In the wake of historic change in the ownership structure of the U.S. baking industry, a period of quiet consolidation may have been expected to follow in the U.S. bread market. The picture to emerge instead has been a very different one. The largest companies in the baking industry have been aggressively jockeying for position, battling for shelf space and making major moves to ensure their production base is competitive.

What’s at stake in the baking market was described in blunt terms in recent remarks by R. Steve Kinsey, executive vice-president and chief financial officer of Flowers Foods, Inc., Thomasville, Ga.

“Each share point in the fresh packaged bread category translates to roughly $100 million in top-line sales for Flowers,” Mr. Kinsey said Sept. 3 during the Barclays Back-to-School Consumer Conference in Boston. He said picking up a larger piece of the pie is no small feat.

“Each share point of market share will be hard-earned, but achieving these goals will create tremendous value for our shareholders,” he said.

From the perspective of overall demand, 2014 has been one of the best years for the bread business since before the 2008 recession. The total fresh bread and rolls market was estimated by Information Resources, Inc., a Chicago-based market research firm, at $13,686,809,000 in the year ended Aug. 10, up 1.1% from the year before. Unit sales rose more modestly, to 6,013,851,136, up 0.4%. Sales of fresh bread alone were $9,002,842,112, up 0.4%, while unit sales were 3,915,256,952, down 0.14%.

Increased popularity of grilling as well as sandwiches as part of a macro snacking trend were cited earlier this year by an industry executive as a source of strength for fresh baked foods.

“Grilling is increasing in popularity across America,” said Irene Chang Britt, president of Pepperidge Farm, Inc., Norwalk, Conn. “More than 60% of grill owners say that they grill year round, and the buns and roll segment is currently the fastest-growing segment within the bakery category.” Ms. Britt credited strength in Pepperidge’s “core range of breads” to “the growing popularity of sandwich behavior.”

She said consumption of bread in sandwiches over the past year has grown 4.5%, given new energy by what she described as one of the hottest trends in eating — macro snacking.

“Macro snacking in the United States is a $102 billion market growing at about 3%,” Ms. Britt said. “This is being driven by Americans snacking more frequently across all day parts. These eating occasions are increasingly replacing more traditional mealtimes as people look to mini-meals to keep them going during their hectic days.”

She said sandwiches are well suited to consumer preference for “a variety of food to address different needs from nutritious foods that will get them going, sustain energy and control hunger to more indulgent treats.”

“In all cases, people are looking for convenience, flavor and excitement,” Ms. Britt said.

Sandwich bread has been a vehicle for satisfying this demand, she said.

Largest among the many bread industry acquisitions in recent years were the November 2011 acquisition by Grupo Bimbo S.A.B. de C.V. of the North American fresh bakery business of Sara Lee Corp. for $709 million and the July 2013 acquisition by Flowers for $355 million of most of the bread business of Hostess Brands. The Bimbo acquisition, making Bimbo the nation’s largest bakery by a wide margin, included 41 plants (one of which was divested as part of a consent agreement with the Department of Justice) and brands that include Sara Lee, Sunbeam, Colonial, Heiners, Grandma Sycamore´s Home-Maid Bread, Rainbo and Earthgrains. The Flowers acquisition included 20 baking plants and other assets, including well-known brands such as Wonder, Home Pride, Merita and Nature’s Pride. Flowers is the second largest baking company in the United States.

The transactions have brought transformational change to the buyers. For example, Flowers Foods holds a 14% share of the branded share market, said Allen L. Shiver, chief executive officer, a jump from only 7.9% as recently as 2011.

“The past few years have been very dynamic for the industry,” he said at the September Barclays conference. “But, Flowers has gained share by winning new customers in our existing markets, as well as expanding into new markets by both acquisitions and introducing our proven brands to new customers.”

Among the weapons highlighted by Mr. Shiver in the company’s battle for market share, the assets Flowers acquired in the Hostess liquidation ranked high.

“Of course, the brands we have acquired are a new factor in our growth plans,” he said. ”Wonder is a powerhouse brand. Prior to the Hostess exit, Wonder had the highest household penetration of any individual white loaf bread in the country. Wonder also has showed the highest trial and repeat rate of any white bread in thecountry.”

Mr. Shiver noted Flowers took considerable market share from the legacy Hostess brands during the period following the November 2012 Hostess shutdown, but he said the Wonder and Home Pride brands still have “relevance” in the marketplace.

Looking at various individual markets around the country, he noted the Hostess bread brands recently held a 20% share in Kansas City and about 10% in Cleveland and Cincinnati.

“I cannot overemphasize the advantage of having a familiar brand when entering a new territory,” Mr. Shiver said. “Having the new brands gives us additional traction from the very start.”

Hostess baking plants acquired at a bargain basement price represent another plus for Flowers, Mr. Shiver said. He said Flowers has reopened Hostess plants in Henderson, Nev., and Knoxville, Tenn., for a fraction of the cost of building new, greenfield plants (which he estimated would cost $65 million).

He predicted Flowers would reopen another two or three Hostess plants in 2015-16 and still another two or three plants in 2017-18. Over this same period, many other Hostess plants will be sold, he said. Nine plants are currently listed for sale, he said.

Private label sales were soft over the past year, and Mr. Shiver said an opportunity exists for baking to chip away at private label, even though the share held by store brands has held within a fairly narrow range between in the mid-twenties for several years.

“The bread category is over-indexed in store brand,” he said. “We have been working with retailers to demonstrate that a more balanced allocation between branded and store brand items can improve their bottom line and also improve Flowers’ bottom line.”

In fresh bread, private label held a 24% dollar share over the past year and a 36% unit volume share. Private label dollar sales were down 0.3% for the year while unit sales slid 0.7%.

Amid the significant initiatives Flowers is pursuing in the wake of its Hostess acquisition, Mr. Shiver said the company has not turned its back on innovation.

“We continue to invest in consumer research to identify consumer trends that can contribute in a meaningful way to our category,” he said.

During the summer, the company introduced Cobblestone Bread Company, a relaunch of the Flowers’ super-premium Cobblestone Mill brand.

“The brand’s primary target is the growing millennial demographic and offers an assortment of specialty breads that cater to those who like to prepare unique and delicious gourmet style sandwiches,” Mr. Shiver said. “We call these breads our everyday artisan. We are catering to a generation that wants to do more than make a plain sandwich. They want easy access to the tools and knowledge that help them achieve a similar experience they find in their favorite sandwich shop. We’re excited about the opportunities afforded by this new brand and hope you will seek out and try these new products.”

The volatile dynamics of the bread market also have been highlighted by Bimbo executives in recent months. Daniel Servitje, the company’s c.e.o., said the return to the marketplace of bread brands formerly owned by Hostess and now mostly owned by Flowers has made the bread category “challenging.”

While Bimbo’s branded bread business has been stable, private label sales were down 7% in the second quarter ended June 30, he said.

Fred Penny, president of Bimbo Bakeries USA, Horsham, Pa., said in July the sharp drop in private label sales occurred abruptly and caught the company off guard.

“The private label volume decline is, quite frankly, I would say a bit of a surprise in that we didn’t see those trends last year,” he said. “I think a number of things have happened. Food inflation in other segments, especially in protein, the price of meats. Higher energy costs, higher health and welfare costs that are all affecting the lower income consumers and a significant reduction in SNAP and food stamp benefits. And I think some of those economic forces are affecting the lower income consumers. That may be part of what’s playing into private label volume softness in some cases.”

Like Flowers, Bimbo also is vying for market share and has seen some progress, Mr. Penny said.

“The share data would suggest a shift, some shift from private label to branded,” he said. “Clearly, with the former Hostess brands back in the market, as I mentioned earlier, in a flat to slightly down market that is going to result in volume and share moving around. So that is just the reality of what’s taking place in sliced bread at the moment.”

Mr. Penny said Bimbo was “very comfortable with how our brands have responded,” from the perspective of market share, volume and in the face of competitive market dynamics.

Improving profitability also is a top-of-mind issue for the leading baking companies, as evidenced by recent remarks by leading executives. Despite the competitive market conditions, improved margins are thought likely ahead.

“We see a clear path to EBITDA margins of 13% or greater,” Mr. Kinsey said. “As always, we will need to execute.”

The target is an ambitious one for a company that, historically, has generated EBITDA margins averaging 10.6% and has a long-term target of 11% to 13%.

Elements of the company’s business plan Mr. Kinsey said give him confidence the stretch target is achievable include the 25 basis points he expects to gain from the integration of Lepage Bakeries and the divestment of a tortilla business; 100 points from reduced stales and returns (figures inflated in recent years, he said, by new product introductions and the company’s entry into new geographic markets); 100 basis points from improved efficiencies; and 25 points from reduced Hostess plant carrying costs.

Similarly, Mr. Penny said even as competitive dynamics have put pressure on profitability, improvements at Bimbo are expected.

“I expect some performance improvement in the second half of the year going forward,” he said. “I expect there will be a bit more stability in the categories as we go forward as well.”

Also like Flowers, Bimbo executives have emphasized that while optimizing the company’s production base has been expensive in the near term, longer term Bimbo will benefit. For instance, in the second quarter of 2014, these costs aggregated $47 million. Over time, Mr. Servitje said the actions will help drive productivity enhancement through an optimized distribution network and a stronger configuration of manufacturing assets. He said 18 plants have been closed in the 2½ years since the Sara Lee baking business was acquired while two new plants have been added to the manufacturing base.

“During the quarter we closed the Vernon plant in California, and we announced the closure of another one, Bay Shore in New York,” Mr. Servitje said. “We remain on track with these initiatives and we will continue to balance driving growth and waste elimination to improve margins.”

The prospective value to Bimbo’s financial results of the Bay Shore closing was emphasized by Mr. Penny.

“That was a significant project that fell into the second quarter,” he said. “And we have also taken the opportunity to accelerate some of our route integration work, which will again drive benefits as we get into the back half of this year and into 2015.”

Even more recently, the company at the beginning of September said it would cease production at its Harrisburg, Pa., baking plant before the end of the month.

While not active in the merger and acquisition activity of recent years, the nation’s third largest baking company, Pepperidge Farm, Inc., has not stood still.

In the most recent quarter, sales volume of bread and rolls grew.

Describing fiscal 2014 (period ended July 28) as “a very strong year” for the fresh bakery business at Pepperidge Farm, Ms. Britt said strong demand for buns and sandwich bread has provided a significant boost.

She spoke July 21 just ahead of the end of the company’s fiscal year during a 3½-hour investor day meeting with Wall Street analysts hosted by parent company Campbell Soup Co.

“Our fresh bakery business has had a very strong year to date,” she said. “Retail sales are up about 7% versus the previous year to date, and we have gained market share. Despite increased competition in the category, we maintained a steely focus on delivering the fundamentals.”

A year earlier the company said it had gained a surprisingly large share of the bread business that opened up with the November 2012 bankruptcy of Hostess Brands. Ms. Britt said she was confident Pepperidge would keep those share gains, even as Wonder and other Hostess brands have returned to the market.

In a March presentation to investment analysts, Ms. Britt said the share gains have benefited retailers, contributing to Ms. Britt’s confidence the company will retain its share gains.

“As we cycled that and went back out to talk to the retailers about maintaining the shelf space as the (Hostess) brands are coming back in, the retailers have primarily agreed with us about the benefit that they got from the premium bread,” she said. “Velocities were so great that they actually are standing behind that decision to increase the shelf space for premium bread, and we are very, obviously, happy about that decision.”

Ms. Britt said success the company has had with a prime demographic — parents with young children — gives her greater optimism about the long-term picture for the Pepperidge brand. A key has been the company’s success with the Swirl bread line aimed at the breakfast market.

“This past year we have gained 3 household points of penetration in bread, which is very hard to do, on the basis of Swirl,” she said. “And that was young families, young forming families, actually coming into the franchise because of the innovation that has been brought there.”

Regarding sandwich bread and the macro snacking trends she said were boosting that segment, Ms. Britt said Pepperidge will devote considerable resources to maximizing its participation in this opportunity.

“We will work to continue to build the appeal of our premium sandwich bread selection by stepping up consumer investment and in-store activity focused around inspiring sandwich ideas,” she said. “We will also continue to push the boundaries in the premium segment with new artisan breads that are currently in test market in selected Northeast markets.”