04 Mar Capital Spending Outlook 2025: Trends, Challenges, and Key Takeaways

On February 24^th, the Baking & Snack Capital Spending Insights webinar provided an in-depth look at how industrial baking companies plan to invest in new equipment and technology in 2025. The conversation reflected a mix of optimism and caution as businesses navigate evolving challenges and opportunities.

Sentiment and Spending Trends

The industry’s overall outlook is improving, with 53% of bakery manufacturers expressing a positive sentiment, up from 46% in 2024. A slightly higher percentage, 60%, also report a more favorable outlook for the commercial baking sector. Contributing factors include a pro-business administration and the buzz surrounding major industry events such as Bakery China, iba, and IBIE.

Bakers are continuing to prioritize capital investments, with capital budgets projected to increase to an average of 12.8% of annual revenue, similar to 2023. Nearly half (48%) of survey respondents expect an increase in equipment investments, with many decision-makers focusing on ROI and planning well in advance—often more than a year ahead.

Challenges: Labor, Costs, and Food Safety

Labor shortages, employee retention, and rising material costs remain the top three business challenges for bakers. However, one notable shift is food safety’s rise in priority, now ranking fourth among key concerns. This is largely driven by high-profile recalls and the growing need for stricter oversight.

Interestingly, cybersecurity continues to rank low on the industry’s list of concerns, despite its growing relevance. As Mike LaValle, Corporate Account Manager at Intralox, noted, “Food safety, which is a critical concern in the industry, goes hand-in-hand with cybersecurity, demanding a level of vigilance to reduce preventable risk.”

Improving Quality and Efficiency

Standardization, efficiency, and uptime remain critical focuses for bakers. Many companies are investing in new equipment that prioritizes ease of maintenance, improved sanitary design, and quick assembly. They are also leaning on manufacturers to provide better inventory management solutions and standardization in parts naming.

One emerging trend is the shifting return on investment (ROI) timeline. Historically, bakers aimed for a three-year ROI cycle, but in today’s fast-moving market, that window is shrinking to two years. One of BEMA CEO, Kerwin Brown’s, major takeaways was that “Bakers are looking for a faster return, moving from a three-year cycle to a two-year cycle. The urgency to bring products to market quickly is driving this shift. Producers want to gain traction faster, and that impacts investment decisions.”

The Impact of Industry Shows

With capital spending on the rise, industry events are becoming an even more valuable resource for bakers seeking solutions. According to survey responses, 90% of participants said they would be attending IBIE, reinforcing the importance of in-person engagement. Exhibitors can maximize their impact by catering to attendee expectations, which include:

• Live equipment demonstrations and videos
• Advance communication about what will be showcased
• Clear descriptions of equipment capabilities, integration potential, and cost-benefit analyses
• On-site pricing and quotes
• Knowledgeable decision-makers available to answer questions

As Blake Day, General Manager at Coperion, emphasized, “One of the top reasons to attend shows in person is to see the equipment run. Come to the show floor ready to ask questions.”

Kerwin echoes this sentiment, “The IBIE survey provided valuable insights for exhibitors. Attendees have clear expectations—they want to see the equipment in action, understand its applications, and have access to knowledgeable representatives. Those who prepare accordingly will see the most engagement.”

Looking Ahead

Bakers continue to balance strategic investments with market uncertainties, from supply chain disruptions to shifting consumer demands. With ROI expectations tightening and labor challenges persisting, capital spending strategies will likely remain dynamic. However, with a record-level percentage of annual revenue allocated to investments—matching the highs of 2022 and 2023—the industry is clearly committed to innovation and growth.