Bakery products are part of the processed food category. They include cake, pastries, biscuits, bread, breakfast cereals, and other products. The growing per-capita consumption trends of bakery products indicates the untapped growth potential in the global bakery products industry. The market potential is huge in the emerging markets; wherein, consumer demand is increasing for packaged products, as a result of the influence of Western culture and also for its convenience. The total market size of the bakery products is expected to reach USD 530 billion by 2023, at a 2.6% CAGR during the forecast period.
Allied Bakeries has launched a chia seed bread in the UK though its Burgen business as it looks to capitalize on the nutritional benefits from the seeds and a consumer trend for healthy breads.
The bakery products segment is part of a demand-driven market for convenience food. The major market drivers include the convenience of ready-to-eat products, changing lifestyles and food preferences, and large varieties of flavored foods. Even though the market growth of such products is good, a few constraints such as health consciousness of consumers and restraining food laws in certain countries, are slowing down the pace. Innovative product development of low trans-fat, low fat, multigrain, whole grain, and organic baked products, are expected to provide an impetus to the whole industry. Penetration into the packaged and premium segments of bakery products is expected to provide further opportunity to the growth of the market.
The bakery products market can be broadly segmented into three major segments, such as product type, distribution channel type, and geography. Regarding product type, the bakery products market can be classified into bread and rolls, cakes, biscuits, morning goods, doughnuts, pastries, and others. Bread and rolls have the largest market share accounting for around 45% of the demand. Morning goods, comprising of breakfast cereals, are projected to exhibit the fastest growth during the forecast period. By distribution channel type, the market can be segmented into hyper markets, super markets, convenience stores, departmental stores, specialty stores and online purchase.
With a market share of around 40%, the European region is the largest market regarding bakery products consumption. In North America, demand for bakery products with soluble dietary fiber helps in maintaining the market demand. The developing regions such as South America and Asia- Pacific are currently the growing markets. India, China, Brazil, Argentina and South Africa are the most attractive entry markets. They are supported by the large population, high demand for ready-to-eat foods, and improving lifestyles which are reflected in their food consumption preferences. Currently, other regions are growing at a slow pace due to the low demand for bakery products.
The competition in the global bakery products market is reported to be huge, mostly in the developed nations, such as North America and Europe, where a large number of small and big enterprises are operating in a limited market. The growth opportunities can still be seen in the developing regions such as China, Brazil, Argentina, South Africa, and India due to the huge population driven demand for bakery products in these countries. This is the reason for most big players to expand their businesses in such a huge growing market. The booming bakery industry and multiple market distribution channels and the popularity of various flavored baked foods are expected to help the market grow at a good pace. Product launches and mergers and acquisitions with smaller level players have been strong business strategies in these regions.
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