The global bakery products market is forecast to reach $447 billion by the year 2017, according to a report from Global Industry Analytics (GIA). The growth will be largely fueled by new consumer preferences for conveniently portioned and easy-to-consume bakery goods.
Populations continue to move from rural to urban areas, increasing demand for convenience foods such as breads, pastries, cakes and biscuits. Deli and in-store bakery goods also are experiencing growth as consumers shift away from meat and packaged goods. Among the fastest-growing products in the category are donuts, specialty breads, pizza and gourmet, according to the report.
As consumers are busier than ever, they are turning to satisfying, handheld snacks like pita sandwiches and wraps. Changes in workforce participation and attitudes, as well as growing incomes, also have increased consumer emphasis on convenience. Innovations in packaging reflect the changing consumer lifestyles, as they are largely based on snack, re-sealable, single-portion and “mini” products.
Growth in developing markets
The bakery products market is fairly mature in developed regions such as North America, and Western Europe, meaning future growth primarily will be derived from the emerging markets of Asia-Pacific, Latin America, Eastern Europe and the Middle East, according to the report.
In developing markets economic prosperity, increased disposable incomes, higher living standards, rising employment rates and shifting lifestyles resulting from cultural changes are acting as an impetus to bakery products. Indeed, cake consumption in Asia is growing rapidly, while biscuits are leading sales gains in Eastern Europe.
Developing markets offer higher potential for greater market penetration, and rise in per capita consumption, while in the developed markets, innovation in new flavors and healthy ingredients will add to consumption frequency.
Europe makes up the largest regional market worldwide, with the United States and Latin America in second and third, respectively, according to the report. However, the Asia-Pacific market is projected to take the lead in long-term growth potential, expanding at the highest compound annual growth rate of 6 percent through 2017.
Bread/Rolls represent the largest segment globally, followed by Cakes/Pastries. The Morning Goods product segment is expected to emerge as the fastest-growing product segment, with a compound annual growth rate of 5 percent.
Southeast Asian countries offer “robust business prospects” for bread manufacturers, particularly China, Hong Kong and Malaysia, which are experiencing a bread boom, according to the report. Rising standards of living, more westernized lifestyles and less time to prepare elaborate home cooked meals are all contributing factors to the sharp growth in these markets. Numerous new bakeries have been established in China and Hong Kong over the last few years, reflecting the growing popularity of bakery products in general.
Bakery products’ wide appeal
The bakery products industry caters to a vast consumer segment, ranging from five-year-old children and upwards. Thus, manufacturers likely will segment the bakery products market according to the age of the targeting consumer group. The indulgence products primarily target adults, while novelty brands are aimed at children. However, lucrative teen market and the increase in individuals aged over 60 years represent additional opportunities for bakery products manufacturers.
In-store bakeries are increasingly gaining significance in the bakery products market as well, especially in sales of fresh, unwrapped bakery items, according to the report. In-store bakery activities boosted private-label sales in the United States and the United Kingdom.
In certain markets such as Spain and Germany, a majority of the distribution is carried out through independent bakeries and artisan producers. In such markets, multiple grocery in-store bakeries distribute their parbaked and fresh products daily through each bakery outlet’s network. The success of Western-style bakery products in the emerging markets, such as Asia, Eastern Europe, and Latin America, partly depends on the development of supermarket chains in these regions. In certain regions, there is a scarcity of modern distribution systems and modern retail formats are under supplied in rural areas. Small, local producers that serve their surrounding vicinities dominate the markets in such regions.
The research report titled "Bakery Products: A Global Strategic Business Report" contains analysis for the major geographic markets, such as the United States, Canada, Japan, Europe, Asia-Pacific, Latin America, and Rest of World. Market analytics are provided for product segments including Bread/Rolls, Morning Goods, Cakes/Pastries, Savory Biscuits, Sweet Biscuits, and Other Bakery Products. The study also provides historic data for an insight into market evolution over the period 2003 through 2008.