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Bakery China 2017

Penchant for Western products supports China’s bakery boom, says analyst

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Gill Hyslop

By Gill Hyslop+

12-Jun-2017
Last updated on 16-Jun-2017 at 10:39 GMT2017-06-16T10:39:57Z

China's bakery market is booming, thanks to the consumer's taste for international products as well as a stipulation for highly decorated sweet cakes.
China's bakery market is booming, thanks to the consumer's taste for international products as well as a stipulation for highly decorated sweet cakes.

China's bakery sector is a thunderous market, spurred on by consumers who have a great desire to develop their knowledge of Western products.

They are particularly fond of cakes and sweet pastries, and the country’s bakery sector has been the most dynamic around the world, growing in double digits in the past decade.

By 2018, Canadean forecasts that China will be catapulted into second place in value terms globally, just behind the US, with an estimated $47bn bakery sector.

Cecelia Yang, senior research associate at Euromonitor International told BakeryandSnacks the evolution of the Chinese bakery market generally consists of an integration of traditional Chinese baked snacks with trendy western products.

“It’s been observed that the latter is getting increasingly popular. For instance, pastries registered the fastest current value growth in 2016, largely due to a rich product portfolio with both traditional and modern product types,” she said.

“Major new products launched by both packaged food manufacturers as well as bakery shops also contributed to fast food expansion of pastries in China.

“The rapid expansion of the Chinese bakery sector is mainly owing to the increased popularity of Western lifestyles and the Western diet, in particular, among the younger generation who prefer baked goods for their daily meals, especially for breakfast or afternoon tea, to meet their on-the-go demands considering the accelerating pace of their life.”

Bakery is big business

Meat floss sweet cakes

The latest food craze in Shanghai involves sweet cakes topped with dried-meat floss.

The popularity of this product type is directly associated with the local bakery Master Bao, which expanded fast with its meat floss sweet cream cakes in Beijing and Shanghai via super aggressive marketing online.

However, while it remains a mystery to most foodies why the snack has become such a phenomenal hit, it does follows the Chinese love for combining savory with sweet flavors, like the wildly popular mooncake filled with spicy crayfish meat.

“The recent rising popularity of sweet cakes with meat floss is primarily owing to the fact that the combo of meat floss and sweet cake is quite niche and therefore excites consumers’ curiosity and interest,” said Yang.

The country’s consumer has a penchant for Western-style products that are adapted to the Chinese market, such as soft European bread, which was very prevalent at the Bakery China trade show that BakeryandSnacks attended in Shanghai last month.

“From a consumer’s perspective, anything that originates outside China is better,” AB Mauri Chain’s VP Graham Martin told us.

However, the similarity usually ends in the look.

Chinese bakery products – from breads to pastries, to excessively detailed and indulgent cakes – all have a high content of fats and sugars and feature a soft, buttery texture.

So while the appearance is artisanal, the inner bread is soft and sweet. Croissants, too, are often teamed with cheese or cold meats, to appeal to the Chinese inclination towards salt.

What the consumer wants

It’s never been more important to know exactly what the consumer wants than in China: it’s vital to a company’s success, said Ted Rich, senior VP, Rich Products Corporation, which has had a footprint in the country for almost 25 years.

“It’s important to understand what the Chinese consumer wants – their tastes, their trends, their communities. Their taste profiles are very different to anywhere else in the world,” said Rich.

Ted Rich, senior VP, Rich Products Corporation

It’s also critical to understand that the appearance of baked goods is vital to their success.

“Chinese consumers really pay attention to the appearance of the product. It must be pleasing to the eye,” he said, pointing to the brightly colored and intricately decorated cakes.

Rough seas ahead?

But it might not be all plain sailing for the industry if certain factors aren’t considered.

According to Yang, issues like possible rising costs on imported goods could restrain the market’s healthy development.

“Considering a large amount of bakery products and ingredients are imported from overseas, the bakery market is greatly impacted by any change regarding custom duty for imported products,” she said.

Another restriction that could possibly have a more detrimental effect on the sector is the closer attention to cleanliness and safe food practices, which, to date, have generally been lacking in the country.

Like most Western consumers, the country’s populace has a much more strengthened awareness of what goes into a product and how it’s made.

“In terms of the potential food safety threats, policies and laws on food safety are expected to greatly influence the market by placing a stricter quality control standard,” said Yang.

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