The Market for Communion Wafers

A recent article titled "How Nuns Got Squeezed out of the Communion Wafer Business" tells the story of the market for Catholic communion wafers.  Groups of nuns began producing communion wafers for churches over a hundred years ago.  There was an intensity to the work as, during the first half of the 20th Century, the nuns would cut each wafer individually.  We are talking about millions of wafers, so this was in part a labor of love.  Then a priest asked a man named John Cavanagh to build a machine that would cut the wafers at a larger scale.  Cavanagh not only built the machine for the nuns to use; he also entered the market himself. The company he founded is now the dominant supplier of wafers in the U.S., producing about three-fourths of the wafers used in Catholic churches.  But in becoming the dominant supplier of wafers, Cavanagh's company has also driven out of the market many of the nuns who had been suppliers.

The main plot of this story is the non-profit nuns competing -- and ultimately losing out to -- the for-profit Cavanagh.  That alone makes the account worth reading.

Yet there are other elements that add color to the account and should not be overlooked.  For example:

• An increase in the demand for wafers in the middle of the 20th Century as many Catholics began to partake in communion weekly instead of monthly meant that new supply needed to be provided, and Cavanagh provided that supply.
• There was a recent, sharp decline in the demand for wafers during the Covid pandemic
• There have been several innovations in the ingredients and designs of new wafers -- both by Cavanagh's company and by the nuns.
• In recent decades, the changes in this market have occurred simultaneously with an overall decline in the number of nuns.

The article conveys a sadness about the loss of nuns as suppliers of communion wafers, but there is an underlying ambivalence.  The nuns were prescient entrepreneurs in this market over a hundred years ago, and that is an impressive feat.  But where the nuns showed the way, others soon followed and perhaps even did better.  Cavanagh's company is the largest supplier in this market now, but you never know if a future competitor will emerge and ultimately push out Cavanagh.