Europe Bakery Product Market

Market Overview

The Europe bakery product market size witnessed significant growth in the past and is expected to grow at a CAGR of 4.6 % during the forecast period (2022-2030).

The use of bakery goods has increased significantly in formal and informal settings. They include bread, rolls, pies, cereals, and cakes and are manufactured from grains and prepared using dry heat in an oven or hot ashes. Baking has a rich history that dates back thousands of years, and demand for these goods has steadily increased. Bakers used to make baked products at home and sell them on the streets initially. Eventually, this resulted in specialized bakeries selling their wares to homes and businesses.

Europe currently dominates the bakery goods market, and this trend is expected to continue. The European market is developing due to the over 150 bakeries there and the expanding snacking culture. Given how frequently bakery items are consumed in the area, there is a continuing need for healthier substitutes, such as whole-grain bread enhanced with high fiber and omega-3. Italian consumers strongly prefer gluten-free bread because of the country's emphasis on wellness and good health. Additionally, gluten-free bread is healthy and simple for the stomach.

Market Dynamics

Europe Bakery Product Market Drivers

Rising Trend of Healthy Living, Natural Nutrition, and Organic Products

In Europe, the increasing popularity of natural nutrition, healthy lifestyles, and organic products has significantly contributed to the demand for food items that are whole wheat, light, natural, and free from additives. The recent increase in sales of packaged products, including whole wheat, whole meals, gluten-free, and natural options, reflects the growing preference for healthier food choices. Bakery products have long played a crucial role in human nutrition, offering convenience, accessibility, and nutritional value, which are important factors for their continued presence in the modern market. These products hold significant importance in middle- to lower-income countries’ diets. Bread, a staple food in various local cuisines worldwide, has shown impressive growth even during periods of global economic downturn.

Bread Remains the Strength in the Bakery Industry

While bread remains a significant player in the European bakery products industry, it faces competition from other items, such as pastries and doughnuts, which have seen rapid growth and are projected to continue expanding. The increasing demand for bread variants that are whole grain, high in fiber, gluten-free, or deemed healthy and fortified is driving growth in the bread segment. These bread products have gained popularity among consumers adopting a healthier lifestyle. However, competition in the bread market varies in developed countries due to the wide range of product options and the involvement of numerous informal channels in bread production.

Europe Bakery Product Market Restraints

High Entry Barriers Owing to Brand Loyalty and Huge Capital Investments

The bakery industry encounters notable competition due to strong customer loyalty to specific brands and substantial financial investment requirements, leading to considerable entry barriers. Major companies employ diverse approaches to attain maximum business growth, including forming partnerships, engaging in mergers and acquisitions, establishing strategic alliances with local manufacturers, and expanding their distribution networks.

Europe Bakery Product Market Opportunities

Growing Confectionary Market

The confectionery market in the United States is poised to benefit from the positive prospects of the overall confectionery industry. The growing demand for convenient snacks is driving the expansion of the confectionery products market in the country. Product innovation, including introducing low-fat, low-calorie, sugar-free chocolates, and non-chocolate confections, is fueling market growth. Promotional activities and social media marketing are also contributing to this upward trend. The market research indicates that the confectionery market in the US is expected to experience a compound annual growth rate (CAGR) of 4.3% from 2017 to 2022, reaching a market value of USD 46.4 billion. The volume of confectionery consumption is projected to increase from 2,844.9 million kg in 2017 to 3,164.6 million kg by 2022, with a CAGR of 2.2%. Additionally, the per capita consumption of confectionery in the US is predicted to rise from 8.7 kg in 2017 to 9.3 kg by 2022. Chocolate holds the largest market share, generating sales of USD 21.2 billion in 2017, followed by sugar confectionery (USD 13.1 billion) and gum (USD 3.4 billion).

Regional Analysis

The Europe bakery product market is segmented by country: Germany, France, The U.K., Italy, Spain, Rest of Europe.  France holds the major share of the market with a CAGR of 5.8% during the forecast period.

The Europe bakery product market can be analyzed regionally, with different countries exhibiting unique characteristics. Germany holds a prominent position, driven by a strong bakery culture and a wide range of traditional and artisanal products. France is known for its exquisite pastries and bread, reflecting its culinary heritage. Italy excels in bread varieties, focusing on quality and regional specialties. Scandinavian countries emphasize health-conscious options, while Eastern European markets prefer sweet pastries. The regional variations in tastes and preferences shape the dynamics of the Europe bakery product market.

Germany is estimated to dominate the bakery goods market in Europe. Baked goods are significant in the British diet, making them a household staple and driving sales. Despite a preference for toast/rusk as a breakfast option, the United Kingdom has one of the lowest per capita bread consumption rates globally. However, nearly 70% of households in the U.K. regularly incorporate bread into their lunches or breakfasts, supporting the local market for bakery goods.

Segmental Analysis

The Europe bakery product market is segmented into product range, type, distribution channel, and form.

It is further segmented by product range into cakes, pastries, bread and rolls, cookies, biscuits, pretzels, tortillas, and others.

The biscuits hold the market's major share and are expected to register a CAGR of 6.0% over the forecast period. The biscuit sector is one of the fastest-growing markets for fast-moving consumer goods (FMCG). Sweet biscuits are the most popular and fastest-growing segment of the worldwide biscuit market. As more people buy sweet biscuits and other varieties of biscuits, sweet biscuits are expected to dominate the global market. The cookies (sweet biscuits) market consists of the retail sales of assortment cookies, butter cookies, chocolate cookies, cream-filled cookies, plain cookies, wafer cookies, artisanal cookies, in-store bakery cookies, and egg cookies.

The biscuits market type is further segmented into rolled, drop biscuits, scones, shortcakes, and others.

The drop biscuits hold the major market share and are expected to register a CAGR of 7.2% over the forecast period.

The cake market type is further segmented into cupcakes, dessert cakes, and sponge cakes. 

Dessert cakes hold the market's major share and are expected to register a CAGR of 2.8% over the forecast period. Dessert cakes are expected to keep up their lead over the anticipated period because they are commonly consumed fresh on various occasions. In many countries, it is also consumed as part of the dessert after meals. The product category that is expected to grow the fastest is sponge cakes. This is a result of their expanding appeal to young people worldwide. These sponge cakes have a lengthy shelf life in comparison to other desserts. These goods can be enjoyed both when they are still fresh and after a week. As a result, Young people worldwide are boosting the demand for these products.

The pastries market type is further segmented into shortcrust pastry, filo pastry, and puff pastry. The puff pastry holds the major share of the market and is expected to register a CAGR of 5.5% over the forecast period. The majority of patisserie is utilized in numerous ceremonies across the U.S. as desserts or customized cakes for weddings. During the anticipated term, rising product consumption at various events and festivals would generally support the market for Patisserie baking products. The final product is often made from fresh or frozen dough and eaten as a sweet dessert.

The bread and rolls market type is further segmented into baguettes, loaves, rolls, burger buns, ciabattas, sandwich slices, frozen bread, and others.

The rolls hold the major market share and are expected to register a CAGR of 5.9% over the forecast period.

By cookies market type, it is further segmented into molded cookies, drop cookies, bar cookies, rolled, refrigerator (icebox), sandwich cookies, and others.

Bar cookies hold the market's major share and are expected to register a CAGR of 6.9% over the forecast period. It is described as a flat, baked sweet dessert produced using oil or fat, flour, raisins, chocolate chips, oats, nuts, and other ingredients to enhance flavor and act as garnish. Sugar or sugar-free sweeteners may be used as desired. There are various types of biscuits, such as sandwiches and chocolate-filled biscuits. Both grocery stores and convenience stores and bakeries provide freshly baked cookies. The population's increasing demand for products created in bakeries is the primary factor driving the market's growth. The primary forces behind market increase also include changing lifestyles and work patterns, the availability of nutritious, gluten-free, digestible cookies, etc. The improving economy and increased disposable income further drive the market's rise.

The distribution channel is further segmented into convenience stores, specialty stores, hypermarkets and supermarkets, online retailing, and others.

Online retailing holds the major share of the market and is expected to register a CAGR of 5.6% over the forecast period. Due to the widespread use of smartphones and the internet, online sales channels will experience rapid growth during the forecasted period. Local small businesses frequently competed against major brands and internet start-ups in the Bake Off Bakery industry, particularly those creative and quick-moving firms. Businesses that operate in physical locations have a problem due to the explosive rise of online retailing over the past ten years. While online retailing keeps expanding, physical shops are having trouble. If bakeries could benefit from e-commerce, this shifting shopping tendency could represent a chance for the industry.

It is further segmented by form into organic, gluten-free, sugar-free, low-calorie, and others.

The low calories hold the market share and are expected to register a CAGR of 5.6% over the forecast period. The demand for low-calorie bakery goods has experienced a noticeable increase in size and valuation over the last few years. Additionally, the millennial age has made high-fiber, multigrain bakery items the trendiest because they focus on health and fitness and are responsible for expanding low-calorie bakery products. Additionally, the demand for low-calorie cake is rising due to the increased knowledge of calorie-free products that satisfy cake desires without increasing calorie consumption, propelling the global market for low-calorie bakery products to develop significantly.

Recent Developments

• September 2021- Finsbury Food Group expanded its Mary Berry supermarket cake range with the launch of Bundt cakes. The Bundt cakes come in two flavors, lemon sponge cake with lemon icing, lemon curd drizzle, and hand-decorated Belgian with chocolate curls, and chocolate sponge cake featuring chocolate icing and hand-decorated Belgian dark and white chocolate.