Traditional eating patterns are fast disappearing, driven by increasing numbers of women in the workforce, the fragmentation of traditional family structures and an increase in single-occupancy households, according to market analysts Euromonitor, and food producers have been quick to respond with ever more convenient and upmarket products.
Euromonitor's latest global bakery products report looks at how the commodity status of many bakery products and the growing presence of private label offerings has raised the importance of manufacturers presenting a distinctive and focused identity for their brands. Market conditions have appeared to increasingly favour major players with the resources to develop premium products and support them with extensive marketing campaigns.
Product segmentation is also starting to play an increasingly important part in manufacturers' product development strategies, leading to a growing number of products targeting specific consumer groups such as children, young adults and the elderly.
Children have long been targeted as a specific group, with strategies including the introduction of child-oriented flavours, tie-ins with movie and television characters and novelty products, such as biscuits that colour milk when dunked.
However, segmentation in the adult category has come in for more concentrated attention from manufacturers recently. For example, products with added calcium would be targeted at elderly consumers in order to reduce the risks of osteoporosis.
As well as convenience, product innovation has also reflected the growing awareness of nutritional issues. In most developed countries, the trend towards healthier eating, which had been developing concurrently with that towards indulgence products, has become increasingly important. Consequently, the continuing demand for premium products and the innovation strategies of baked goods specialists focused on products perceived to be healthy and sophisticated, such as novelty breads, Euromonitor said.
While development of low-calorie variants of certain foods has proliferated over the last five years, it has become evident that the vogue for the low-carbohydrate Dr Atkins diet has started to influence consumption patterns. Euromonitor reveals that, despite adverse publicity which has prevailed as the medical profession disputes a diet that is not balanced and focuses heavily on high protein content which includes products that are high in saturated fats, it is likely that manufacturers may consider developing this market niche, as the vogue for the diet shows no sign of abating.
Packaging innovation has also become increasingly important in bakery products, as manufacturers have sought to adapt to changing eating habits and demographic and social trends. The increase in snacking has been particularly influential with regard to packaging, leading to innovations aimed at convenience and portability. The maturing of many markets has also meant that packaging has become an increasingly significant factor in generating value sales through the development of added-value products.
For the most part, the companies that saw success in 2002 and 2003 sought to align their product packaging activities to accommodate busier lifestyles. Successful packaging strategies included smaller-size packs, new zipper bag technology providing longer storage life, key-word labelling of products to promote health benefits, re-branding and the use of comic book and cartoon characters to appeal to children.
Logistical problems regarding the transportation and storage of perishable goods and deep-rooted traditions of purchasing artisanal products, resulting from the historic status of bread as a staple in many national diets around the world, underpin the extremely fragmented nature of the global bakery products market, Euromonitor said.
However, the market has experienced a gradual but ongoing process of consolidation for a number of years now, and the trend continued in 2002 as the share of global value sales accounted for by artisanal products declined by a further 0.1 percentage points to 46.9 per cent.
Euromonitor's report also reveals that within bakery products, private labels accounted for an increasing share of global value sales in every area in 2002. The increase was underpinned by the growing significance of supermarkets in both developed and emerging markets. Although multiple grocer penetration remained low in many developing markets, some such as China witnessed a significant rise in sales of private label products, as their low prices and, increasingly fresh, in-store baking, appealed to consumers.
The major growth markets over the 1998-2003 period were in the developing regions of Asia Pacific and eastern Europe, driven by the fact that both regions started from a relatively low consumption base. But higher disposable incomes, the growing influence of Western culture and diet, more working women, longer working hours, more liberal economic policies and the spread of manufacturing and distribution networks and growing penetration of storage technology also contributed to the steady gains, the report claims.
The development of retail systems in the Asia Pacific region is also are set to bring consumers into contact with a growing variety of bakery products. Moreover, manufacturers are expected to invest in the expansion of distribution to the region's vast and significant rural areas, as urban markets become increasingly mature. Developing retail networks and deepening multinational penetration are also predicted to be significant factors in spurring strong volume and value growth in the emerging regions of Africa and the Middle East and Latin America.