Baking up brilliance: More focus on localised and unique flavours needed to tap enormous APAC bakery growth potential

By Pearly Neo

- Last updated on GMT

More innovative flavour combinations with unique local twists and applications are needed to tap on the enormous potential of the bakery sector in APAC. ©Getty Images
More innovative flavour combinations with unique local twists and applications are needed to tap on the enormous potential of the bakery sector in APAC. ©Getty Images

Related tags Bakery Flavours

More innovative flavour combinations with unique local twists and applications are needed in order for bakery firms to tap on the enormous potential of the sector in APAC, particularly in a time when economic constraints have made consumers more careful in their purchasing.

Bakery products like bread and biscuits are already something of a breakfast staple for many urban consumers in the Asia Pacific region, but according to bakery flavours specialist firm Green House there is much more potential to be unlocked in some of the markets in this region.

“Our data has shown that based on GDP/capita there is still a significant gap to grow in markets like Malaysia, Indonesia, Philippines and Thailand over the next few years, so making our move to enter these markets in a big way over these three years is our main strategy,”​ Malaysia-based Green House Regional Sales Director Michael Yap told FoodNavigator-Asia​ at the Fi Asia 2023 event in Bangkok.

“The annual consumption per capita of bakery in these four markets is currently 4.9kg yearly, but we estimate this to grow to 39kg by 2030, so there is really a big driver to focus here.

“But to tap on this growth and stand out from the pack, it is not enough to just focus on plain old bread and biscuits – consumers today are feeling the strain so are being pickier in their purchasing choices, yet also feeling more adventurous in what they choose to try, so it is important to satisfy both of these needs.

“What we have seen recently is that localised flavours such as pandan coconut, white coffee and durian have been very popular in terms of things like cookies and cakes; as well as more unique, unusual flavours such as pandan curry (nasi lemak) in cookies, playing on these demands.

“There has also been increased interest in East meets West combinations such as chocolate cinnamon, green tea oregano and strawberry basil which is quite different from before; and many consumers want to see these being used in more unique bakery product applications too [from sticks to puffs].”

That said, he added that it is currently challenging in terms of determining the direction of trends for the overall bakery flavours category from a supply chain point of view, as these are ‘not yet clear’​.

“What is not yet clear is whether consumers want their flavours to be from just natural sources, from wholly organic sources, or to just be in line with ESG values, which makes it challenging for us as we need to invest heavily in order to fully conform to any of these areas,”​ Yap said.

“Natural colours and flavours are very high in cost and can be up to three times that of average products, so the take-up especially in ASEAN is still slow at the moment as it is hard to sell products due to the price.

“When the technology improves to the point that costs can come down enough, that is when these will really truly take off and sell well in this region.”

Currency woes

Being based in Malaysia, the firm faces additional challenges when it comes to increasing its exports due to the current instability of the ringgit.

“We do export a lot of our products, but also need to buy in some materials and this is where the currency exchange rate really gets to be a problem – so right now the plan is to follow the big ongoing trends and explore the markets with the most potential,”​ he said.

“We are waiting on the right time, opportunity and clarity where we can fully devote investments in terms of time and manpower, so we will be able to develop strongly in the correct direction.”

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