Population changes present several challenges for the baking industry.

When it comes to demographics, the key word beginning with the letter “M” should be “multicultural.” The ever-increasing diversity in today’s world creates ever-new challenges and opportunities.

“We have never been more different than we are today in terms of our population,” Told Hale, retail insights thought leader and former senior vice-president, consumer and shopper insights, Nielsen, noted in Baking & Snack’s October issue.

Between 2010 and 2025, the proportion of the white population in the United States will decrease to 58% from 64%. Meanwhile, the Hispanic population will grow to 20% from 16%, and black and Asian population percentages will rise to 13% and 6%, respectively. And each successive generation in the United States will become more multicultural.

According to Nielsen, the Gen Next population, defined as children under the age of 19, is already reaching the 46-to-51% multicultural level, meaning half of them are an ethnicity other than white, non-Hispanic. That’s compared to just 24%-to-30% multicultural population in the baby boomer generation, ages 50 to 69.

These population changes present several challenges for the baking industry. For example, snack cakes maintained average sales in white and black households. However, that may change as the white population continues to shrink. Meanwhile, snack cakes are performing well below average in Asian and Hispanic households.

Mr. Hale cautioned snack cakes producers that are underperforming in these growing segments will need to watch this trend closely.

“If you fast-forward, if demand among these groups doesn’t change as we move ahead over time, then it’s going to have a negative impact on some bread and other baked good categories because of underdevelopment of sales today,” Mr. Hale pointed out.