Healthy cereals fuelling Asia Pacific baked goods sector growth

The bakery and cereals sector in Asia-Pacific will be worth $68.5bn, with an expected CAGR of 6.4 per cent between 2008 and 2013 according to the market researchers.

Nikhil Aggarwal, senior consumer goods analyst at Datamonitor notes that increased urbanization, rising levels of disposable incomes, exposure to Western culture dietary habits are some of the reasons for buoyance in the category.

“An affinity for healthy offerings is a key trend that reflects global consumer packaged goods (CPG) sentiments, and the bakery and cereals segment in Asia-Pacific is no exception,”​ continued the analysts, who is based in India.​

The bakery and cereals market in Asia Pacific, reports Datamonitor, is led by cakes and pastries, which represent 48.5 per cent of the segment, followed by bread and rolls and sweet biscuits, with 23.2 per cent and 14.9 per cent market share, respectively.

Crackers such as savory biscuits, breakfast cereals and morning goods constitute the remaining categories with a 7.1 per cent, 4.9 per cent and 1.3 per cent market share, respectively.

The breakfast cereals category is expected to achieve sales worth $2.8b this year, representing a year on year growth of 6.3 per cent over 2009.

“The appeal of convenience as well as the overwhelming demand for healthy alternatives is expected to drive sales within the breakfast cereals category, specifically the ready-to-eat variety,”​ comments Aggarwal.

Furthermore, the developing organized retail system within the Asia-Pacific region will increase both product visibility and availability, which is expected to act as a growth stimulus.

“As urban markets reach high penetration levels, companies are expected to dedicate significant resources into expanding distribution networks to reach large, lucrative, yet untapped rural markets,”​ said the analysts.

Indeed, Datamonitor’s Recovery from Recession (RfR) service, which tracks global consumer spending intentions on a monthly basis, found that the majority of consumers in the Asia-Pacific will continue to spend on baked goods and cereals.

In April 2010 for example, the market researchers note, 68 per cent of Australian consumers reported they would be maintaining their level of expenditure on cereals – considerably higher than the proportion who said the same about confectionery - 45 per cent.

In China, 56 per cent of consumers said they would maintain cereal spend, while a substantial minority of 11 per cent said they would actually be increasing their expenditure in this category, reflecting the potential of such products in the Asia Pacific region.