The global packaged bakery market remains largely split between mature Western markets where growth is relatively hard to come by, and fast-evolving markets primarily in Asia, where packaged bakery continues to see strong growth due to lower penetration rates, changing consumer diets and rising disposable incomes. This dynamic is especially pronounced in bread and bread products.
In Western markets, there are a number of issues restricting bread consumption, especially amongst Millennials. These include the poor health perception of bread, the growth of wheat avoidance, and a comparatively weak connection with the on-the-go snacking and variety-seeking lifestyles of Millennials.
Despite mounting health pressures, sweet bakery is faring better in many of the mature Western bakery markets. However, health issues are continuing to bear down on the sweet bakery market with more innovation around added nutritional properties and a focus on sugar reduction likely to continue to shape the sector. Given the fragmented and regionalised nature of the global bakery market, there are great opportunities to bring concepts from one region to another. The industry can benefit from a growing consumer interest in variety of product and in introducing non-traditional formats to excite and engage. A growing focus on quality and artisanship in bakery can also be good news for the industry, creating space for more premium varieties to develop and grow the value of the market.
A focus on sugar content has led to reformulation. Consumers are turning against sugar in droves with six in ten consumers in Poland, Spain and Italy and five in ten in France and Germany, for example, stated they were actively reducing their consumption of, or avoiding, sugary foods, in Q3 2016. The good news for sweet bakery producers though is that the ‘war on sugar’ is specifically related to refined, white sugar. Less processed sources of sweetness can still provide the taste experiences that consumers crave and are seen in a much more positive light, even when they are still calorific. The sugar concerns also apply to bread. Where obesity and sugar concerns have been heightened in recent years, low/no/reduced sugar launches accounted for one in ten bread introductions in 2016 in Latin American countries, more than double the global average. Over the last year, notable products have included vegan, raw and grain-free bakery products that have now established a niche. The growth of vegetarianism and veganism in Western markets has had an impact on bakery in 2016. Many of the vegan bakery products coming to the market are using trendy grain-free coconut or almond ingredients and are tapping into free-from and Paleo diet trends, as well as the ‘raw’ food positioning. Three products using this new positioning include Nüco Cinnamon Coconut Wraps (France), Ape Man Food Co. Onion Flatbread (USA) and Boutique Cacao Protein Bites Mix (UK).
Adding sensory appeal to bakery through texture is on the rise with both bread and cake segments suffering from a boring image in many of the established packaged bakery markets, more excitement could be derived from dialling up sensory appeal.
Last year, a significant eight percent of all bread and bread products launched globally featured a gluten-free claim, a share that has edged up in recent years. However, in the most developed markets, there are signs that gluten-free breads are reaching a limit in terms of penetration. This is certainly the case in NPD terms, with the proportion of launches that are gluten-free falling in North America, Australia and New Zealand in recent years.
In 2017 the industry is likely to see a continued focus on quality and craftsmanship, allowing both established and newer players to offer more premium and value-added products. In bread, especially, consumers are linking rustic style, and natural and unprocessed indicators to a more healthy and high quality/artisan purchase.
Chris Brockman
Research Manager Mintel Food and Drink, EMEA Region
