Bread and bakery products have become daily indispensable for many people, particularly students and busy workers.
Growth is also being fuelled by an ongoing rise in disposable income levels, particularly in urban areas.
Dynamic and fast-moving
According Wendy Barth, VP of Marketing and R&D, Asia Pacific region for Rich Products Corporation, the Chinese bakery industry is an intensely dynamic market and fast-moving.
“If something is in fashion this year, you can count on it being different next year, so it really challenges us to stay ahead of the curve and keep thinking of those new ideas to help our customers,” said Barth.
Competition is fierce, but “with a population of 1.3 billion, even finding a niche in China is lucrative,” she added.
Rich’s is a family-owned $3.5bn global company based in Buffalo, New York, US that has had a footprint in Asia for 25 years.
“The core of what we do is cream solutions, toppings and icings, but we have a broad range of products thought the world; all B2B – focussing on bakeries and food service operators – and working closely with our customers with what we call The Rich Experience to develop their products,” said Barth.
The company was exhibiting at the massively successful Bakery China, held in Shanghai last month.
She said Rich’s business in Asia is the largest outside North America with China being the biggest market outside of the US.
“China, for the past 10 years, has been on a huge rapid trajectory forward, but in the past couple of years, we’ve seen a lot of growth in Vietnam, India, and even Thailand and Korea,” she added.
With small operators constantly popping up and the mom-and-pop outlets coalescing from one to multiple stores, the Chinese bakery market is highly competitive and fast moving.
Artisanal players dominate the sector and accounted for 73% retail value share in 2014.
The growing popularity of dairy
Talking trends, diary is the hottest ticket in town, according to Barth.
“We’ve seen the emergence of the trend in the past 5-7 years. A decade ago, there wasn’t a lot of diary here, but now there’s a ton not only imported from Australia, New Zealand and Europe, but also locally produced.
“People are really consuming more diary. It started with kids and infant formula and now is moving up the line,” said Barth, noting Rich’s has capitalized on the trend with toppings for cakes.
“We’ve traditionally been a non-dairy company, but today [dairy makes up] a much broader range here than anywhere else in the world… not only non-dairy, but dairy blends and also 100% dairy products that we import from our joint venture partner in France.”