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Industry advances, consumer demands, and technological trends are driving new demands in the baking R&D space. For a unique perspective on these changes, and a look at how companies are responding, BAC reached out to Graham Dalziel, Business Development & Sales Manager with Handtmann Canada Limited. Here's what he had to say...

What are the dynamics of Canada's baking industry today?

The demand for higher quality and more convenience in food products, including bakery, is driven by a growing global middle class. We’re seeing that in research, which is projecting Canadian demand for pizza crust, for instance, growing at 8.0% CAGR, while cake and pastry, bread and cookie, and biscuit growth is projected in the mid-6% to mid-7% range.

While consumers are pushing quality standards ever higher, and business demands are pushing traditional speed and accuracy production requirements to new limits with automation, Canadian bakeries are addressing those changes by improving their line functionality and energy and production efficiencies – all with a total focus on food safety. 

At the same time, R&D departments are developing higher quality frozen and convenience items to supply this demand and need equipment designed to address these new production requirements for very accurate and high-speed dividing, depositing, and sheeting that is still gentle on the dough and easy on premium quality inclusions. 

Flexibility is also naturally emerging as a top tier consideration because of the ever-increasing demands for new variations on current offerings, and the tighter development timelines for products featuring emerging ingredients and different flavour profiles that help promote value-added statements targeting more highly refined consumer sub-groups. 

What's more, with all of the investment in new products and their variations, bakers seem to now, more than ever, be looking for the fullest benefit out of their equipment, labour, and ingredient investments.

What is driving equipment purchases?

As mentioned, R&D departments in large industrial facilities are focussing on higher quality artisanal products as well as the growing segments of organic and gluten free bakery goods and snacks. We also see a trend where the Canadian consumer has shifted away from packaged versions of baked goods and are now gravitating toward premium specialty products with higher quality ingredients. This seems to be driving the growth of smaller bake shops. While all of this makes gentle handling more important, it also places a premium on equipment flexibility and the ease and speed of changeovers. 

So, a number of Canadian companies seem to be drawn to modular, multi-functional, and high-speed equipment lines as opposed to single-purpose equipment. And, while production performance in the bakery often used to be the main standard for equipment purchasing, business issues are now entering the discussions at a much earlier stage. Today, there are often more influencers from different departments involved in the buying process. We’re also seeing a need for more precise business projections that are often tied to financing requirements.  

The traditional discussions of initial pricing and service quality are now, more often than not, quickly expanding to include very detailed reliability data, more serious calculations of labour savings, and even proprietary customer calculations. 

The customer’s goal is to better understand how an equipment purchase may fit into both short-term plant production requirements, the company’s longer-term strategic product direction, and their total business performance demands. All of this, in turn, increases the weight put on capital equipment lifecycle costs by Canadian bakeries and favours equipment with better reliability, reduced maintenance and service requirements, and lower parts costs.   

What other big movements are occurring in the R&D space?

We see a few main ones, including an R&D movement to premium artisanal items with ancient grains and other, more expensive ingredients; tighter concept to market timelines; and the expansion of exports, meaning that the R&D departments of exporting Canadian bakeries will be adjusting to meet changing consumer demands in non-Canadian markets, and that could also have a cross-pollinating effect on domestic offerings.

As well, while SKUs are growing – or maybe because SKUs are growing –there seems to be a renewed focus on the efficient use of existing ingredients in new recipes to simplify purchasing and inventory issues. So, flexibility seems to be a watchword with ingredients as well as with equipment.

What industry changes / trends do you see taking shape over the next three years? How are you planning to address these?

We are anticipating these areas continuing to emerge:

  1. Automating labour intensive processes once deemed only manual because of quality concerns will be a dominant discussion.
  2. Lowering labour costs and increasing outputs with the installation of continuous production lines will become necessary to compete globally.
  3. Highly accurate portioning at very high production speeds while maintaining artisanal quality will be paramount.
  4. R&D departments will be looking hard at ethnic product opportunities for our ever growing diverse Canadian population and for export markets.

Graham Dalziel is the Business Development & Sales Manager with Handtmann Canada Limited. For more information, visit www.handtmann.ca.