Fast-Paced Lifestyle and Changing Consumption Patterns Driving the Baking Ingredients Market

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Baking ingredients are used in the manufacturing of bakery products, such as bread, cookies, cakes, pizza, tarts & pies, pastries, donuts, and frozen bakery products. Baking ingredients improve the quality of products and enhance their shelf life. They also improve the functional and physiological properties of baked products. The rise in the consumption of bakery and confectionery products across the globe is driving the market for bakery ingredients.

Increase in demand for and consumption of bakery and confectionery products driving the baking ingredients market

With the rising demand for convenience food and consumer preference for attractive, tasty & textured delicacies, the demand for confectionery and bakery products is steadily increasing. Other factors affecting the sustenance of bakery products in the modern market are their easy accessibility, lower price, and nutritional content. For many consumers, bakery products have become essential to their diets. This has bolstered the demand for various baking ingredients used to make bakery products rich in taste and texture.

Due to the increasing number of hypermarkets and supermarkets selling freshly baked and frozen bakery items, there has been an increase in the consumption of bakery and confectionery items. In addition, the rising number of home bakers owning small or medium-sized businesses in developing countries has increased the utilization of baking ingredients.

In India, for example, baking entrepreneurship has seen a big boom in the past few years. According to the American Bakers Association, bakery products make up about 2.1 percent of the gross domestic product in the US. This is because of the high consumption of bread in the country. The bakery industry in America employs nearly 800,000 skilled individuals across its 50 states and has a total economic impact of USD 153 billion.

PER CAPITA CONSUMPTION OF BAKED PRODUCTS FOR KEY COUNTRIES, 2020 (KG PER YEAR)

Fast-paced lifestyle of consumers and changing consumption patterns

Due to the fast-paced lifestyle of consumers, there has been a radical shift in food consumption patterns. Many people now prefer convenience foods as a result of their hectic schedules.

According to a report published by the USDA, one of the major factors encouraging the demand for convenience foods is the declining market prices of processed foods compared to their less-processed counterparts. The other factor driving customers’ preference toward convenience foods could be increased purchasing power over the past few years.

According to MarketsandMarkets analysis, the global market for baking ingredients is projected to reach USD 22.2 billion by 2026, recording a CAGR of 6.0 percent.

The market’s overall growth can largely be attributed to the need to improve product appeal, which is expected to provide new revenue pockets for baking ingredients. Europe dominated the baking ingredients market in 2020. This can be attributed to the rising trend of convenience foods influencing customer preferences for baked products in the region.

ATTRACTIVE OPPORTUNITIES IN THE BAKING INGREDIENTS MARKET

Source: Expert Interviews, Government Authorities, Related Research Publications, Government Publications, and MarketsandMarkets Analysis

Impact of COVID-19 on the bakery ingredients industry

The outbreak of COVID-19 has brought serious medical, social, and economic challenges. While the medical community is focused on developing successful diagnostic and medical treatments, the baking industry focuses on manufacturing healthy products using baking ingredients. Due to the emergence of the pandemic in various regions, the global baking ingredients market witnessed a decline in 2020. This can be further attributed to lockdowns in various countries, closure of international borders, and delay in cross-border transit, leading to supply chain hindrances. Also, the social distancing measures taken by the regional governments have limited the number of people working together in proximity, hampering the logistic chain.

Europe dominated the market in 2020 and is expected to show similar trends in the coming years

Europe accounted for a significant share of the baking ingredients market in 2020. The region remains an important baking ingredient company market due to its size and favorable regulatory environment. Other factors boosting the growth of the baking ingredients market in the region include increased consumption of baked goods, especially as convenient food products, and awareness of people about natural baking ingredients, such as yeast extracts, enzymes, and fiber. Thus, Europe can be considered a mature market.

Key players to expand their geographical presence through new product launches, acquisitions, and expansions

The market for bakery ingredients is fragmented due to the presence of many players in the market. These players adopt collaborations and new product launches as their key strategies to achieve a global presence and cater to the needs of their customers.

For instance, Koninklijke DSM N.V. (Netherlands) launched two new solutions, BakeZyme Fresh XL and BakeZyme Master, to address the freshness challenges faced by bakers worldwide. These new maltogenic amylase solutions would enable the production of high-quality baked goods. Similarly, in November 2020, the Taste & Nutrition subsidiary of Kerry Group Plc (Ireland) announced that it had reached an agreement to acquire the Canadian company Bio-K Plus International (Canada). This acquisition would expand Kerry’s portfolio of probiotics.

The key players have been undertaking these strategies to leverage their strengths and develop better products. These developments will positively impact the baking ingredients market in the next few years.

Some of the most common strategies adopted by these players include acquisitions, mergers, and expansions.

BAKING INGREDIENTS MARKET: KEY DEALS, 2019-2020

YEAR-MONTH	DEAL TYPE	COMPANY 1	DESCRIPTION
2020-Nov	Agreement	Kerry Group Plc	The Taste & Nutrition subsidiary of Kerry announced that it had reached an agreement to acquire the Canadian company Bio-K Plus International. This acquisition would expand Kerry’s portfolio of probiotics.
2020-Jun	Partnership	Tate & Lyle	Tate & Lyle and Solevo, a leading distributor of chemicals and inputs for specific industrial and agricultural segments in Africa, announced a new distribution partnership. Solevo has become the exclusive distributor of Tate & Lyle’s ingredients in West African countries, including the Ivory Coast, Senegal, and Cameroon.
2019-Jan	Partnership	Lallemand	The ownership of Ohly’s yeast production site in Hutchinson, WI (US), was transferred to Lallemand, with a long-term supply agreement. This has helped the company improve its production capacity.