The bakery & pastry industry, as is the case with many others, must adapt to the way consumers shop, to what they expect from products, and to the competitive strategies of manufacturers.
Trends have always given the direction, and as these currently point to healthier, free-from products, that’s where the industry is heading. At the same time, regional factors such as tariffs, private label growth, and regulatory environments are influencing market dynamics in key territories like the United States and the European Union.
According to a new report from The Insight Partners, the global frozen bakery products market is growing due to the increasing demand for frozen and convenience baked goods through e-commerce platforms. The frozen bakery products market is expected to reach USD16.53bn by 2031 from USD11.10bn in 2023; it is anticipated to record a CAGR of 5.1% from 2023 to 2031.
Hectic work schedules are changing the lifestyle and eating habits of consumers, thereby increasing their dependency on convenience food products, such as frozen bakery products. These products allow consumers to save time and effort associated with ingredient shopping and baking preparation.
The food industry is witnessing a surge in the consumption of high-quality convenience food. According to the ‘2023 Power of Frozen in Retail’ by The Food Industry Association and the American Frozen Food Institute, frozen food sales in the US increased by 7.9%, reaching USD74.2bn in July 2023.
The Millennial and Gen X populations are the major consumers of these products, shopping mostly in supermarkets and through online channels. As per the Government of Canada, the retail sales of frozen bakery products in the country were reported to be USD280.8m in 2022.
The sales of frozen foods in Germany increased by 3.6% in volume, reaching 3.91 million metric tons in 2022, compared to 3.77 million metric tons in 2021, as per the International Institute of Refrigeration. Prominent market players offer frozen bakery products, including bread and rolls, biscuits and cookies, donuts, and muffins. These products have extended product shelf-life due to the blast-freezing process.
According to the ‘2023 Food and Health Survey’ conducted by the International Food Information Council, out of 1,022 Americans (aged between 18 and 80 years), 61% of participants chose convenience as a major factor impacting food buying decisions in 2023, which was 56% in 2022. Preprocessed food allows consumers to save time and effort associated with food preparation and reduces baking time.
Online as the channel of choice
The emergence of e-commerce has transformed the way people purchase food products. Increasing penetration of the internet and smartphones, growing purchasing power of consumers, rising convenience provided by online retail shopping platforms, and rapid access to emerging technologies are the key factors bolstering e-commerce.
According to the US Department of Commerce Retail Indicator Division, e-commerce sales in the US reached USD870bn in 2021, which is 14.2% more than 2020. Furthermore, online grocery sales increased by 170% in 2021 compared to 2020, accounting for 9.6% of total grocery sales in the US.
The online sales of food and beverages increased during the COVID-19 outbreak due to the shutdown of brick-and-mortar stores and the imposition of social restrictions by governments of various countries across the globe. Consumers continue to prefer buying frozen food via online retail channels.
According to the ‘2023 Power of Frozen in Retail’ by The Food Industry Association and the American Frozen Food Institute, the number of online grocery shoppers who purchase frozen food through e-commerce channels is rising. The research also revealed that 86% of shoppers in the US who bought groceries online purchased frozen products in 2023, indicating a rise of 82% from 2020.
Consumers seek convenience, nutrition, and artisanal quality while preparing or purchasing baked goods, prompting manufacturers to enhance product quality and develop innovative products to cater to evolving consumer demands. Manufacturers are investing significantly in strategic development initiatives, such as product innovation, research and development, mergers and acquisitions, and business expansion, to attract a broad customer base and enhance their market position.
Geographically, Europe led the market in 2023 with a substantial revenue share, followed by North America and Asia Pacific. Further, Asia Pacific is expected to register the highest CAGR during the forecast period.
While these global trends highlight broad consumer demand for frozen bakery products, regional markets exhibit unique characteristics and challenges. In particular, the United States and European Union represent some of the largest and most mature bakery markets, where consumer preferences, regulatory frameworks, and trade dynamics interact to shape growth trajectories. Understanding these regional nuances is essential to evaluating market opportunities and risks.
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