How the frozen process changes the bakery market – How market demand changes; – Supply chain challenges; – Technological solutions (from frozen to fully baked products, trend to clean label); – Example for bread, croissants; – Technical solutions (from dough processing to packaging); – Economic consequences.

1. How frozen process changes the bakery market ?

2. 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

3. 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

4. Clean Label Crusty bread (no fat, no preservatives) : 6 hours shelf-life !

5. Crusty bread is even better when freshly baked

6. Countries where crusty bread is cultural, traditional, Mediterranean influence
Demand for crusty bread is growing worldwide
1,5 billion inhabitants

7. Demand for crusty bread is growing worldwide
Growing demand for crusty bread :
-Low-carb
-Low-fat
-Mediterranean diet SIMPLY GOOD !!!

8. 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

9. 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

10. 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

11. 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

12. Supply chain challenge, economical challenge,
growing challenge
Source : UN
Traffic jam in Cairo

13. 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 ?)

14. 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

15. Frozen bread : the proven success

16. Distribution of frozen bread

17. Distribution of frozen bread

18. 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 :

19. 1. No flaking :
Frozen at core
No flaking
Thin and crusty crust
Two challenges : technical / economical

20. 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

21. Make up process : ability to handle wet and fermented dough
1. Flaking :
Two challenges : technical / economical

22. Baking process : fast baking at high temperature to avoid water losses during baking (10-12 %)
1. Flaking :
Two challenges : technical / economical

23. 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

24. Thanks to these process parameters, it is possible to reach the highest level of quality
Frozen bread : high quality

25. 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

26. 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

27. 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

28. 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

29. 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 %

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

31. 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

32. Modified Atmosphere Packaging (MAP)
A “B to C” solution
Alternative solutions

33. 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