Prepared Flour Mixes and Doughs

SIC 2045

Companies in this industry

Industry report:

This industry classification is comprised of establishments primarily involved in manufacturing prepared mixes and doughs from purchased flours. Establishments primarily involved in milling flour from grain and manufacturing grain mill products, including prepared mixes and doughs, are classified in SIC 2041: Flour and Other Grain Mill Products.

Total revenues in the prepared flour mixes and doughs industry reached $1.8 billion in 2009, according to Dun and Bradstreet. Approximately 158 establishments employed 5,700 workers. Seventy-two percent had fewer than 50 employees. However, companies that employed more than 100 employees accounted for 89 percent of total sales. Michigan accounted for nearly 79 percent of revenues with $1.41 billion, followed by California with $143 million (eight percent). No other state had a two percent or greater market share by revenues.

The concept of commercial mixes first developed when millers began adding a leavening agent and salt to flour products to make "self-rising" formulations. Self-rising flours became popular in the Southeast United States because traditional leavening agents, such as baking powder, had limited shelf life in hot, humid climates.

The development of a stable shortening led to the introduction of the nation's first biscuit mix in the 1920s. Cake mixes tentatively appeared during the 1930s after the industry learned how to dehydrate eggs. Because mixes were convenience products rather than necessities, further commercial development was hampered by the economic hardships and product shortages associated with the Depression and World War II. Following World War II, however, the country embraced convenience. Cake mixes reappeared and began to find increasing popularity not only with homemakers, but also among restaurants and institutional users.

Health and nutrition factors have played a prominent role in sagging sales, followed by the convenience factor, especially compared with the convenience of in-store bakeries and the revived availability of trendy specialty/artisan bakeries selling straight-from-the-oven products. The high-protein, low-carbohydrate ("low-carb") diet fads of the 2000s, as well as a nutritional shift from refined carbohydrate products to whole grain products, played a significant role in depressing the market. However, as economic struggles plagued the nation in the mid- and late 2000s, cake and other bakery mixes maintained the advantage of lower prices. Some segments, such as brownie mixes, were less affected by in-store bakeries due to the relative high cost for in-store brownies. Sales of cookie mixes also had to contend with easy-to-make refrigerated cookie doughs that offered numerous selections.

Finally, the harmful role of "trans-fats" in the U.S. diet, found largely in baking margarines and shortenings, further contributed to declining consumer interest. Most prepared and packaged cake mixes, piecrusts, and doughs contained large amounts of trans-fats. Partially hydrogenated oils were commonly used in cake mixes, snack cakes, doughnuts, pie crusts, crackers, pancake and biscuit mixes, muffins, and breakfast cereals. Effective January 1, 2006, the U.S. Food and Drug Administration (FDA) mandated labeling requirements regarding the listing of these ingredients in food items. Grams of trans-fat must be included on the nutritional label. In this particular industry, which is heavily weighted with food products that contain a key form of trans fat (i.e., "partially hydrogenated oils"), the future market looked grim. Prepared mixes and dough manufacturers worked to modify their products and to initiate "nutritional correction" efforts by replacing trans-fats with other ingredients.

A report by the Mintel Group showed that the U.S. baking and dessert mixes market grew less than two percent from 2001 to 2006, and sales actually declined when inflation was taken into account. According to Mintel, "The market is highly dependent on product innovation to provide incremental sales growth, and competition from ISBs [in-store bakeries] and alternative markets consistently challenges sales." Nevertheless, a 2005 market research report published by Mintel had indicated that a majority of surveyed households (64 percent) continued to use cake mixes and pudding mixes and 54 percent used brownie mixes. Thus, the more palpable decline in the industry was not in the prevalence of use, but rather the quantity of products used per household or per capita.

Another issue affecting the industry in the late 2000s was Americans' increased awareness of food allergies. According to the American Academy of Allergy, Asthma, and Immunology, more than 11 million Americans have food allergies; about three million of these are allergic to gluten, which is present in wheat, rye, and barley. In response to these and other health concerns, companies began producing more "-free" products. The demand for organic mixes was also increasing. According to the Mintel Global New Products Database, the number of organic, low or reduced allergen, and gluten-free baking mixes available rose significantly in the last years of the 2000s. As reported in Supermarket News, 167 organic, 136 low/no/reduced allergen, and 109 gluten-free baking items were launched during the first six months of 2008. Examples included gluten-free brownie, chocolate cake, and chocolate chip cookie mixes from Bob's Red Mill and organic selections from Nature's Path and Dr. Oetker. Hodgson Mill, among others, was also creating organic and gluten-free baking products. As consumers became more health conscious, checking labels more frequently, the category was expected to grow with consumer needs and desires.

In 2009, General Mills became the first industry leader to begin rolling out a line of gluten-free products under its Betty Crocker brand name in response to an influx of customer queries the previous year requesting gluten-free choices. However, rather than launch a traditional advertising campaign to promote the new line, General Mills focused its resources on the Web. The company sent out hundreds of samples to bloggers who wrote about gluten-related topics and paid for top placement on Google and other search engines when consumers typed in such phrases as "gluten-free birthday cake" or "gluten-free brownie mix." General Mills' gluten-free line of baking mixes costs about $2 more than a regular cake or brownie mix but the company anticipated a loyal customer base of people anxious to have gluten-free products on the store shelves. For its part, in 2009, Pillsbury introduced a better-for-you line of sugar-free cake and brownie mixes.

One of the industry leaders in the early 2010s was General Mills Inc., of Minneapolis, Minnesota, which had revenues of $14.8 billion in fiscal 2010. General Mills produced the popular Betty Crocker and Bisquick baking mixes, along with a host of other food items. U.S. retail net sales for 2010 were $10.32 billion. Of that total, baking goods accounted for $854.8 million. Orrville, Ohio-based J.M. Smucker Co., known for its jams and jellies, purchased International Multifoods Corporation in 2004, adding to its product line major brands such as Pillsbury and Hungry Jack. While General Mills owned the ready-to-bake Pillsbury lines (e.g., biscuits, breakfast, pie crusts, etc.), Smuckers owns the rights to the Pillsbury brand for its flour mix lines. Revenues for J.M. Smucker in fiscal 2010 reached $4.6 billion. Of that total, its oils and baking goods business segment generated $905.7 million in revenues.

Chelsea Milling Company, headquartered in Chelsea, Michigan, owned the Jiffy Mix brand. Known for its economical offerings of baking mixes, Chelsea Milling distributes over 1.6 million boxes of Jiffy Mix across the United States every year. The company had revenues in 2009 of approximately $100 million. First created in 1930 by Mabel White Holmes under the slogan, "The mix is so simple, even a man can do it," the family-owned company remains in the hands of Holmes' grandson, Howdy Holmes.

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News and information about Prepared Flour Mixes and Doughs

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