Childhood obesity set to be driver in Chinese bakery market

By Jane Byrne

- Last updated on GMT

Related tags Baking

Increasing obesity in children in China will stimulate demand for healthier bakery and cereal products, claims Datamonitor in a new report that shows that China ranks fourth in new bakery product launches in the global market in 2009.

Amit Srivastava, market analyst and author of the report, Product Insights: Bakery and Cereals in China, ​argues that the brisk pace of the Chinese bakery and cereals category, with 1,500 new products launched last year, is likely to see it placed among the top three countries by market value in the next few years.

He maintains that this sector will see a lot of action with new companies entering it and global heavyweights fighting it out for a share of the lucrative market.

One of the key trends in the Chinese market, notes Amit, is the growing influence of children in purchasing decisions, particularly when it comes to bakery and confectionery products. He reports that baked goods manufacturers have been increasingly targeting packaging and product promotion activities specifically at this consumer segment.

But the analysts, based in India, stresses that as there is a growing concern over obesity in Chinese​children, “there may be an opportunity to launch healthier products with intuitive packaging that appeals to kids and their parents.”

Amit said that local ingredients that are perceived to be beneficial to health such as longan, tremella and sesame have had applications in baked goods, as consumers are acquainted with their benefits and can quickly embrace products containing them.

And multinational bakery manufacturers, taking a keen interest in the Chinese market in view of the huge potential that exists there, have been launching products aimed at the general populace as well as specific launches for targeting the various economic classes, claims the analyst.

With firms trying to tap into the demand for healthier baked good options, 2009 saw an increase in the number of launches of whole-wheat biscuits, reports Amit.

Moreover, found the analyst, these producers are adapting to local Chinese tastes and offering products in flavours that range from peanut and black sesame seeds to Peking duck and Shanghai crab.

“The key to a successful product launch in China seems to be marrying modernity with tradition rather than pitting one against the other,”​ comments Amit.

Convenience has also been a significant market driver in China, he added, with noted critical shortage of time on account of increased work pressure.

Last month, Datamonitor in a publication focused on the Asian Pacific bakery and cereals market, reported that the category in the region is led by cakes and pastries, which account for 48.5 per cent of market share, followed by bread and rolls and sweet biscuits, with 23.2 per cent and 14.9 per cent take up, respectively.

Crackers such as savoury biscuits, breakfast cereals and other breakfast orientated products constitute the remaining categories with a 7.1 per cent and 4.9 per cent and 1.3 per cent, respectively.

The market researchers predict that the bakery and cereals sector in Asia-Pacific will be worth $68.5bn, with an expected CAGR of 6.4 per cent between 2008 and 2013.

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