Three major factors have been identified as having a significant impact on the state of the global cakes and pastries market.
New data gathered by Technavio analysts has revealed that the global cakes and pastries market is poised for growth over the next few years. According to their latest report, the global cakes and pastries market is expected to reach $60 billion by 2020, growing at a CAGR of almost 4% from 2016-2020.
According to Vijay Sarathi, lead research analyst at Technavio for food research, “The market’s growth is likely to be supported by product developments and flavor extensions in categories such as frozen pies, cake rolls and pound cakes, among others. In addition, the rising consumer focus on quality ingredients has led to the introduction of healthier products.”
Technavio’s lead food and beverage market research analysts have identified the following three factors that will drive the global cakes and pastries market:
- Rising urbanization and demand from millennials
- Innovations in the bakery market
- Rise of the supermarket in-store bakery
Rising urbanization and demand from millennials
Urbanization and rising disposable incomes have resulted in greater purchasing power. The working population in big cities prefers on-the-go foods, such as pastries, cake snacks and sweet pies, among others. Globally, 54% of the population lives in urban areas, and this is expected to increase in the coming years.
Also, the rising millennial population is demanding more on-the-go food options. Millennials constituted the largest workforce demographic in the U.S. and accounted for $1.3 trillion in direct annual consumer spending in 2015, which will grow as their annual income reaches $8.3 trillion by 2025 in the U.S.
Innovations in the bakery market
Due to the increasing demand for bakery products suited for specific dietary needs, such as gluten-free, innovation becomes an important driver. Functional ingredients are being used to enhance the products and make them healthier. Increasing innovation is apparent in the Canadian bakery market. Products containing flours other than wheat (rice flour, chia flour, etc.) have been launched in recent years.
Numerous products have been launched over the past couple of years, most of them with claims of being kosher or organic. Throughout the 2006-2012 period, kosher was the most popular claim, appearing on 1,724 products. Organic cakes have also gained in popularity.
“The organic claim was the most common one within the baking, confectionery, and sweet desserts segment, including cakes, pastries, sweet goods, sweet biscuits and cookies and frozen desserts,” said Vijay.
Rise of the supermarket in-store bakery
In-store bakeries are found in grocery stores and are relatively small but offer a substantial range of fresh baked products, with increasing amounts of whole-grain breads being produced. Artisanal and industrial bakeries have had to contend with rising competition from the growing number of in-store supermarket bakeries that have their own offerings with competitive pricing. In-store bakeries are gaining in prominence due to their lower prices and the convenience of one-stop shopping.
Value-conscious customers are increasingly opting for the private-label offerings of supermarkets. In recent years, the parbaked, pre-baked and bake-off ranges of products are increasingly making a mark. This is done with a view to save costs on training bakers and also to maintain product quality and consistency across outlets. Freezing increases the shelf-life of the product and also helps retain the texture of crumbs. These cakes are an easy way to offer consumers the option to bake fresh cakes with little time and effort.