The UK craft bakery sector outlook in 2023

The pandemic, labour shortages, energy costs going through the roof, the cost of living crisis, the HFSS regulations – the UK's craft bakery sector has been bombarded with one challenge after another. However, a recent survey among members of the Craft Bakery Association indicates that most bakers are also expecting exciting prospects in 2023, especially as they pivot to attract consumers changing some buying habits in response to the financial crisis.

Energy is the biggest bugbear ​​as bakers head into the new year, but the CBA, like others in the industry, have not sat back quietly, and sent a letter to UK Chancellor of the Exchequer Jeremy Hunt to highlight the challenges, query the uncertainties and lay out the needs.

Light on the horizon

But its not all doom and gloom amongst CBA’s members.

In 2023, bakers think convenience will be the leading consumer criteria, with 46% of thos esurveyed expecting their customers to shop locally. That’s good for the baker on the high street. So, too, is the prospect of the lunch on-the-go traffic returning to pre-COVID levels, expected by 41% of respondents.

These changes to buying habits are being driven by the trajectory rise in the cost of living, which has seen customers encouraged to support small, local businesses and has also resulted in a decline in some consumers eating out, especially for lunch.

However, the tough economic climate is unsurprisingly worrying bakers. More are worried about the decline in consumer sales as the inevitable price increases as bakers grapple to come to terms with the cost of fuel and ingredients.

The CBA’s survey indicates that 55% bakers believe demand for low-cost loaves will increase and people will be less inclined to treat themselves with more indulgent products, including personalised items.

While 2022 saw the continued growth in consumer interest in their own health, going into 2023, only 3% of bakers see HFSS regulations as a challenge and 52% will not be making changes to their offerings.

Tremendous resilience and innovation

“There’s no question the ongoing cost of living crisis has posed a threat to our members and the craft bakery industry in 2022 and we aren’t expecting this to end anytime soon,”​ Karen Dear, CBA’s director of operations told BakeryandSnacks.

“However, we are continuously working hard, alongside our members, to ensure sufficient support is available and we are pleased to see that despite obvious concerns, our members still see some opportunities ahead. Our members have shown tremendous resilience and innovation over the last two years, despite unprecedented challenges and I am confident that they will continue to do so and ultimately, that the sector will continue to remain resilient in the current climate.”​

We chat to Dear for a deeper insight into the highs and lows, challenges and opportunities facing the sector.