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Breakdown
of traditional eating patterns benefits bakery products
- 17 May 2004
Author: Francisco Redruello
Despite
the historical role of bread in a number of culinary cultures, the bakery products
market is generally benefiting from a global trend towards the breakdown of traditional
eating patterns. The
trend towards urbanisation resulted in accelerated consumer lifestyles, increasing
numbers of women in the workforce, the fragmentation of traditional family structures
and an increase in single-occupancy households. Recent new product developments
are indicative of consumer demand for products that ease the effects of increasingly
busy lifestyles and the consequent constraints on food preparation and shopping
time that affect consumers. Development
of premium segment and further segmentation
The
maturity of core developed markets in regions such as North America and Western
Europe has meant growth has been increasingly driven by the development of added-value
products. Euromonitor’s
latest global bakery products report looks at how the commodity status of many
bakery products and the growing presence of private label offerings raised the
importance of manufacturers presenting a distinctive and focused identity for
their brands. Market conditions have appeared to increasingly favour major players
with the resources to develop premium products and support them with extensive
marketing campaigns. Product
segmentation is also starting to play an increasingly important part in manufacturers’
product development strategies, leading to a growing number of products targeting
specific consumer groups such as children, young adults and the elderly. Children
have long been targeted as a specific group, with strategies including the introduction
of child-oriented flavours, tie-ins with movie and television characters and novelty
products, such as biscuits that colour milk when dunked. However,
segmentation in the adult category has come in for more concentrated attention
from manufacturers recently. For example, products with added calcium would be
targeted at elderly consumers in order to reduce the risks of osteoporosis. Development
of bakery products aimed at the health and wellbeing segment
As
well as convenience, product innovation over the review period also reflected
the growing awareness of nutritional issues. In most developed countries, the
trend towards healthier eating, which had been developing concurrently with that
towards indulgence products, persisted throughout 1998-2003. Consequently, the
continuing demand for premium products and the innovation strategies of baked
goods specialists focused on products perceived to be healthy and sophisticated,
such as novelty breads. While
development of low-calorie variants of certain foods has proliferated throughout
the review period, it became evident that the vogue for the low-carbohydrate Dr
Atkins diet has started to influence consumption patterns. Euromonitor reveals
that, despite adverse publicity which has prevailed as the medical profession
disputes a diet that is not balanced and focuses heavily on high protein content
which includes products that are high in saturated fats, it is likely that manufacturers
may consider developing this market niche, as the vogue for the diet shows no
sign of abating. New
packaging formats
Packaging
innovation has also become increasingly important in bakery products, as manufacturers
have sought to adapt to changing eating habits and demographic and social trends.
The increase in snacking has been particularly influential with regard to packaging,
leading to innovations aimed at convenience and portability. The maturing of many
markets has also meant that packaging has become an increasingly significant factor
in generating value sales through the development of added-value products. For
the most part, the companies that saw success in 2002 and 2003 sought to align
their product packaging activities to accommodate busier lifestyles. Successful
packaging strategies included smaller-size packs, new zipper bag technology providing
longer storage life, key-word labelling of products to promote health benefits,
re-branding and the use of comic book and cartoon characters to appeal to children.
Breakfast cereal
manufacturers also looked to promote bowl-with-cereal packs to encourage cereal
consumption out of the home. Euromonitor looks at how these lines of development
are likely to continue in 2004 and beyond with further segmentation prevalent
in packaging solutions. Gradual
but ongoing process of consolidation
Logistical
problems regarding the transportation and storage of perishable goods and deep-rooted
traditions of purchasing artisanal products, resulting from the historic status
of bread as a staple in many national diets around the world, underpin the extremely
fragmented nature of the global bakery products market. However,
the market has experienced a gradual, but ongoing process of consolidation for
a number of years now, and the trend continued in 2002 as the share of global
value sales accounted for by artisanal products declined by a further 0.1 percentage
points to 46.9%. Euromonitor
also reveals that within bakery products, private labels accounted for an increasing
share of global value sales in every area in 2002. The increase was underpinned
by the growing significance of supermarkets in both developed and emerging markets.
Although multiple grocer penetration remained low in many developing markets,
some such as China witnessed a significant rise in sales of private label products,
as their low prices and, increasingly fresh, in-store baking, appealed to consumers. Improved
distribution and multinational penetration in emerging markets
The
major growth markets over the 1998-2003 period were in the developing regions
of Asia-Pacific and Eastern Europe. Common drivers shared by such developing markets:
growth from a low base, increased urbanisation, higher disposable incomes, growing
influence of Western culture and diet, more working women, longer working hours,
more liberal economic policies and the spread of manufacturing and distribution
networks and growing penetration of storage technology. The
newly published global report also reveals that the development of retail systems
within Asia-Pacific are set to bring consumers into contact with a growing variety
of bakery products. Moreover, manufacturers are expected to invest in the expansion
of distribution to the region’s vast and significant rural areas, as urban
markets become increasingly mature. Developing retail networks and deepening multinational
penetration are also predicted to be significant factors in spurring strong volume
and value growth in the emerging regions of Africa and the Middle East and Latin
America. | 
