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China’s Bakery Products Market Expands

Bakery products are becoming increasingly popular among consumers in the People’s Republic of China (PRC), according to the Frost & Sullivan Report.

The report indicates that the retail sales value of bakery products in China had increased from approximately $24.3 billion in 2015 to $31.85 billion in 2020, representing a compound annual growth rate (CAGR) of 5.6 percent.

Above all, the increase in retail sales value during the period was due to rising disposable income, an influx of Western pastries, and increased per capita consumption of bakery products in the PRC.

With an optimistic economic outlook, highlighted in the 13th Five-Year Plan for National Economic and Social Development of the PRC by the PRC government, and increasing consumption of bakery products among Chinese consumers, the retail sales value of bakery products in the PRC is expected to continue to increase at a CAGR of 5.7%, reaching approximately $42.34 billion by the end of 2025.

Bakery products

In particular, according to Frost & Sullivan’s report, from 2015 to 2020, the retail sales value of bakery products in Xinjiang had increased at a CAGR of 7.1%, from around US$880 million to approximately US$1.24 billion.

The increase in retail sales value during the period was mainly due to the increase in disposable income, the influx of Western confectionery and the increase in per capita consumption of bakery products in the area.

Frost & Sullivan estimates that bakery products will become increasingly popular among Xinjiang consumers and the total consumption of bakery products will continue to increase, driving the retail sales value of bakery products in Xinjiang to reach approximately US$1.7 billion by the end of 2025. The amount represents a CAGR of 6.4 percent.

This growth in the retail sales value of bakery products will create enough room for the industry to develop moderately and market participants can look for opportunities to expand their presence in the Xinjiang market in the coming years.

Industry

According to Chanson International Holding, there are three different modes of production of bakery products in China.

Most bakery product manufacturers produce their products in a central factory and deliver the finished product to chain stores and retail outlets for sale.

These manufacturers may enjoy a lower manufacturing cost, but the shelf life of their bakery products is usually shorter (approximately three to five days).

Some bakery product manufacturers produce semi-finished products in a central factory and rely on their stores for further processing, such as baking, garnishing and packaging.

Bakery products produced in this way are fresher than those supplied from a central factory, as the bakery products are prepared just before they are placed on the shelves.

Finally, some bakery product manufacturers set up a designated area in their chain stores or retail stores for production in order to offer bakery products with the best quality and freshness.

However, since it takes more labor to produce the same amount of bakery products, the cost of this production model is the highest of the three production modes.

 

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