
If bread is not sold at 7 pm BIG LOSSES
When demand raises suddenly, it is too late to react : Risk N°1 : loosing sales opportunity Risk N°2 : wasting bread
Fresh bread : sometimes a political challenge
Many countries experiences recently RIOTS because : Bread is missing Bread is too expensive (or too cheap for bakers) In some countries, bread quality us an HEALTH ISSUE because BAKERS PUT A LOT OF
IMPROVERS TO COPE WITH THE ABOVE MENTIONNED DIFFICULTIES
We met a lot of top level political who are waiting for solutions for fresh bread supply chains
Supply chain challenge, economical challenge, growing challenge
Source : UN
Traffic jam in Cairo
Fresh bread: a supply chain challenge, INDUSTRIAL FROZEN BREAD : A PROVEN SOLUTION
Highly technical operations Capex consuming Excellent costs efficiency
required High safety standard
required High volumes Reduced losses of raw
material ….
INDUSTRIAL SOLUTIONS (why should bakery products not beneficiate of industry advantages ?)
Fresh bread: a supply chain challenge, INDUSTRIAL FROZEN BREAD : A PROVEN SOLUTION
Logistic issues Fragile, cheap, short shelf
life 3H30 to make bread vs
10 min to react to demand
variation Increasing transport
times to downtowns during day hours
INDUSTRIAL FROZEN BREAD SOLUTIONS Already booming « Cold Chain » to become FOR SURE a Fantastic business opportunity in future
Frozen bread : the proven success
Distribution of frozen bread
Distribution of frozen bread
Two challenges : technical / economical
How to prevent flaking :
Chemistry : not compatible with new demand (clean label)
Fat : not compatible with new demand (low fat, low carb)
Perfect process control
1. No flaking :
1. No flaking :
Frozen at core
No flaking
Thin and crusty crust
Two challenges : technical / economical
Mixing process (rest in bowl) to optimize : Water absorption Free water linked water
1. Flaking :
Two challenges : technical / economical
Perfect control of the free water in the baked bread
Make up process : ability to handle wet and fermented dough
1. Flaking :
Two challenges : technical / economical
Baking process : fast baking at high temperature to avoid water losses during baking (10-12 %)
1. Flaking :
Two challenges : technical / economical
Cooling process : controlling the water loss and the risks of condensing on the cooling support
Freezing process : Controlling the air flow to prevent peeling off Controlling the core temperature : final temperature balance inside the
product during storing or transporting Perfect control of the steam
1. Flaking :
Two challenges : technical / economical
Thanks to these process parameters, it is possible to reach the highest level of quality
Frozen bread : high quality
2. Costs are high :
Freezing is expensive (Capex, Opex)
Transport is expensive (negative temperature trucks, low temperature storage, light products with low value)
Packaging is expensive
Two challenges : technical / economical
Two challenges : technical / economical
SAVINGS ARE HIGHER !!! Better use of equipment and head overs :
24 hours a day production Less changeovers (longer batches)
Reduces losses during transport
No losses on selling points
High capacity to cope with demand variation on selling point
No preservatives costs
Two challenges : technical / economical
Some examples:
ARYZTA (Revenue in m€)
+80%
2012 2013 2010 2009 2011
HARRY BROT (Revenue in m€)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
489 515 580
645 650 669 738
813
910 930 + 90 % in 10 years
Savings in a production of frozen bread
Raw material
$7/9 cts
Energy
$1.2 cts for baking
$0,9 cts for freezing
Labor $1.2 cts
Packaging
$2.7 cts
Depreciation & other expenses
$2.5 cts
Industrial costs : Hypothesis : 20 hours a day. Line efficiency : 98 %
Examples : loaf baguette (315 g dough, 250 g final product( ex works direct costs)
TOTAL : freezing represents up to 20 % of the direct costs
Some figures
Overcost for freezing : ~ $15 cts per kg
Production capacity for a frozen line : ~ 2 tons per hour
Celling price : 1 € per kg $2,535 per hour
Turnover : $50,000 per day
ROI : about 30 %
Frozen Bakery Market to increase at a CAGR of 7.1 % through 2018 : Total $32.5 Billion by 2018
A fantastic business opportunity
Source : MarketsandMarkets.com
Fresh par-baked bread 2 days shelf-life Delivered at night Final baking during day
Alternative solutions
Usine
Final baking center
Final baking center
Delivery at night
Modified Atmosphere Packaging (MAP) A “B to C” solution
Alternative solutions
For each situation, there is an optimized industrial / logistic solution MECATHERM will be very happy to help you preparing your business case and manage your project from A to Z THANK YOU FOR YOUR ATTENTION