London, U.K. – Should we aim for health or indulgence?
That seems to be the question the global bakery industry is grappling with, says Euromonitor International.
On the one hand, consumers are demanding innovative products that provide indulgence and can be eaten as treats.
On the other hand, they may perceive bakery products as unhealthy and demand more items with less salt and fat, says Dr. Deborah Cross, a food analyst at Euromonitor.
Bakery manufacturers around the world are faced with the challenge of how to satisfy such divergent consumer demands.
Global growth trends
In 2011, emerging economies experienced the strongest retail growth across most bakery categories, particularly in Latin America and Asia Pacific.
In Western Europe and North America, manufacturers have tried to boost or maintain bakery retail value sales by means of a split focus on health and indulgence. The same contradictory trend is now emerging in Asia Pacific and Latin America.
The global convenience and snacking trend has led to more snacking breads, wraps, sandwich pockets and other products that have galvanized the industry.
Health and wellness
The health and wellness trend is seen mostly in North America and Western Europe, with an overall global value of US$74 billion in 2011 and a growth rate of around three per cent from 2010.
And North Americans tend to value organic products more than anyone else, with spending around US$17 per household, compared to a global average of just US$2.40.
North America is also the largest and most mature fortified/functional bakery market, although it registered a 2-3 per cent value decline in 2011. Conversely, growth rates of 11 per cent, nine per cent and six per cent, respectively, in 2011 ensured that China, Thailand and Indonesia were the fastest growing countries in fortified/functional bakery.
As of 2011/2012, Mexico has overtaken the U.S. as the country with the highest percentage of obese people in its total population. Consequently, it has experienced a rapid surge in diabetic product development since 2009, from nascent beginnings.
The Asian and Latin American markets have also recognized the benefits of consuming naturally healthy high-fibre products. The South Korean, Chinese and Indian markets have seen the strongest value growth since 2006, posting CAGRs of 15 per cent, 13 per cent and eight per cent, respectively, for high-fibre bakery.
From a better-for-you perspective, seaweed is one new and interesting ingredient in artisanal bread. In China, there is a trend towards including fruits or vegetables.
Globally, the largest gluten-free bakery market is Western Europe, where gluten-free is now recognized as a healthy food choice, rather than a necessary dietary requirement for sufferers of coeliac disease.
Ancient cereal grains are back in vogue, with regionally specific examples including amaranth, quinoa and corn (Latin America), oats and spelt (Europe) and millet and teff (Africa).
The future for global bakery remains positive, with the industry forecast to grow at just over a one per cent CAGR from 2011 to reach retail value sales of US$492 billion in 2016.
Global health and wellness bakery is set to grow at a three per cent CAGR and should account for around 17 per cent of total bakery sales in 2015.
Emerging economies will be central to manufacturers’ strategic focus. Attractive countries include India, Indonesia and Venezuela.