The global baking ingredients market is estimated at USD 16.6 billion in 2021 and is projected to reach USD 22.3 billion by 2026, at a CAGR of 6.0% from 2021 to 2026.
Flour, water, and leavening agents are the ingredients primarily responsible for the characteristic appearance, texture, and flavor of most bakery products. Oils, eggs, emulsifiers, colors, shortening, and sugar are effective in modifying these qualities and produce a good-quality product.
There has been a spike in demand for baking ingredients, such as baking soda, baking powder, cocoa powder, and other condiments, as consumers stranded at home due to the Covid-19 lockdown have taken aggressively to baking. Baking ingredient manufacturing companies such as Cargill (US), Kerry Group Plc (Ireland), and many others and retailers have reported a significant increase in the sale of these products since the lockdown compared to the same period last year. With the recent influx of international cafe and bakery chains, on-the-go food has become increasingly popular.
COVID-19 impact on the baking ingredients market
The novel coronavirus/COVID-19 pandemic has significantly impacted the whole food and beverages industry, among which the bakery industry was one. This pandemic has resulted in mass production shutdowns and supply chain disruptions, which have also affected the economy.
Due to the lockdown, during the start of 2020, the sales of non-edible products, such as disinfectants, toilet paper, paper goods, and hand sanitizers, were high in demand, and the sales of edible products, such as bakery, meat products, and many others were up to the mark, as the supply of bakery was insufficient as many of the bakers have shut operations due to the shortage of labors. The disruption in logistic facilities due to the lockdown had created more issues in the market, as consumers were not getting products as per their requirements, which ultimately affected the market. Another factor that had impacted the market is the lack of raw material availability, due to which production of products was not proper.
Bakery ingredient manufacturers faced the same problems like supply chain disruptions, lack of labor, and insufficient raw materials. Due to these issues, smaller bakers in the unorganized segment were the worst affected. But, as time passed, the government started allowing the reopening of the shops. The demand for bakery products, especially bread and others, took a hike, as these are the essential products, which are used in the daily diet, majorly as breakfast and evening snacks. Therefore, the demand from the household sector for bakery products has increased. On the other hand, the food services sector has faced a decline in the market for bakery products that were considered to be one of the demanding products in the foodservice sector.
Key participants in the baking ingredients market such as Cargill (U.S.), Archer Daniels Midland Company (U.S.), Associated British Foods plc (U.K.), Koninklijke DSM N.V. (The Netherlands), Kerry Group plc (Ireland), and AAK AB (Sweden). Other players include British Bakels (U.K.), Corbion (the Netherlands), IFF (US), and Dawn Food Products, Inc. (U.S.).
