Consumer preferences are constantly changing, with new ingredients, diets, and lifestyles influencing what types of products people expect from the global baked goods industry. Many continue to seek out healthier takes on their favorite baked goods, either in terms of ingredients or portion size. The shorter the ingredient list the better, with bonus points for reduced quantities of fat and sugar. Consumers are also looking for new flavors in familiar products. Throw the impact of COVID-19 into the mix, and bakery companies have many different factors to consider when producing and selling their products.
What’s in store for the global baked goods industry?
The baked goods industry can expect accelerating growth over the next 5 years, with a predicted $116 billion increase in value during that time. APAC will account for a third of that growth, with China and Japan being key markets, but demand is also rising in North America and Europe. While the COVID-19 pandemic has introduced new challenges and complexity in terms of supply chain risk and social distancing requirements, it has also boosted demand for baked goods and other consumer staples. Buyers are increasing their consumption of comfort foods during this time, making bakery items a popular choice for snacks, desserts, or even meals.
Producing healthy baked goods without sacrificing flavor
While consumers continue to seek out health-conscious bakery products, taste remains an essential factor for success. Food that is healthy but less enjoyable than its traditional counterparts will have a harder time selling, especially in a category that is typically viewed as a treat. Bakers therefore need to make their recipes healthy without sacrificing taste.
Some baked goods manufacturers are incorporating trendy health foods and nutrition supplements into their food, such as ancient grains, seeds, and pulses. These ingredients let customers indulge in treats while still eating nutritionally beneficial food. Another way to appeal to the health-conscious crowd is to have products with ingredient lists that are short and contain mostly or exclusively recognizable components. “All natural” foods that avoid preservatives and utilize organic ingredients continue to be popular, with buyers being more likely to accept fats and sugars if they aren’t perceived to be overly processed.
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Finally, size is also a factor for individuals looking to enjoy a treat while still being healthy. Small treats have been popular for some time now, and this trend is picking up speed in the baked goods industry, with mini muffins, cinnamon rolls, and other goods becoming increasingly popular. These items may contain the same ingredients as their larger counterparts, but consumers will still view them as a healthier option as they allow for better portion control.
Spicing up old favorites with new flavors in the bakery industry
North American consumers are also looking for new twists on familiar baked goods, with ingredients from Eastern European and Asian countries being particularly popular right now. Japanese flavors such as yuzu (a popular citrus fruit), sesame, matcha, and shiso (a herb from the mint family) are being used with increasing frequency, and can provide a mix of the familiar and novel for North American fans of baked goods.
Experts predict that tropical fruits and other flavors from around the world will pick up in popularity, including passionfruit, mango, and bergamot, while botanicals and florals such as hibiscus, lavender, and rose are also starting to take the spotlight. Experimenting with these ingredients can help capture a wider audience, and renew consumer interest in familiar baked goods by adding an unfamiliar twist.
This isn’t to say that old favorites need to go, however. Staple flavors such as chocolate, vanilla, lemon, strawberry, and caramel are still highly popular, either on their own or paired with less familiar ingredients. While a little over half of consumers enjoy flavors from other parts of the world, that still leaves more than 40% of the market that would prefer to stick with the classics. It’s important to cater to both demographics when developing bakery products.
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Adapting to COVID-19 in the baked goods industry
Along with these opportunities for new flavors and healthy recipes, 2020 of course brings challenges to the bakery products market as well. The COVID-19 pandemic has forced bakeries to adapt both production and sales practices to account for social distancing and increased sanitation practices. While the coronavirus has also brought higher demand for baked goods, that itself creates additional challenges, as baked goods companies need to meet this demand while maintaining safe environments for staff and customers. It is important to maximize the use of both time and space when it comes to scheduling workers, preparing ingredients and proving dough, baking, and getting products into the hands of customers.
Discover more about opportunities, challenges, and trends in the global baked goods industry with Technavio’s market research report, which includes insights such as:
- CAGR of the market during the forecast period 2020-2024
- Detailed information on factors that will drive bakery market growth during the next five years
- Precise estimation of the bakery market size and its contribution to the parent market
- Accurate predictions on upcoming trends and changes in consumer behavior
- The growth of the bakery market industry across APAC, Europe, MEA, North America, and South America
- A thorough analysis of the market’s competitive landscape and detailed information on vendors
- Comprehensive details of factors that will challenge the growth of bakery market vendors