Key Findings from the Capital Spending Study (Image Credits: Pexels)
The baking and snack sector continues to navigate economic pressures and operational demands. Capital spending decisions reflect these realities, with companies focusing on immediate gains rather than long-term environmental goals. A recent study revealed that efficiency overshadowed sustainability as the primary driver for investments, signaling a pragmatic approach amid rising costs and labor challenges.
Key Findings from the Capital Spending Study
The Baking & Snack 2025 Capital Spending Study, conducted by Cypress Research and sponsored by BEMA, surveyed representatives from baking companies. Respondents indicated that just over half viewed sustainability as unimportant for investment goals. Only 19% cited sustainability as the main motivation for their purchases.[1]
Equipment efficiency drove 33% of decisions, while functionality motivated 23%. These results underscored a clear hierarchy in priorities. Marjorie Hellmer, president of Cypress Research, explained the trend: “The primary drivers when making these kinds of investments is efficiency just like it is when they invest outside of sustainability. It’s efficiency and functionality.”[1]
This pattern held firm despite external pressures from consumers, retailers, and regulators pushing for greener practices.
Operational Efficiency as the Core Priority
Bakers directed funds toward upgrades that boosted productivity and cut costs. Labor shortages emerged as a top concern in related surveys, prompting investments in automation. For instance, 73% of bakers in the 2024 study identified workforce attraction and retention as their biggest challenge.[2]
Capital plans shifted from expansions to streamlining existing operations. Systems improvements topped the list at 84%, followed by packaging equipment at 83%. Maintenance and parts also ranked high at 69%.[2]
- Improve process capability and flexibility: 72%
- Enhance product quality, consistency, and accuracy: 66%
- Decrease labor costs: 61%
Such moves promised quicker returns, especially as raw material and energy prices climbed.
Sustainability’s Limited Influence
Green initiatives garnered attention but rarely led spending choices. The 2025 study confirmed sustainability’s secondary status, with most investments justified by performance metrics. Bakers weighed upfront costs against operational benefits, often favoring the latter.
Even in efficiency-focused projects, some overlap existed. Automation reduced waste and energy use indirectly, aligning with sustainability without making it the headline goal. However, direct eco-motivations stayed low at 19%.[1]
This restraint reflected broader caution. Industry leaders noted that while environmental pressures mounted, profitability remained paramount.
Persistent Investment Amid Challenges
Later studies reinforced the efficiency focus. The 2025-26 Baking & Snack Capital Spending Study, fielded to 1,300 commercial bakers, showed capital budgets holding steady despite a dimmer outlook. Only 30% expressed a very positive company view for 2026, down from 53% the prior year.[3]
Upgrading equipment (32%) and systems like automation (73%) dominated plans. Packaging led equipment investments at 74%, with software and robotics close behind. Goals mirrored earlier trends: improving quality (55%), flexibility (52%), and cutting labor costs (52%).[3]
| Investment Area | Percentage Planning Investment |
|---|---|
| Maintenance and parts | 74% |
| Packaging equipment | 74% |
| Systems improvements (automation) | 73% |
| Facility upgrades | 58% |
Rising raw material costs topped concerns at 62%, eclipsing labor issues. Kerwin Brown of BEMA observed, “There’s all these pressures coming in on them, but there’s just no option – they’ve got to spend, they’ve got to go forward, they’ve got to be more efficient.”[3]
Key Takeaways
- Efficiency and functionality drive most capital decisions, with 33% prioritizing equipment efficiency.
- Sustainability motivates just 19% of investments as the primary factor.
- Automation and upgrades persist, targeting labor savings and quality amid economic headwinds.
The baking industry’s capital strategy highlights resilience through targeted efficiency gains. As challenges evolve, these choices ensure competitiveness without compromising core operations. What strategies is your company adopting for future investments? Share your thoughts in the comments.
