How Does a Recession Affect the Bakery Industry in the US?

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A still life of sweet treats from a bakery on a wooden table.
A still life of sweet treats from a bakery on a wooden table. (Image: olgakr/iStock/Getty Images)

A recession can stimulate psychological triggers that take economists by surprise. A need to feel comforted may override the seeming logic of hoarding precious dollars for anything but necessities. Past recessions have demonstrated what experienced bakers know: While overall, this country's bakeries are negatively affected by a recession, those who offer small, baked luxuries may earn a delightful uptick in business.

It's Not the Bread

Jana Muniz, a 10-year veteran of the bakery industry and owner of Whisk-y Business in Dripping Springs, Texas, sums it up: “In America, we are not a bread culture. In France, where the routine is to buy fresh bread every morning, I believe a recession would take longer to affect a bakery than in the United States.” Muniz also notes “luxury” baked items, such as cakes and cookies, are harder to predict -- consumers may purchase just enough at a time to treat themselves. The cupcake business experienced this trend in the recession that began in 2007, with cupcake bakeries booming. Muniz equates it to establishments that serve alcohol, noting that “a manager of a night club once told me no recession ever hurts that type of business.”

Alter the Mix

Bakery owners can alter their offerings to take advantage of consumers who are looking for affordable indulgences by changing the inventory in favor of sweet treats while paring staples production. Other strategic modifications include catering to health concerns, such as using organic or gluten-free ingredients.

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