Maadico

iba

iba

September 4th, 2020
Timing
Location on map

The bakery industry is a huge business that caters to people’s weaknesses for tasty breads, cakes, pies and sweet rolls. According to the American Baker’s Association, bakery products make up 2.1 percent of the gross domestic product of the United States. That’s a lot of people eating bread.

The high level of maturity achieved by the $339 billion global baking industry over the past five years is disguising the major growth opportunities associated with three trends – health, indulgence and convenience – which are driving the sector. Whilst consumers globally are demanding convenience, the health trend in developed markets has weakened demand for certain bakery products such as white bread whilst creating a fast-growing market for innovative products with higher nutritional content. In Asia, indulgence is leading to growth in baked goods and pastries in particular.

The baking industry generates more than $30 billion in revenue each year. The industry includes 6,000 retail bakeries and nearly 3,000 commercial bakeries. While the market of small bakery retailers is highly fragmented, three producers (Grupo Bimbo, Flowers Foods and Campbell Soup Co.) account for 55 percent of total commercial bakery revenue.

Annual sales of gluten-free bakery products are worth around $1.4 billion and are forecast to grow by over 7 percent annually over the next five years. Established manufacturers including George Weston (Canada), Molinos de la Plata (Argentina), Warburtons (UK) and General Mills (US) have successfully launched gluten-free products. They are competing against innovative specialist brands such as Genius Foods, which has a 50 percent market share in the UK and which is expanding into France, Spain and Australia, and Dr. Schär, one of the European leaders in gluten-free food. Organic bakery products are enjoying significant growth as well; organic bread in North America, for example, is forecast to grow by more than 27 percent between 2014 and 2019. This segment is becoming so popular that more markets are using sophisticated marketing strategies such as developing products aimed at children and teenagers. For example, Quality Food Group, one of the most prominent Italian bakery companies, has recently introduced Violetta Bio Snack, organic crackers using the license of the popular TV show Violetta.

The American Bakers Association reports the economic impact of baked goods produced and sold in the U.S. totals $423 billion. Retail bakeries generate around $3 billion in revenues, and commercial bakeries sell $31 billion in products. However, profits are not particularly high because of the rising costs of wheat and sugar. Bakeries are not always able to pass on these increased costs to consumers by raising prices.

Sixty-five percent of all bakeries have less than 10 employees; 44 percent have one to four employees, and most small retailers only have one facility. All in all, the baking industry employs nearly 800,000 people, generating more than $44 billion in direct wages.

Becoming a major commercial bakery takes a large amount of capital to purchase equipment, and you’d face stiff competition from the existing well-known brands. Opening a small, retail bakery requires less equity and is easier to start. Smaller bakeries can establish themselves with specialty products, such as whole-grain breads, and develop a loyal following of local customers.

The market for baked goods is expected to grow around 1 percent per annum in the coming decade. Consumption is affected by changes in disposable income, consumer preferences and economic conditions.

Large commercial bakeries will continue to dominate the competition in the market, because the other firms are small and the market is highly fragmented. The major commercial bakeries, such as Grupo Bimbo, will continue to grow by acquiring other brands and regional bakeries.

In the mature US and European bakery markets, the fastest-growing brands are those specializing in healthier baked goods using high quality ingredients and which meet demand for innovation in ‘free-from’ and for food ‘on-the-go’. Large corporates are changing their products to match these trends and using acquisitions to access market leaders and accelerate growth in market share.

Rising disposable income, urbanisation and the demand for western-style diets are supporting the growth in sales of baked goods and pastries in particular. China is set to become the second largest baked goods market globally by 2020 with pastries the most popular segment. These markets are attractive to major corporates which see the potential for significant sales growth.

Major emerging markets bakery manufacturers and brand owners which dominate their domestic markets are making strategic acquisitions of the market leaders, and often iconic brands, in more mature and sophisticated markets. Acquiring these brands enables diversification and gives these players access to stable cash flows and further growth opportunities.

Acquisitions are being driven by the strategic need to access new markets, widen product range or increase market share by targeting leading domestic brands. This is leading to an increase in cross-border deals, see Figure 4. Major emerging markets players have been responsible for the largest deals in the sector. Often owners of the leading brands in their domestic markets with a dominant market share, they are looking for diversification and growth prospects by targeting the market leaders (and typically iconic brands) in sophisticated and mature but stable markets.

iba is the global meeting point for baking industry professionals. The unique setting with top rated experts since 1949, it has been the platform for innovations and provides a complete overview of all novelties on the market.

Iba is the leading international trade fair for bakery, confectionery and snacks, which takes place every three years in Munich. It is the international meeting point for bakers, pastry chefs, restaurateurs, café owners and grocery retailers as well as for hotel professionals and caterers.

The most successful companies from artisan bakeries, via wholesale bakeries, through to the industrial solution meet up here. iba is the international meeting place for bakers, pastry chefs, restaurateurs, café owners, hotel professionals, and caterers as well as decision makers from the food retail market.

Exhibitors value iba because it provides the perfect opportunity to gain an overall picture of developments in the industry and to present their company and products to an international specialist audience.

Whilst manufacturers are appealing to consumers in North America and Western Europe with healthier product ranges, consumers in Asia and the Middle East have an increasing appetite for indulgence. Asia Pacific boasts the highest pastry sales globally and accounts for the majority of global growth within pastries.

Source:

https://www.iba.de/

Note:

The images and text displayed above are under the copyright law and authority of the holder of the event and image and will not be used for any marketing, financial and profiteering of any kind. The Goal of these articles are merely further publicity

How Maadico Helps its clients in Professional Exhibitions?