The global baking ingredients market is expected to grow from USD 16.6 billion in 2021 to USD 22.3 billion by 2026, at a CAGR of 6.0% from 2021 to 2026. The growth of the baking ingredients market is driven by the rising demand for healthier food and changing food consumption patterns of consumers. The key drivers for the market’s growth are the changing consumer lifestyles, preference for convenience foods, and increasing demand for natural and healthy ingredients. A broad range of trends is driving innovation in the bakery products sector, providing products formulated with plant protein, healthier fats, creative flavors, and color combinations, or less sugar and synthetic ingredients. The industry is seeing major innovations in clean label, vegan, and gluten-free offerings.
Baking Ingredients Market Dynamics
Drivers: Worldwide increase in the consumption of bakery products and confectionery
The surging demand for confectionery and baked foods can be attributed to the rising food trend of convenience foods. Owing to prolonged working hours, hectic lifestyles, and lack of time, consumers are presently opting for foods that save time in procurement, preparation, and cleanup due to their hectic lifestyle and lack of time. In developing countries like US and UK, several local bakery businesses, cafes, and supermarkets have emerged in recent years to cater to the increased demand for fresh and frozen bakery goods and varied commercial bakery ingredients.
In low-income countries like India, the home bakery has gained much popularity in the past few years, suggesting increased use of bakery ingredients. The palatability, rich texture, extended shelf-life, easy accessibility, inexpensiveness, and nutrition associated with bakery foods are primarily influencing their sustenance in the modern market, propelling the demand for baking ingredients. In America, the USD 153 billion bakery industry, driven by high baked foods consumption, is augmenting the expansion of the baking ingredients industry.
Restraints: Health problems resulting from excessive intake of trans-fatty acids
Trans-fats in the form of vegetable shortenings and margarine are applied in baked food items to enhance their palatability, texture, mouthfeel, and shelf-life. However, increased consumption of trans fatty, rich items has added to the global burden of metabolic diseases like diabetes mellitus, heart diseases, obesity, and other related health issues. Thus, developing countries like the US and the UK are incorporating trans fatty acid intake limits in their national health policies. The baking industry is gradually replacing fats with the application of more natural ingredients like fibers to maintain the taste and texture of baked goods without impacting human health.
Opportunities: Increasing popularity of veganism and vegetarianism among consumers
The present-day purchasing behavior of consumers is influenced mainly by the rising concerns of sustainability, animal welfare, and climate change which is affecting the baking ingredients market size. Considering the detrimental impacts of animal-based foods on the planet, many consumers are gradually adopting veganism and opting for plant-based, natural food products that ensure a reduced carbon footprint. Thus, there has been an increased demand for vegan cakes, muffins, and pastries made from plant-based bakery ingredients like dairy-free milk alternatives, fibers, natural colors, and flavors.
Growth of the frozen bakery products market
The taste, texture, easy availability, prolonged shelf-life, convenience, and health benefits associated with frozen bakery items have increased their popularity among consumers. The increasing demand for frozen bakery foods has created opportunities for frozen bakery manufacturers to expand their business. The bakers are incorporating functional ingredients like oats, fortified flour, millets, and prebiotics to cater to the specific needs of health-conscious consumers. It is anticipated that frozen bakery products have potential prospects of growth in fast-growing economic countries like China, owing to increased disposable income and purchasing power parity (PPP) of the country’s expanding population.
Regional Insights:
The Asia Pacific region is anticipated to be the fastest-growing in global baking ingredients market, attributed to its growing economy and increasing purchasing power of consumers. Urbanization has brought about lifestyle changes that have modified the traditional consumption patterns of consumers in this region. There is an increased demand for convenience and packaged foods owing to the increasing number of working consumers having fast-paced lives. The Asia pacific produces baked goods with a shorter shelf life but can be prepared quickly to cater to the changing needs of consumers. With surging disposable incomes and young people gaining more buying power and shifting their priorities towards sustainable, convenient, vegan food products, Asians are turning towards ready-made bakery products for consumption.
Top Baking Ingredients Companies in the Market
Top baking ingredients companies include Associated British Foods Plc (England), AAK AB (Sweden), Cargill (US), and Kerry Group Plc (Ireland). Some of the other dominant players in the market include Corbion (Netherlands), Dawn Food Products, Inc (US), Archers Daniels Midland Company (US), Dupont (US), Lallemand Inc. (Canada), and Tate & Lyle (UK), IFFCO (UAE), Lesaffre (France), International Flavors and Fragrances Inc. (US), and British Bakels (England). These players have focused on strategies such as new product launches and collaborations to gain a larger market share in the baking ingredients market.
AAK AB (Sweden) is a leading manufacturer of high value-added specialty vegetable oils & fats solutions. The company operates through three business segments: food ingredients, chocolate & confectionery fats, technical products, and feed. The company offers several baking ingredients for the baking of bread, biscuits & cookies, cakes & laminated pastries, such as vegetable oils & fats, and emulsifiers.
Associated British Foods (ABF) (England) is a British multinational food processing and retailing company headquartered in London, England. The company is engaged in the production of various food and ingredients items. It operates through five business segments: sugar, agriculture, retail, grocery, and ingredients. The company manufactures bakers’ yeast, bakery enzymes, bakery preservatives, and many other ingredients used in baked goods.
Kerry Group plc (Ireland) is involved in the production and marketing of consumer food products. The major products offered by the company include ingredients, flavors, and integrated solutions, savory, dairy systems, and cereal & sweet systems for the food & beverage industries. It operates through two business segments: taste & nutrition and consumer foods. The company provides a wide range of baking ingredient products such as flavors, emulsifiers, fibers, and enzymes, which are used in making varieties of baked products.
