The Growing Global Baking Ingredients Market: Trends, Drivers, and Challenges

The global baking ingredients market  is experiencing significant growth, driven by various factors such as the increased demand for baking ingredients during the Covid-19 pandemic, rising consumption of bakery products and confectionery, stringent regulations, and the growing trend of veganism and vegetarianism. This article explores the key drivers, restraints, opportunities, and challenges in the baking ingredients market. Additionally, we will discuss the market's regional landscape and key players in the industry.

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The Rising Demand for Baking Ingredients

Amid the Covid-19 lockdown, consumers found solace in baking, leading to a surge in demand for baking ingredients. Baking soda, baking powder, cocoa powder, and other condiments witnessed a significant increase in sales. Manufacturing companies and retailers like Cargill (US) and Kerry Group Plc (Ireland) reported a boost in the sale of these products compared to the same period last year. Furthermore, the recent rise in international cafe and bakery chains has popularized on-the-go food, further fueling the demand for baking ingredients.

Drivers: Global Rise in Consumption of Bakery Products and Confectionery

Bakery products have been an essential part of human nutrition for centuries. The convenience, taste, and affordability of bakery products contribute to their sustained popularity in the modern market. Consumers prefer attractive, tasty, and textured delicacies, leading to an increasing demand for bakery products and, subsequently, various baking ingredients used to enhance their taste and texture.

Restraints: Stringent Regulations and International Quality Standards

Baking ingredients undergo rigorous health and safety checks based on governmental regulations in different countries. Regulatory bodies, including the National Food Safety and Quality Service (SENASA), Canadian Food Inspection Agency (CFIA), U.S. Food and Drug Administration (FDA), World Health Organization (WHO), and Committee on the Environment, Public Health and Food Safety (EU), enforce food safety regulations. These organizations control the usage of chemicals and materials in food processing, ensuring the safety and quality of baking ingredients.

Opportunities: Growing Trend of Veganism and Vegetarianism

Consumers are increasingly considering health, sustainability, and social impact when making purchasing decisions. Environmental concerns and ethical objections to using animals in food products have led to a growing trend of veganism and vegetarianism. Many consumers are shifting towards plant-based alternatives due to reasons such as animal welfare, environmental consciousness, and personal health. This shift opens up new opportunities for baking ingredient manufacturers to cater to the needs of this growing market segment.

Challenges: Impact of Health and Wellness Awareness on Bakery Product Consumption

The rise in health issues among consumers has increased the demand for food products with lower fat and sodium content. Salt and sugar reduction has become a significant challenge in the food industry. Biospringer, a leading producer of leavening agents for the bakery industry, reports that nearly 33% of consumers worldwide prioritize "low salt" when making purchasing decisions. The increase in diabetes and obesity cases globally has also influenced consumer preferences, leading to reduced demand for bakery products high in fats and sugar. Consequently, this shift impacts the demand for various baking ingredients used in the production of such items.

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Regional Landscape: Europe Dominates the Market

Europe holds the largest share in the global baking ingredients market, accounting for 32.4% in 2020. According to the AIBI bread market report in 2012, Europeans consumed an average of 58 kilograms of bread and bakery products per capita. The production of bread and bakery products occurs through various means, including large industrial companies, traditional smaller-scale bakeries, and home baking.

Key Players in the Baking Ingredients Market

The baking ingredients market is highly competitive, with several key participants driving its growth. Notable companies in the industry include Cargill (U.S.), Archer Daniels Midland Company (U.S.), Associated British Foods plc (U.K.), Koninklijke DSM N.V. (The Netherlands), Kerry Group plc (Ireland), and AAK AB (Sweden). Other players such as British Bakels (U.K.), Corbion (the Netherlands), IFF (US), and Dawn Food Products, Inc. (U.S.) also contribute to the market's development and innovation.

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