These three companies share 7.8 per cent of the market thanks to strong sales of baked goods that are perceived as being "good for health", but do not compromise on taste, according to Euromonitor market researcher Irina Kazanchuk. "Current new product activity in the sector is focused predominantly around wellbeing, with the availability of wholemeal, sugar-free, gluten-free and low-fat products having increased sharply," she explained. "Whole" foods, or products that are as unprocessed as possible, are also entering the mainstream, she added. Taking the trend one step further, the global giants are moving into the area of functional or fortified baked goods, with the most popular being those which package the products in convenient packaging. "Positioning of the main market leaders is likely to remain unchanged as they will be concentrating on expending their "better for you" product offering and trying to keep production costs from rising," Kazanchuk said. Barilla Italy-based Barilla is currently the largest bakery company in Western Europe, and has held 3.8 per cent of the market since 2003. The company also owns the largest selling bakery brand in the region - Mulino Bianco, a range of baked good including bread, biscuits and pastries. "The brand is number one brand in Western Europe with market share of 1.3% in 2006, due to its strong position in Italy," Kazanchuk said. Barilla has also boosted profits over recent years thanks to acquiring operations in fast-growing emerging markets, and selling poor performing segments, she added. "For example, the company started operations at the Harry factory in Moscow, which would allow to increase brand offering in the region," Kazachuk said. "And in 2006, Barilla announced its plan to sell Granmilano, which includes Sanson, sepcialised in ice cream manufacturing, and Le Tre Marie, manufacturer of baked goods." Barilla now owns 27 factories and production facilities around the world, around half of which are in Italy, and the company supplies over 1,400,000 tonnes of pasta and bakery products each year. The company is now focused on promoting the health and wellness benefits of grains, after complaining that the low-carb diet trend during the late 90s hurt profits. Danone Groupe Danone is the largest general food company based in France, and number 9 in the global rankings, thanks to strong performances across a range of categories including dairy, bottled water, and nutrition, as well as bakery. The company is number two in terms of bakery sales, with 2.1 per cent of the Western European market, thanks to strong sales of biscuit brands such as LU, Tuc and Prince. Unlike Barilla, activity in the biscuit division has been quiet over recent years, Kazanchuk said. "Danone has been very active in merger and acquisition (M&A) transactions in various sectors of its operations, especially in dairy sector, but no M&A activities in the bakery sector," she added. However, Danone's biscuit section may soon fall into the hands of Kraft, after a proposed bid from the US food giant. Kraft announced its desire to acquire the division last July, hoping to consolidate its position as the number one biscuit maker in the world. If the decision is approved by the European Commission, Danone will concentrate on its more profitable dairy and nutrition divisions, while Kraft will gain a much stronger hold on the European and Asian markets. Kellogg Third position holder Kellogg is the largest US-based company in Europe, and has held a consistent 1.9 per cent Western European market share since 2001. Apart from the globally famous cereal brands such as cornflakes, the company also has strong sales in Europe with its ranges of cookies and biscuits. The company had total sales of almost $11bn (€7.6m) in 2006, with European sales reported as increasing seven per cent over the year. "Kellogg will likely continue promoting its products in Western Europe trying to decrease its dependence on the US market," Kazanchuk said. "The company is more likely to introduce more new products for children as well as more convenience products which are easy to consume on a go." The future path is not obstacle-free, however, and the company hit the headlines earlier this month when Germany-based retailer dropped Kellogg for trying to pass on rising commodity prices to consumers.