The structure of the bakery industry will also be reshaped by the polarization between commodity and premium bakery products, and by emerging channels in the market, the market research firm added.
Dietary trends help develop new products
Dietary trends will still move in the direction of low carb, high protein, gluten- and grain-free, and sugar/fat/salt consciousness, presenting an opportunity for some bakery producers to reformulate and develop new products to tap into these trends, the report stated.
“But more significantly, expect more promotion around the benefits of consuming bakery products, especially surrounding fiber and wholegrain content,” Mintel said.
“Promoting the provenance of wheat can also bring a new storytelling and premiumization opportunity for bread producers. Major bread players will also continue to look to promote added health benefits through trendy ingredients, such as ancient grains/seeds and superfoods.”
Euromonitor also said the free-from grains trend is gaining pace as gluten-free becomes a global standard in the bakery industry, BakeryandSnacks previously reported.
In addition, Mintel suggested that sweet bakery products could start to move in a decidedly healthier direction with pressure on sugary foods ramping up.
“Vegan and plant-based diet trends also suggest more scope for cake producers to experiment with fruit, vegetable and nuts as ingredients, and using alternative natural sweetening agents.”
More M&A activity
With consolidation as a continuing theme, there will be much more M&A activity in the major packaged bakery markets, with plenty of opportunities to buy positions in fast-growth niches, Mintel said.
“The largest global bakery players start to prioritize expansion in the emerging bakery markets of Asia. Global growth in bakery consumption will continue to be led by markets such as China, India, Vietnam, Indonesia and Thailand.”
The Chinese bakery market , in particular, is highly fragmented with three companies, including Toly, Pan Pan and Dali taking the largest share, BakeryandSnacks previously reported. But this fast-growing market is likely to experience consolidation as other large players develop in the near future.
On the horizon, Mintel added, continued growth in single-person households across the world and a renewed focus on environmental issues is likely to place further emphasis on smaller and single-portion packs of bakery products.
“This is likely to further polarize the bakery market between economy products, including bulk packs, where private label will take an increasing share, and more premium, single-serve products. The move toward online grocery purchasing and alternative routes to market may start to reshape the industry and open up new, largely unexplored, channels for bakery, such as home delivery and vending.”