Blog

The Baking Industry in China

Chinese baking’s industry will soon reach a maturity stage in the country with a large volume of manufacturers who are all competing for the market share. Rapid urbanization, changing food habits and increase in the middle-class income are key factors in making baking products popular in China. The industry has seen a rapid growth, with current value sales increase by 15% in 2012 reaching 110 billion RMB. Since 2013, pastries and cakes represent a vast majority of the baked products market and this trend will still rise, especially with well-supplied, well-decorated, and high-priced dessert shops popping up recently in China’s upper-tier cities. And artisanal cakes and pastries, are also expected to see a fastest value growth of 16% on average, per year.

History and Forecast of Baking consumption volumes

The Chinese consumers are becoming more selective and are more likely to seek out quality baking products and, indeed, many supermarkets and famous international bakery chains are more and more popular among Chinese consumers with the rise in Bread consumption from 0.7 Kg per capita in 2007 to 1.3 Kg in 2014. Also, stricter food regulations imposed by the government regarding the penetrability of imported ingredients has increased the demand for Quality, even more after the numerous food scandals in the country. Chinese consumers are looking for products that meet their specific requirements. These prerequisites are caused to Chinese consumer’s life stage, indeed, young single consumers and young couples are looking for smaller pack sizes and consumers with older children are, therefore, looking for larger family cakes packs to share with the family. Bakeries have become a major sales channel, especially for Cakes & Pastries, Bread & Rolls, and Morning Goods in China, owing to their greater proximity to consumers and delivering quality products that are varied and fresh. Nevertheless, Chinese consumers still prefer hypermarket & supermarkets for buying their cereals and cookies. busy lifestyles in urban centers have reduced the time available to prepare food, prompting many consumers across the Chinese region to adopt cakes and pastries as snacks.

The total population of China has reached 1.4 billion in 2015, with 775 million living in urban areas. Increased westernized lifestyles among these consumers in recent years has seen a growing attractiveness for Cakes & pastries as traditional dessert alternatives. In 2014, 17% of baking & Cereal consumption by value was motivated by the desire to have new experiences, and this type of behavior is expected to become more and more famous among Chinese consumers. With the rapid aging of Chinese people, companies face the challenge of targeting middle-aged costumers, adapting to their specific nutritional needs and different consumption habits, who are increasingly turning into western food lifestyles and habits. Young and urban consumers will continue to look out for tasty and fun products and those that help them to relax, leading to the increase of baking products like Cakes & Pastries in the country. Growing consumption of baking products in China will improve demand for all packaging materials between 2016 and 2018.

China’s demand for baking Products has grown at a fast pace in the past decade. In future, both production and demand will continue to grow. The Chinese economy has maintained a high-speed growth, stimulated by the consecutive increases of industrial output, import & export, consumer consumption and capital investment for over two decades.

The Baking consumption trends in China

Considering consumer trends in China’s baking market provides an overview of the market analysis. With an overview of the market data demographic patterns and the key consumer trends driving consumption. The new product development that effectively targets the most relevant consumer need states and offers strategic recommendations to capitalize on evolving consumer landscapes. China’s bakery market is the largest market worldwide by volume

– Quality is the primary driver of the bakery market motivating over two-fifth of consumption

– Chinese consumers select baking based on their ability to meet life stage related needs.

The bakery market faces a major problem; considering market extension and segmentation are valuable, but the keys to effectual targeting are knowing just like valuable specific consumer groups are, and being able to measure the impact of consumer trends. As China is submitted to a rapid development and population dynamics, who start to take effect, being able to capitalize early on the new emerging consumer behaviors will be fundamental to future growth. Making the identification of the consumer groups and trends driving market behavior essential, because the consumption of products and the influence of consumer trends are fundamental causes of change in markets.

If you enjoy reading this article and would like to know more about China’s market, contact us at dx@daxueconsulting.com!

Our report on baked goods in China: