Opportunities in the Global Bakery Industry

10 June 202210 min reading

“The bread manufacturers are leveraging the acceptance of regional bread specialties to create value-added products, in order to diversify their assortments. Fortified, clean label, and organic bread are the preferred bread categories across the world, with the rise in health conscious consumers.”

The bread and bakery products market consists of sales of bread and bakery products by entities that produce bread and bakery products. The companies in the bread and bakery products industry process flour into bread and bakery products not for immediate consumption on the premises, and package and distribute them through various distribution channels to both individual customers and commercial establishments.

The main types of bread and bakery products are bread, cake and pastries, other bread and bakery product. Bread is a basic food made from flour and water dough that is baked. The different origins include whole wheat flour, multigrain flour and are distributed through various channels such as supermarkets/hypermarkets, convenience stores, e-commerce, and others.

According to the data of The Business Research Company the global bread and bakery products market size is expected to grow from $208.19 billion in 2021 to $228.41 billion in 2022 at a compound annual growth rate (CAGR) of 9.7%. The global bread and bakery market size is expected to grow to $315.63 billion in 2026 at a CAGR of 8.4%.

The world population is growing and is expected to reach 10 billion by 2050. An increase in population creates more demand for food. Supply for material used in bread and bakery product manufacturing and trade volumes will have to increase in order to meet the increased population. Therefore, companies in this market are expected to benefit from rising demand for bakery & confectionery products due to the rising population, during the forecast period.

The outbreak of the Coronavirus disease (COVID-19) has acted as a massive restraint on the bread and bakery product manufacturing market in 2020 as supply chains were disrupted due to trade restrictions and consumption declined due to lockdowns imposed by governments globally. COVID-19 is an infectious disease with flu-like symptoms including fever, cough, and difficulty in breathing. The virus was first identified in 2019 in Wuhan, Hubei province of the People’s Republic of China, and spread globally including Western Europe, North America, and Asia. Food and beverage manufacturers depend on the supply of raw materials from domestic and international suppliers. As many governments restricted the movement of goods across countries and locally, manufacturers had to halt production due to a lack of raw materials. Also, restrictions on the trade of non-essential goods and fear of contamination through manufacturing facilities contributed to the decline. The outbreak had a negative impact on businesses throughout 2020 and into 2021. However, it is expected that the bread and bakery product manufacturing market will recover from the shock across the forecast period as it is a 'black swan' event and not related to ongoing or fundamental weaknesses in the market or the global economy

Bread and bakery product manufacturers are increasingly depending on social media to market their products. As more consumers share their dining experiences on social media websites such as Instagram, Pinterest, and Facebook, bread, and bakery product manufacturers are creating innovative and artistic bakery products to gain popularity. According to a study, 69% of millennials take a photograph or video of their food before eating.

Major companies in the bread and bakery products market include Grupo Bimbo, S.A.B. de C.V., Wm Morrison Supermarkets plc, Bimbo Bakeries USA, Yamazaki Baking Co. Ltd, Flowers Foods Inc., ARYZTA AG, Barilla Group, Harry-Brot GmbH, George Weston Ltd, and McKee Foods Corporation.

Asia Pacific was the largest region in the bread and bakery products market in 2021. North America was the second-largest region in the bread and bakery products market. The regions covered in the global bread and bakery products market report include Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The global bread market is expected to reach a CAGR of 3.12% during the forecast period. The COVID-19 pandemic had an unprecedented impact on the bread market in the region, as its ramification on sales led to lower volumes, with other problems including supply-side issues linked to quality and certification. Bread products have had most of their sales in the region through convenience stores and specialty outlets. Due to lockdown, an increasing number of supermarket remained closed for an extended period of time, resulting in lower volume consumption of bread. But it could regain its sales through retail stores which remained opened amid covid.

There has been an increasing demand for greater variety of bread with ethnic breads and greater varieties of whole-meal breads, like oats, bran, seeds, etc. Baked goods, such as bread and biscuits, continue to enjoy the status as household staples, and their sales are driven by the fact that they constitute an essential diet of the time poor consumers.