Frost & Sullivan attended the 24th China International Baking Exhibition and released 'Analysis of the Current Situation and Future Trends of the Chinese Baking Market in the Post-Pandemic Era'

The report provides an in-depth interpretation from four perspectives: an overview of the baking industry, operational performance of baking enterprises, research and development analysis of baking enterprises, and consumer insights, exploring industry changes, channel potential, consumer concerns, and market opportunities under current circumstances, providing professional data and guidance for baking enterprises to innovate and upgrade, transform towards low carbon, expand markets, and conduct digital marketing.

According to Zhang Jianjian, in 2020, the retail sales volume of the Chinese baking market reached approximately 250 billion yuan, and in 2021 it reached about 280 billion yuan, with great growth potential in the future. In recent years, the continuous improvement of urbanization rates, disposable income, and purchasing power have promoted the continuous penetration of the baking market, thereby driving up per capita consumption expenditure on baked goods.

With consumption upgrading and the increasing acceptance of Western lifestyles and dietary cultures by young consumers, the consumption of baked goods has developed towards diversification and high-end, promoting continuous innovation and improvement in the baking industry. On the other hand, with the popularization of digital marketing across all platforms and takeaways, the number of transaction users has significantly increased, reaching a wider consumer base while also bringing about a double increase in revenue and operational efficiency for baking brand owners, boosting the further development of the baking market.

Zhang Jianjian, Partner and Managing Director of Frost & Sullivan Greater China

Zhang Xiaojing stated that the pandemic has had many impacts on baking enterprises. From the enterprise side, after the outbreak of the pandemic, baking enterprises have paid more attention to digital innovation and upgrading in terms of products, channels, and marketing, such as launching online limited products, self-built online ordering platforms, live streaming sales, etc. At the same time, the proportion of online channel income has increased significantly. From the consumer side, consumers have significantly increased their attention to food quality and safety when purchasing baked goods.

Zhang Xiaojing, Executive Director of Frost & Sullivan Greater China

The report points out that the Chinese baking industry shows the following five development trends: 1) Baking products are becoming more diverse, healthy, snack-like, and interesting to meet the changing needs of young consumers; 2) Baking enterprises are committed to researching and selecting higher-quality raw materials and functional and nutritious ingredients to organically combine with baked goods; 3) Multi-channel digital marketing + live streaming, online consumption have become new marketing trends; 4) Diversification of baking channels: New Chinese-style baking leads industry growth, new baking cross-border forces continue to expand; 5) Under the "carbon peak" and "carbon neutrality" plans, it is expected that the Chinese baking industry will gradually implement low-carbon production concepts starting from the upstream in the future.

According to Frost & Sullivan research, the R&D trends of Chinese baking enterprises include youthfulness, product innovation, seasonal R&D, baking black technology, industrialization 2.0, low carbon environmental protection, etc.

• Youthfulness

To meet the needs of the main consumer group, Generation Z, the interviewed leading baking brands focus on upgrading product appearance, trendiness, and healthiness, aiming to make baked goods a "fashionable" carrier in young people's consumption.

• Product Innovation

Consumption upgrading has prompted the interviewed enterprises to raise requirements for food raw material R&D iteration, product diversity, taste, functionality, etc.; Chinese-style baking categories are rich and diverse, and in recent years, new Chinese-style baking brands and trendy styles have emerged, becoming one of the main growth points in the baking industry.

• Seasonal R&D

Developing seasonal limited or festival-exclusive products using fresh seasonal ingredients is the focus of seasonal R&D for the interviewed baking enterprises; mooncakes, as traditional Chinese seasonal baked foods, are a key category for seasonal baking R&D, with the overall market scale maintaining a slight increase, leading brand sales growing, and room temperature mooncakes remaining mainstream.

• Baking Black Technology

With consumers' increasing demand for the functionality of baked products, "black technology" raw materials such as lactic acid bacteria, probiotics, and collagen have become another possibility for new product R&D.

• Industrialization 2.0

The overall industrialization level of the baking industry will continue to improve in the future, and industrialization 2.0 represented by industrialized semi-finished production + store baking/decoration is expected to be the optimal solution to balance product production efficiency and quality;

• Low Carbon Environmental Protection

The baking industry will actively respond to the "14th Five-Year Plan," incorporating low carbon environmental protection into the consideration criteria for raw materials and processes; in the baking industry, the key links for low carbon environmental protection are the upstream livestock industry and production process, and leading enterprises in the industry have carried out relevant carbon neutrality research regarding their carbon emissions.

The fourth part of the report focuses on consumer insights, comprehensively analyzing the consumption psychology and habits of baked food consumers from perspectives such as consumer profiles, main consumption purposes of baked foods, main consumption scenarios and time periods, preference for shelf life, purchase channels, single purchase price range and frequency, preferences for the taste, texture, flavor, and functionality of baked foods, and consumers' awareness of dairy fat and plant-based fats.

1) From the perspective of consumers' age, gender, occupation, and average monthly family income,The main consumer groups for baked foods are post-90s and post-00s, female consumers, students, and white-collar workers, with an increasingly younger age structure in recent years; about 64% of consumers have an average pre-tax monthly income exceeding ten thousand yuan.

2) From the perspective of preference for shelf life,Consumers prefer fresh and short-shelf-life baked foods, with more than half of consumers choosing to eat on the same day or within a short period when selecting among bread, cake, and snack baked foods. The concept of fresh food in the baking consumption market is significant, and consumers tend to buy more snack baked foods when purchasing baked foods with a relatively longer shelf life.

3) From the perspective of purchase channels,In the post-pandemic era, leading baking enterprises have strengthened their online ordering systems, with a significant growth rate in online channels, mainly reaching consumers through e-commerce platforms and takeaways. The overall online channel purchase proportion of baked foods is about 30%; currently, offline chain bakeries are still the main purchase channel for baked foods.