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Bakery faces identity crisis, says analyst

By Oliver Nieburg , 07-Aug-2012

Bakery faces identity crisis, says analyst

The global bakery industry is juggling with both indulgence and healthy trends that have now made their way to Asia, according to an analyst.

Euromonitor food analyst Deborah Cross said in a blog post that the industry was “facing a crisis of identity”.

She said that on the one hand, consumers were looking for innovative indulgence products, while on the other demanding items with less salt and fat.

“Bakery manufacturers face the challenge of how to satisfy such divergent consumer demands,” she said.

Cross added that the conflicting demands, which had started in Western Europe and North America, had begun springing up in emerging markets.

“This contradictory trend is now emerging in Asia Pacific and Latin America, where high-fibre bakery products are appearing alongside decadent cookies and pastries,” she said.

However, she indicated that bakers needn’t be alarmed as manufacturers could satisfy both
objectives in the fragmented bakery market.

Indulgence through convenience

To stay ahead of the demand for indulgence, Cross said that the industry had to develop new innovations to capitalise on peoples’ need for convenience.

“As consumers are becoming increasingly globalised, a growing variety of packaged ethnic breads are becoming available,” she said.

Sharwood’s is one player with a diverse range of ethnic offerings such as chapattis and naans, while Discovery and Mission Foods has an assortment of flour and wholemeal tortillas.

Other more traditional players such as Warburtons and Kingsmill have spiced-up the format of their offerings.

Warbutons recently launched Square-ish Wraps and Sandwich Thins, while Kingsmill introduced Pockets in white and 50/50 formats.

Cross added that breakfast biscuits, such as Kellogg’s All-Bran biscuits launched earlier this year, would also gain traction as consumers move away from traditional comfort zones.

Rise of healthy bakery

Euromonitor notes that in tandem to the indulegence trend, health-focused bakery is also on the rise.

The market research firm valued the health and wellness bakery at US $74bn in 2011, up 3% on the previous year, with North America and Western Europe leading the way.

However, Cross said that the healthy bakery trend was rising quickly in other markets.

Euromonitor forecasts that China, Thailand and Indonesia are demanding more functional/fortified bakery, with growth rates of 11%, 9% and 6% respectively.

Cross concluded: “Perhaps, over the next five years, healthy and indulgent products can be developed to satisfy all tastes and preferences, preventing further consumer confusion through mixed messages.”

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