China’s bakery and cereals industry poised to grow at a value CAGR of 8.5% over 2018–2023, says GlobalData

Fuelled by the rising disposable income of urban consumers, the bakery & cereals industry in China is expected to grow at a compound annual growth rate (CAGR) of 8.5% from C¥269.2bn (US$40.7bn) in 2018 to C¥403.8bn (US$59.6bn) by 2023, according to GlobalData, a leading data and analytics company.

GlobalData’s report, ‘Country Profile: Bakery & Cereals in China’, reveals that cakes, pastries & sweet pies held the largest value share of 48.9%, followed by cookies (sweet biscuits) with 15.1% in 2018. Cookies (sweet biscuits) are set to grow at the fastest value CAGR of 9.9%, closely followed by energy bars with a value CAGR of 9.8% during 2018–2023.

Priyanka Jain, Consumer Analyst at GlobalData, says: “Large scale investments and government spending on infrastructure is creating jobs leading to a decline in unemployment rate in China. With increasing employment opportunities and urbanization, Chinese consumers are short on time and seeking convenient and on-the-go food options thus opting for bakery & cereals products.”

China’s value share in the Asia-Pacific (APAC) region is expected to increase from 36.8% in 2018 to 40.9% by 2023. The per capita consumption (PCC) of bakery & cereals in China, which was five kg in 2018, is forecast to increase to 6.3 kg by 2023; however, it will still remain below the global and regional average.

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Chinese bakery & cereals sector is highly fragmented with the top five companies —accounting for a combined value share of 6.4% in 2018. Oreo, Orion, and Want were the leading brand and accounted value share of 4.9% while artisanal producers accounted 20.9% of value share in 2018. Artisanal products remained popular in the country.

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Food & drinks specialists emerged as the leading distribution channel in the Chinese bakery & cereals sector and accounted value share of 48.8% in 2018, followed by hypermarkets & supermarkets, and convenience stores with shares of 29.6% and 18.6% respectively.

Priyanka concludes: “‘Naturally healthy’ and ‘functional & fortified’ are the key product attributes in Chinese bakery & cereals sector, while ‘general well-being’ and ‘health management’ are the most sought-after consumer benefits. Bakery & cereals with ‘natural’ claims are very popular among consumers as they are perceived to be ‘good for you’. Moreover, Chinese consumer prefer products with added vitamins, fiber, and protein and are seeking products with claims such as ‘multi-grain’, and ‘reduced sugar’. It can be expected that the demand for products with ‘natural’ claims are set to rise further during the next five years.”

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