GlobalData : Young consumers seek new and innovative variants of bakery and cereals in APAC region, says GlobalData

26 Sep 2019
Young consumers seek new and innovative variants of bakery and cereals in APAC region, says GlobalData Posted in Consumer

Large base of young consumers seeking novel and innovative products is driving the demand for Bakery & Cereals in the Asia-Pacific (APAC) region. These consumers often seek new flavors/variants and are willing to pay extra for experiencing a new taste, according to GlobalData, a leading data and analytics company.

According to the company's report, 'Opportunities in the Asia-Pacific Bakery & Cereals Sector', the region's Bakery & Cereals market is expected to grow at a compound annual growth rate (CAGR) of 5.7% from US$110.4bn in 2018 to US$145.8bn in 2023.

The report reveals that the sector is led by 'Cakes, Pastries & Sweet Pies' and 'Bread & Rolls' categories, accounting for value shares of 32.2% and 25.3%, respectively, in 2018. China and Japan are the leading countries in the region with cumulative value share of 66.4% in 2018 while Vietnam is expected to register the highest CAGR during 2018-2023.

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Besides Vietnam, the report highlights Singapore, China and Australia as the high-potential countries based on the company's unique scoring system, which involves risk-reward analysis of 17 major economies in the APAC region. Among the high potential countries, China is expected to contribute the most to the growth of the Bakery & Cereals sector in the APAC region, accounting for 53.6% share of the overall market growth during 2018-2023.

Kiran Akkineni, Consumer Analyst at GlobalData, says: 'The rising time scarcity anchored by growing dual income households is driving the need for food options that are easy-to-cook and save time. For instance, breakfast cereals do not need elaborate cooking, thus save consumers' time.

'Companies are increasingly launching products with health claims such as 'gluten-free' and 'low fat' to suit the specific health needs of various consumer groups. Furthermore, the availability of these products in single-serve, portable, and easy-to-consume packaging formats is driving adoption among consumers, who increasingly prefer them for 'in-between meals.'

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Although, currently the significance of products with health & wellness benefits is limited (13% share in 2018) in APAC, the market is expected to grow at a CAGR of 6.3% during the outlook period, which is higher than the sector growth, reflecting the increasing demand for products with health & wellness claims.

The APAC Bakery & Cereals sector is fragmented, with Yamazaki Baking Co, Mondelez International, Inc and Britannia as leading companies in the region. Yamazaki, Oreo and Britannia were the popular brands among the respective companies in 2018.

Akkineni concludes: 'Consumers in APAC are increasingly becoming aware of the importance of health while manufacturers are complying with this demand by including healthier and natural ingredients. Furthermore, consumer transition to products which are 'organic', 'clean-label' is expected to pick-up pace in the future.'