Baking Ingredient Market

Introduction: -

The fast pace of urbanization is being accompanied by fast changes in the very lifestyle of people. This leaves people with pithily little time for cooking and hence the food and beverage manufacturers have been prompted to diversify most of their product lines, especially in the bakery segment where products like bread and snacks are increasingly used as convenient breakfast options and quick snacks. This is directly related with the baking ingredients that help in the development of the freshness, softness, and palatability of the baked goods and simultaneously improving their nutritive value. This is possible only because baking ingredients either have wide availability or are of the nature of essentiality of different diets around the world, thereby increasing the demand scenario for the baked goods throughout.

Bread and crackers Market Demand Increasing at Tepid Growth, This factor is expected to drive the growth of the global baking ingredients market significantly. The trend toward healthy bakery ingredients with fewer artificial additives is high in mature markets like North America and Europe. People want convenience nowadays, but at the same time, they are becoming more health conscious. It means that manufacturers are now trying to extend shelf life while preserving freshness and flavour, new methods for which are being innovated by them.

This has also resulted in bulk buying tendencies in retail bakeries, where products have long shelf lives or frozen storage facilities. In turn, manufacturers come up with baked products to combine freshness, natural ingredients, and low-sugar enzymes to answer consumer trends for healthier, more natural food. This is set to enhance the market growth of bakery products in the coming years.

The market value of baking ingredients was US$ 16.6 Billion in 2023 and is expected to reach US$ 25.2 Billion by 2032, reflecting a CAGR of 4.6%.

Baking Ingredient Market

Size, by Product, - (USD Billion)

Flour

Sweeteners

Fats & Oils

Leavening Agents

Other Products

The Market will Grow

At the CAGR of:

4.6%

The Forecast Market

Size for in USD:

$25.2 Billion

Market Dynamics: -

• Consumer preference: Change in consumer preferences regarding healthier products, organic, and gluten-free products is a market influencer. Many consumers nowadays seek baked goods that best fit their dietary needs or suit their lifestyles.
• Fast-paced Lifestyles: On this premise, the need to bake comfortably has developed into one that demands pre-mixed baking components, ready-to-bake dough, and mixes. Manufacturers consequently make creative and convenient easy-to-use creations.
• Ingredient transparency and clean labels: The consumer awareness on ingredients used in food is increasingly taken seriously by the consumers. Clean labelling with recognizable ingredients has been a huge trend in bakery products of late. The manufacturers responded to this change by reformulating the products without artificial additives and preservatives.
• Globalization and Cultural Influences: Migration, as well as globalization, are the two common factors resulting in a two-way influence of culinary traditions and tastes all over the world. This inducted new ingredients and flavors in baked products based on the influence of other culture's food.
• Technologies: Technical innovations in food processing and in the preparation of ingredients associated with creating products and increasing efficiency in bakery manufacturing. Such advanced technologies as encapsulation, modification of enzymes, and nanotechnology are involved in the enhancement of functionality and quality within bakery ingredients.
• Economic factors: Economic conditions including levels of income, inflation rates, and patterns of consumption are some of the major demand determinants for baked goods. At the time of the economic downturn, consumers would rather prefer home-based low-priced baked items.
• Sustainability and Environmental Issues: Rising fast in the eyes of the consumer and business alike is environmental sustainability. This raises demands for sourcing practices that are more oriented toward sustainability, clean labeling and packaging, and reduction of wastage of food at bakery ingredient supply chain levels.

Principal Baking Ingredients Company: -

• Cargill – (United States)
• Archer Daniels Midland Company ADM -(USA)
• DuPont now part of International Flavors & Fragrances Inc. -(USA)
• Kerry Group – (Ireland)
• Tate & Lyle PLC – (UK)
• Royal DSM – (Netherlands)
• Corbion – (Netherlands)
• Associated British Foods plc ABF – (UK)
• Lallemand Inc.–(Canada
• Ingredion Incorporated - (USA)

Recent Development: -

Cargill: Cargill has come up with a new line of low methoxyl (LMC) pectins to help in perfectly texturing whole grains. This launch has been targeted to fulfill the enhanced demand for clean label products, while catering to the changing consumer interest in the food industry that homes in on the natural and effectively recognizable ingredients in its food products.

Archer Daniels Midland Company (ADM):  ADM is now focusing on expanding its natural flavors, colors, and other food component usage. It is working toward re-strategizing things as consumer trends have shifted toward seeking more transparency and less processing in the food industry.

The Kerry Group: Kerry Group has recently been awarded Cargill's confectionery business for $170 million. The acquiring company feels its merger will result in the delivery of integrated solutions and enhance its market reach in the food and beverage markets as well as the culinary segment to the emerging markets.

Regional Insights: -

Asia-pacific: The region is forecasted to grow at a fast pace in the forecast period. Growing populations of countries like China and India drive growth. Changing urban lifestyles have resulted in considerable adoption of western eating habits in the region, thereby boosting demand for good-quality cooking products. The situation has thus created a good opportunity for bakers to supply emulsifiers, enzymes, baking powders, oils, and fats. Moreover, in order to fulfill the desire of demand for more premium products, companies are investing in new ways of production methods that will hopefully make the market even stronger during this forecast period.

North America: North America had more than 25.2% market share by 2023 and is expected to reach up to a CAGR of 6.4% during the forecast period. The nations like the US and Canada have an on-the-move fast pace of life that acts as significant drivers in the region. The strong demand for ready-to-eat baked foods is further complemented by convenient packaging solutions, like paper towels and rolls, etc. Added to this, the gluten-free trend remains strong and continues to build up Specialty cookware demand.

Europe: Europe is a mature market with a tradition of baked goods. Countries like Germany, France and Great Britain drive the market. There is strong demand for artisanal/specialty baked goods, organic and white label food in the region. Health and wellness consumers drive increased demand for whole grain, low-sugar foods, and baked goods. The presence of companies with history and a high level of innovation in the region will support market growth.

Latin America: The Latin American market is on its course of growth, led from within by Brazil and Mexico. The major drivers are increases in west food influence and demand for convenience foods. Another trend in demand is that of healthy and natural recipes, including organic foods without artificial additive. In order to meet consumer demand, local manufacturers are expanding their product portfolios, while international players increasingly move into the region.

East and Africa: Baked Products are in increased demand in the East and Africa Region, notably in the urban areas. The forces behind it are increasing urbanization along with the growing middle-class population, and the impact of western food culture. Demand for halal certified foods is rising in this region increasing demand for clean and green label products. It has major markets in places like the United Arab Emirates, Saudi Arabia, and South Africa, all of which are growing at a very fast pace propelled by rising consumer demand.

Oceania: Those making out the Oceania region are countries such as Australia and New Zealand, mature baking markets in their own right. At this stance in the world, particularly in Oceania, there is an uptake for setting up a vigorous culture of baked goods, and most of its consumers reach more for healthier options like gluten-free, organic, and low-sugar products. Growth in demand for industrial products and bakery products is also increasing in the region. The local as well as the international companies focus on innovations to cater to the local consumers' needs and wants.

Eastern Europe: The emerging market having maximum growth potential in the bakery sector is represented by Eastern Europe. Countries like Poland, Russia, and Hungary are emerging demands for baked goods due to rising disposable incomes and adoption of Western eating habits. The demand for healthy and natural foods is rising in this region. Local manufacturers are expanding products to have more diversity and better products, while international players are cash in on the growing potential in the region.

Market Segmentation: -

By Types:

Flour

• All-purpose flour
• Bread flour
• Cake flour

Sweeteners

• Granulated sugar
• Brown sugar
• Honey

Fats & Oils

• Butter
• Margarine
• Vegetable oils
• Shortening
• Lard

Leavening Agents

• Baking powder
• Baking soda
• Yeast

Dairy Products

• Milk
• Cream
• Yogurt
• Cheese

Eggs & Egg Replacers

• Fresh eggs
• Powdered eggs
• Egg substitutes

Flavorings & Extracts

• Vanilla extract
• Almond extract
• Citrus zest
• Spices

Additives & Preservatives

• Emulsifiers
• Stabilizers
• Dough conditioners
• Antimicrobial agents

Decorations & Toppings

• Frosting
• Chocolate chips
• Nuts
• Dried fruits

By Application:

Bread & Bakery Products

• Bread
• Rolls
• Bagels
• Croissants

Cakes & Pastries

• Cakes
• Cupcakes
• Pies
• Tarts
• Pastries

Cookies & Biscuits

• Chocolate chip cookies
• Shortbread
• Gingerbread
• Crackers

Desserts

• Puddings
• Custards
• Ice creams
• Mousses
• Cheesecakes

Savory Baked Goods

• Pizzas
• Quiches
• Savory pies
• Flatbreads

Snacks & Convenience Foods

• Granola bars
• Snack cakes
• Muffins
• Pancakes
• Waffles

By Geography:

North America

• United States
• Canada
• Mexico

Europe

• Germany
• UK
• France
• Italy
• Spain
• Netherlands
• Belgium
• Sweden
• Switzerland

Asia-Pacific

• China
• Japan
• India
• South Korea
• Australia
• Singapore

Latin America

• Brazil
• Argentina
• Chile
• Colombia
• Peru

Middle East & Africa

• UAE
• Saudi Arabia
• South Africa
• Nigeria
• Egypt

Baking Ingredient Market

Size, by Product, - (USD Billion)

The Market will Grow

At the CAGR of:

4.6%

The Forecast Market

Size for in USD:

$25.2 Billion

End User Insights: -

Commercial Bakery Group:

• Insights: One of the larger consumers of baked goods comes from bakeries, with a high need to mass produce bread, patisseries, cake and more cooking. The demand from this segment is because it needs consistency, performance and high-quality
• Description: Food service establishments, among them, the biggest sector are hotels, restaurants, cafeterias. This sector requires all types of food products in order to meet the needs and requirements of their consumers from traditional baked goods to fashion desserts and gourmet baked goods.
• Trends: Consumer demands are rising for premium and artisan foods, which meet the desire for unique and high-quality eating experiences. The food service sector demands convenient, ready-to-use foods that save time while maintaining consistency. Herbal, plant-based, and allergen-free foods are other emerging concepts in this sector.

Service Industry:

• Description: Food service industries, like hotels, restaurants, and cafeterias are the biggest customers of a baking business. All kinds of foodstuffs are ordered in these places to meet up with consumer demands; it ranges from traditional baked goods down to trend-setting dessert and gourmet baked products.
• Trends: Premium and artisanal foods gain interest while consumers continue to strive for new and different superior dining experiences. Convenient, ready-to-use foods help provide time savings and consistency for food service. Herbal, plant-based, and allergen-free foods are another growing interest trend in this channel.

Retail Customers:

• Insights: Retail customers represent a growing segment, especially those who cook more at home. This trend increased during the COVID-19 pandemic and remains popular. Retailers often sell less home-baked food, focusing on quality, variety and price.
• Trends: Consumer demand for healthier baking ingredients, such as wholemeal flour, natural flavors, and non-GMO products, remains on a strong growth trend. Specialty food demand is also rising, led by gluten-free flour, almond flour, and sweet varieties. The consumer today is sophisticated and choosy, seeking clean products and simple, recognizable foods.

Food Manufacturers:

• Statistical Information: Food Manufacturer's Association utilizes this group of products in their production process to make a variety of foods that include bakery products, snack foods, and processed foods. This industry requires resources that will be flexible, scalable, and easily integrated into fully automated production lines.
• Trends: The demand for new raw materials that will essentially enhance texture, flavor, and nutritional value is highly needed in this industry. A functional ingredient targeted by the food manufacturers which includes the ones enhancing shelf-life, reducing sugar content, and boosting nutritional value. Sustaining ethical practice remains pivotal for consideration.

Food Distributors & Retailers: 

• Understand: Wholesalers and distributors join the food manufacturers and the final consumers, for instance, retailers, food service businesses, and retailers. They aim to keep a large range of products to help satisfy diversified customer needs, ensure timely delivery, and keep the prices at a competitive level. 
• Trends: The trend that is becoming more focused on the need of the end users includes more of specialty foods, for instance, organic, non-GMO, and non-allergen-free foods. Therefore, the focus on vendors and resellers is more on value-added services like technical support and customization of their product.

Baking Ingredient Market TO (USD BN)

CAGR OF

4.6%

Baking Ingredient Market

25.2 Billion %

Key Stake Holders: -

• Manufacturers
• Suppliers
• Distributors and Wholesalers
• Retailers
• Bakeries
• Foodservice Providers
• Consumers
• Industry Associations and Organizations
• Research and Development Entities

Conclusion: -

The baking ingredients market keeps evolving with time, in line with the changing consumer preferences, evolving technologies at play, and changing regulatory developments. Focused on healthy choices, clean labelling, and sustainability, manufacturers have innovated to meet the demands of an ever-widening range of end-users across many applications and geographies. The successful adaptation of companies to these market dynamics opens numerous possibilities for growth and differentiation in one of the pillars of the food industry: the bakery sector.