MAHA, Sustainability, Consumer Taste Shifts…and the Race to Reinvent

The clock just started. Three powerful forces are converging on the bakery aisle faster than most portfolios can pivot: government mandates, the GLP-1 prescription wave, and a consumer reset toward clean labels and "mindful indulgence". If you aren’t rethinking your portfolio now, you may already be behind.

The Mandate Crunch: Policy Changes that Hit the P&L

What’s changing—and when

• Synthetic food dye phase‑out by end of 2026: Implementing White House’s Make America Healthy Again (MAHA) agenda, FDA and HHS announced on April 26 a plan to phase out petroleum‑based food dyes, revoke certain authorizations and accelerate research for natural alternatives. Companies should expect supply tightness in 2026-2027 in natural ingredients due to reformulation pressure.
• Additives under new scrutiny: The US Congress has also moved quickly to support MAHA. As of this writing, proposals like GRAS Act (HB 4958) and Ban Harmful Food Dyes Act (HB 4858 / HB 5027) would force regular reassessments and deem certain synthetics adulterants by Jan 1, 2027.
• Packaging EPR: California’s SB 54 is the bellwether in the US, mandating all single-use packaging to be recyclable or compostable by 2032, with producer reporting due by November 15 tentatively. Across the Atlantic, the EU’s Packaging and Packaging Waste Regulation (PPWR) requires that all packaging on the EU market be recyclable by 2030.

Signals that the market is already moving

Colorant replacement:

• Food manufacturers replacing synthetic colors: Although formulation experts have estimated that the synthetic-to-natural switch could increase production cost by 10%, food majors aren’t waiting. Consumer Brands Association announced a voluntary commitment to cease using six FD&C colors by December 31, 2027. But The Campbell’s Company made a more aggressive pledge to remove artificial colors across its entire portfolio by August 2026, joining similar efforts by other food giants.
• Grupo Bimbo commits to full reformulation by 2030: The world’s largest bakery not only commits to elimination of artificial colorants from all products by 2026, it has also pledged to transition to all-natural ingredients by 2030.
• Suppliers roll out reformulation support tools: Food ingredient suppliers like Fuchs and IFF are introducing natural colorants and reformulation toolkits.

Sustainable packaging initiatives:

• Food industry coalition backs SB 54: Makers of popular cookies and baked snacks (e.g. General Mills, Mars, Mondelez, Nestle) recently launched the US Flexible Film Initiative to fund California recyclers for film and flexible packaging recycling, meeting California's EPR requirements under SB 54
• Grupo Bimbo nears packaging sustainability milestone: On the recycling front, the company recently announced it has achieved 94% progress toward its goal of making all packaging recyclable, biodegradable, or compostable by year-end.
• Bakery packaging gets innovative: California-based Verde Bioresins recently introduced FDA-compliant bread bags using biobased, biodegradable and recyclable polyethylene (or PolyEarthylene). Other innovations include baked snack pouches using Coveris’ new recyclable BOPP film, bakery bags using Nanopool’s plastic-free and recyclable transparent glassine paper window, Mondi’s functional barrier paper that keeps artisan bread fresh, and Saica Pack’s mono paper for packaging Mondelez’s Véritable Petit Beurre cookies.

Translation: With reformulation, packaging overhauls, label rewrites and supply chain rebuild, winners in this marketplace will be companies skilled with cross‑functional steering.

Pharmacology Meets the Pantry: GLP-1 Reshapes the Demand Curve

New laws aren’t the only forces steering packaged food companies to make healthier products. GLP‑1 prescriptions have more than tripled since 2020, and nearly 12% of Americans have tried them, according to a recent RAND report. Based on estimates, Americans have cut 1–2% off their food consumption due to the effects from GLP-1 drugs, with cookies and bakery products among the most exposed. Yet snacking is resilient: 91% of consumers still snack at least once daily, and Smucker’s CEO reports no “meaningful impact” from GLP-1 in the company’s core bakery categories, framing current headwinds as an economic pressure rather than taste change.

Translation: Despite the appetite-suppressing effects of GLP-1s, consumer snacking behavior reveals a more nuanced reality. Portion, nutrition, and format—still governs the aisle.

What shoppers actually look for:

• Mindful indulgence with portion control: According to a 2024 Mondelez study, 73% prefer having a smaller portion of a tasty, indulgent snack than a bigger portion of a low-fat or low-sugar version. A Flowers Foods presentation in August shows that bite-sized snack cakes are trending, with its new line of mini Wonder cakes “significantly” outperforming the sweet bakery category since launching in March. Meanwhile, more consumers are eating cookies and biscuits at least once a week, up 5% from a year ago, with a growing preference for on-the-go nutritious packs.
• Snack as a source of nutrition: Diet-conscious consumers are no longer relying on cutting calories and avoiding snacks. The Mondelez study shows that 78% of global consumers prioritize nutritional value over calorie counts. They read product labels to seek out foods with natural and functional ingredients. According to research firm FutureBridge, consumers are no longer seeing treats as either healthy or indulgent – they want the best of both worlds and are willing to pay more for products that deliver both.
• New flavors and formats: Research firm Circana observes that bakery products are outperforming center-aisle snacks in grocery stores, with croissants becoming the third-largest category in bakery sales. Hybrid formats -- like the cruffin (croissant + muffin), cronut (croissant + donut) and croffle (croissant + waffle) -- are fueling the trend. Gluten-free is also gaining traction as a format, with 32% of Americans buying GF either regularly or occasionally. According to Innova, 43% of bakery shoppers globally seek out "crazy and indulgent creations" and over 60% prioritize taste when purchasing sweet bakery products.
• Bread as a staple: According to consultancy Baking Innovation,  97% of Americans purchase bread weekly, but they’re increasingly opting for clean-label, high-protein and low-carb formats made with better-for-you ingredients like whole or ancient grains. Market researchers also report that sourdough and artisanal baked goods are gaining popularity around the globe. And with Taylor Swift’s recent sourdough “obsession” making headlines, interest in these elevated loaves is likely to rise even further.
• Low-price options: While consumers remain willing to invest in premium breads with functional ingredients, recent sales from Campbell’s, Flowers Foods and Smucker all but indicate inflation weariness. Budget-sensitive shoppers are increasingly trading discretionary snack items for protein-rich alternatives, prompting brands to hedge their bets with smaller low-price packs aimed at value seekers.

Translation: The winning brief is “indulgence with benefits” backed by price-pack options that fit tighter budgets, GLP-1-shaped appetites and on-the-go lifestyle.

The Rising Dough: Where to Place your Bets

The global bakery market is expected to grow from US$480 billion in 2024 to US$731.7 billion by 2032. Segments driving the delta are:

• Vegan desserts: 11.6% CAGR globally.
• Gluten‑free bakery: 7.92% CAGR globally, with gluten-free muffins and cakes growing at 12.0%.
• Ready‑to‑bake/dough premixes: 7.1% CAGR globally, with gluten-free mixes growing at 9.8%.
• Functional bakery ingredients: 6.9% CAGR globally, with North America accounting for 31% of global revenue in 2024.
• Sourdough bread: 6.8% CAGR globally.
• Artisan and specialty bakery: 5.7% CAGR globally (4.65% CAGR in US).
• Cookies and biscuits: 5.7% CAGR globally, with US reaching US$17 billion by 2032.
• Frozen bakery products: 5.2% CAGR globally.
• Cakes and pastries: 3.4% CAGR globally (5.2% CAGR in US).

Watchlist: natural ingredients getting scooped up fast:

• Ancient grains like amaranth, barley, einkorn, farro, quinoa, millet, rye, spelt, etc.
• Exotic ingredients such as turmeric, matcha, masala, miso, pandan, purple yam, etc.
• Gluten-free flours from almond, chia, chickpea, quinoa, oat, rice, etc.
• Natural sweeteners such as agave, fig, honey, monk fruit, stevia, etc.
• Nut and seed butters from almond, cashew, hazelnut, sunflower seed, etc.
• Plant-based pigments from annatto, black currant, butterfly pea flower, purple carrot, seaweed, etc.
• Plant-based proteins from fava, lentil, pea, rice, soy, etc.
• Wellness-boosting botanicals such as chicory root fiber, green banana, maca, mushroom powders, Omega-3 rich seeds, potato starch, psyllium husk, etc.

Translation: The bakery industry is anything but stale – it is now a wellness frontier. MAHA has fueled demand for natural ingredients that support heart health, reduce allergens, and promote gut-friendly formulations.

Companies that are Bullish (and Acting Like It!)

• Flowers Foods is leaning into premium better-for-you loaves (e.g. Dave’s Killer Bread, Canyon Bakehouse) and snack cakes (e.g. Wonder).
• Mars has opened a US$240M Nature’s Bakery facility in Salt Lake City, Utah, to produce 1 billion snack bars annually in better-for-you category as part of a broader US$2B U.S. manufacturing program.
• Mondelez aims to double its US$2B cakes and pastries business by 2030 via premium brand extensions and acquisitions.
• Smucker commits to lower‑sugar recipes, smaller packs, and budget-friendly $1 single‑serves for its Hostess Brand offerings, citing rising convenience‑store traffic.

Translation: The category is re‑mixing, not retreating, toward convenient and permissible indulgence with stronger functional cues. The successful contender in this marketplace will have a portfolio that caters to a wide range of bakery lovers, from premium to value-seeking.

Staying Ahead with Industry Intelligence Inc.

In a category where taste meets technology and wellness meets regulation, the winners will be those who anticipate, adapt, and act. Market leaders will navigate policy shifts, reformulation demands, and supply chain complexities with agility. Success will hinge on innovation that blends pleasure with purpose—delivering global flavors and functional benefits that resonate with today’s conscious consumer.

Your Next Moves:

• Track Shifting Laws: Our Legislation Monitor keeps you abreast of state and federal legislative changes well before compliance deadlines approach.
• Spot Trends Early: Our 360-Degree Market Drivers Report identifies emerging trends across supply chain, consumer behavior, and competitive activity—giving you a panoramic view of what’s next.
• Customize Your Market Intelligence: Get insights tailored to your portfolio and unique business drivers. Contact us for a consultative demo.