US upturn lifts global bakery sales

Related tags Bakery products Nutrition Baking Omega-3 fatty acid

A return to growth in 2003 after a lacklustre performance in the US
market in 2001 and 2002 contributed to the 8.3 per cent increase in
global bakery product sales last year, according to a new report.
Artisanal products continue to dominate the market, although
packaged bread and baked goods are taking an increasingly important
share.

A new report from Research and Markets claims that the global bakery products market was worth some $271 billion in 2003, a figure inflated partially by the weakness of the US dollar against the euro and other currencies in key markets, but also boosted by the upturn in US sales.

The improvement in North America was, in turn, attributed to a number of factors, including the growing awareness of health issues. Starchy foods such as bread have been targeted by low-carb diet fads such as Atkins, but baked goods producers have fought back with a raft of 'healthier' product launches, and this had a considerable influence on overall category sales.

"As part of a more general drive to develop consumer perceptions of bakery products beyond those of staple, commodity items, manufacturers increasingly emphasised the health benefits of ingredients such as soluble fibre. There was also an increase in the availability of low-fat, low-sugar and low-calorie variants of existing products. Moreover, bakery products increasingly appeared with added functional ingredients, such as vitamins, minerals and omega-3 fatty acids, all claimed to reduce the risk of major afflictions such as heart disease or cancer,"​ the report claims.The health trend is part of a wider change in consumer purchasing habits driven by the relentless growth of the supermarket industry, the report suggested, attributing the increase in packaged baked goods sales to the proliferation of large store formats throughout the world.

"Consumers place a growing emphasis on convenience, and manufacturers' strategies of product and packaging innovation are exploiting demand for products which require little or no preparation and are portable enough to be consumed 'on-the-go',"​ the report said.

"The increasingly busy lifestyles of consumers meant that few had time to shop daily for fresh produce, and 'one-stop' weekly shopping in large-scale outlets became increasingly common. Moreover, multiple grocers developed Internet home delivery and 'metro' format stores in urban centres to meet the needs of busy consumers."

Improving economic conditions in a number of markets also led to an increase in sales of premium products, positioned as adult-oriented, indulgent treats. "While this trend was significantly undermined by growing economic and political uncertainty in the wake of the terrorist attacks of 11 September 2001 and the war in Iraq in 2003, to some extent the 'life-is-too-short' attitude that ensued served to underpin continued interest in the concept of indulgence as a motivator in the purchasing of bakery goods,"​ according to the report.

But if there was a boost to revenues from higher sales of premium products, turnover was negatively affected by increasing price competition, in particular among supermarkets and discounters in mature markets. These retailers aggressively expanded and promoted their private label ranges, as well as often employing discounted bakery products to generate higher sales, the report said, with an inevitable impact on value.

Related topics Ingredients

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