In 2008, the bakery products market in the EU was worth €108bn with volume consumption totalling 38Mt. Consumption of chocolate and sugar confectionery was much lower in volume terms at just 4Mt in total, but relatively higher in value at €44bn.
Both markets have seen similar growth rates of around 2% per year in value between 2003 and 2008 and 0.4% in volume.
Use of ingredients going into these end-products has been growing at a much faster rate than the base markets, however. Between 2003 and 2008, usage of 16 ingredients analysed by RTS grew by an average of 2.7% per year in volume although by just 1.7% in value.
The development of value-added products has driven the use of additives in general. However, acidulants, preservatives, antioxidants, emulsifiers, colours and flavours have seen relatively poor performance as manufacturers attempt to reduce their dependence on additives, while 'natural' (and more expensive) ingredients, have boosted overall figures.
Health factors have also played a large part in the dramatic increase of ingredients usage across bakery and confectionery markets, boosting demand for vitamins, minerals, fat substitutes, sweeteners, omega-3s, prebiotics and probiotics. The main growth drivers are: clean labels, the development of added value variants, convenience and health.
Between 2008 and 2013, bakery and confectionery markets are predicted to grow by an average of 0.4% per year in volume and 1.4% in value. Despite the economic downturn, bakery is still expected to perform well.
While the ingredients sector will face price pressures, it is expected to continue to see faster growth than the base markets. Probiotics, prebiotics, omega-3 and fat substitutes are expected to perform best, although growth is predicted to be significantly less than the sector has seen in the past five years.
While the next five years will see limited opportunity for adding value, manufacturers would be well advised to focus on products that offer value for money. Convenience will also be a key factor, encouraging sales of ready-to-eat breakfast cereals and bars, while the need for treats and better health will influence sales even among consumers with least available incomes.
In terms of ingredients, the key areas for growth and development are forecast to be: natural colours, flavours, antioxidants and preservatives.