The consumption of baked goods continues to slowly rise across the world.

KANSAS CITY — The future remains solid for the baking industry, according to European and Asia-Pacific reports on the bakery and cereals sectors published by GlobalData in June 2017. For the period from 2016 to 2021, sales in North America are expected to rise 1.9% CAGR in volume growth. That compares with 1.2% for Western Europe, 2.8% for Eastern Europe, 3.2% for Latin America and 6.2% for the Asia-Pacific region.

But just a word of caution on percentage growth: The baselines are very different. When it comes to per ¬capita consumption of baked goods and cereal in 2016, Eastern Europe leads with 87 kg followed by Western Europe (74.8), North America (46.9), Latin America (42.0) and Asia-Pacific (5.9). China may be large and significantly growing, but sales in the rest of the Asia-Pacific region is a fraction of baked goods and cereal consumption in other parts of the world, noted Tom Vierhile, innovation insights director, GlobalData.

Bars are driving bakery purchases in Western Europe.

Cereal bars are the fastest-growing dollar and volume category among bakery and cereal products in Western Europe. The market is expected to grow at 4.6% CAGR for the 2016-21 period. Bread and rolls are the slowest performers at an expected 1.8% CAGR during this time frame. In Asia-Pacific, the cakes, pastries and sweet pies market is projected to surge 7.7% CAGR, with China leading the growth, according to GlobalData.

China leading the path
 “I’ve seen firsthand how eating habits are changing year after year,” said Don Osborne, chair, BEMA, who has spent a lot of time working in Asia’s largest country and recognizes its potential for expansion in the baking industry.

At BEMA’s Summit in February he told attendees, “The baking industry in China is the fastest-growing market in the world.”

Cakes and pastries are popular baked goods in China.

Mr. Osborne’s statement was also confirmed by Brianna Peterson, innovation consultant, Euromonitor International, during a presentation documenting how China’s bakery market has grown with a 13.3% CAGR during the past five years.

China now has the second-largest baked goods segment with retail sales valued at $28.5 billion in 2017, behind the U.S. at $56.8 billion. However, the U.S. market grew at just 2% CAGR over the past five years, and Euromonitor speculated that China may catch up by 2022. 

“I think they have all of that runway to come up to that $56.8 billion in the U.S.,” Ms. Peterson said. “The growth in China is vastly outpacing that of the U.S.”

Cakes and pastries are driving the growth in China. Cakes account for 44% of sales followed by 38% for pastries and 18% for bread. Despite new Western product availability, local favorites are extremely popular, especially Chinese cake and pastries that are deep-fried or steamed.

In China, untapped oppurtunites are abound for bread makers.

Overall, the Chinese market is highly fragmented and regionalized. In fact, the top 12 players account for only 15% of bakery sales. No one company has more than a 4.6% share of the market.

That said, Ms. Peterson noted there is a big future for growth in the Chinese baking industry. While sweet goods are fueling sales, bread sold alone is a foreign concept. Many Chinese consumers don’t understand how to prepare a sandwich at home. Then again, Chinese consumers are embracing bread, buns and rolls as a part of the expanding quick-serve restaurant industry and surging the on-the-go foodservice sandwich market.

Sandwiches boosting bread sales 
Meanwhile in Europe, breads and rolls used as a “carrier” in sandwiches slightly boosted baked goods’ consumption in this mature market. In fact, the number of Europeans who visited bakery shops rose -slightly — about 1.4% — in 2017, according to The NPD Group.

France led Europe in the number of bakery visits. About one-quarter of commercial restaurant visits were to bakeries, followed by Germany (15%), Great Britain (11%) and Italy (6%), according to Maria Bertoch, food service industry expert for NPD. Ms. Bertoch talked about “Trends and Growth of European Bakeries” during Europain, which was held recently in Paris.

“One in four visits are to a bakery or sandwich store,” Ms. Bertoch noted of French eating away-from-home habits from the firm’s Crest consumer data. “That’s an incredible amount of consumption in this mature market.”

In France, she added, snacking, especially in the late afternoon, is driving the number of visits to boulangeries and sandwich shops. “People want a pastry or croissant around 4 p.m.,” she said.

As far as time of day, an increasing number of people are shopping at a boulangerie for breakfast. While visiting bakeries in the afternoon rose slightly, few French consumers stop at bake shops for dinner. “The evening niche is not a high opportunity for bakeries,” Ms. Bertoch said.

Sandwich consumption in Europe boosted bread sales.

She added that bakeries are quite popular among millennials because they offer traditional, high-quality fare at an affordable price.

An emerging trend involves “click and collect,” where consumers order sandwiches or meals online and then pick them up at a nearby bakery or café. Ms. Bertoch said it’s most popular in Great Britain, where many time-pressed workers only get 30 minutes for lunch. She called France an “untapped market” because only about 3% of the population orders online. Meanwhile in the U.S., ordering meals online is perhaps the most advanced in the world.

“Digital will probably be an even bigger revolution in the future,” she said.