Bakery Industry Classification: Understanding the Economic Sector and Industry Standards

The bakery industry plays a significant role in the global food and beverage market, contributing to the broader manufacturing sector. This article explores the various classifications and standards used to categorize bakeries and other related businesses.

The Food and Beverage Sector

The bakery industry falls under the food and beverage sector, which is a key component of the manufacturing sector. The food and beverage sector encompasses all businesses involved in processing, packaging, and distributing food and beverages. Within this sector, bakeries can be categorized as either retail or wholesale, depending on their specific business model.

Retail vs. Wholesale

Retail bakeries sell directly to consumers through brick-and-mortar shops, online platforms, or mobile services. Examples include local bakeries, grocery stores with bakery sections, and home-based businesses. On the other hand, wholesale bakeries supply products to other businesses such as grocery stores, restaurants, and cafes. Wholesale bakeries may also sell directly to consumers through markets or specialized retail outlets.

The International Standard Industrial Classification (ISIC)

The International Standard Industrial Classification (ISIC) is a system developed by the United Nations to classify industrial activities on a global scale. It is based on the output of businesses rather than the production process. Therefore, if your bakery manufactures baked goods, you are classified under the manufacturing sector.

According to the ISIC, if your bakery focuses solely on manufacturing baked goods without any other activities, you fall under:

Section C: Manufacturing Division 10: Food Manufacturing Group 107: Baking of Bread, Pastry, Confectionery, etc. Sub-Group 1071: Baking of Bread, Pastry, etc.

However, if your bakery engages in multiple activities, such as selling other products or serving food, you may be classified under more than one division and/or group within the ISIC.

Agroprocessing: A Closer Look

Within the manufacturing sector, the bakery industry is often categorized under agroprocessing. Agroprocessing refers to the processing of raw agricultural materials into food products. This subsector includes a wide range of activities, from baking bread to producing confectionery items.

Individual Differences: Corporation vs. Small Business

The classification of a bakery can vary depending on its size, structure, and business operations. For instance:

Large Corporation: A large bakery with multiple locations and a significant product line may be classified as a manufacturer with products in every store. Small Bakery: A small, independent bakery may be classified as a retail establishment based on its direct sales to consumers. Sole Proprietorship: A single-person operation may be classified as a service-based business, focusing on production and limited retail sales. Partnership: A bakery run by two or three individuals may be classified based on the nature and scale of their operations.

North American Industry Classification System (NAICS)

In the United States, the North American Industry Classification System (NAICS) is used to classify businesses. The NAICS divides the economy into 20 sectors, with industries further grouped based on production criteria.

Bakeries are specifically classified under the Manufacturing sector, with subcategories for both retail and wholesale operations. As per NAICS, retail bakeries are classified under:

Primary Sector: Manufacturing Secondary Sector: 311 (Food Manufacturing) Sub-Category: 311811 - Retail Bakeries

To understand the full details of the NAICS system, you can refer to the official NAICS Manual.

By understanding these classifications and industry standards, businesses can ensure that they are correctly categorized, which is crucial for regulatory compliance, market research, and industry reporting.