• Tate & Lyle analyzes the strengths, weaknesses, opportunities and concerns in the European bakery market today.
A consumer study conducted by Tate & Lyle shows that almost half of 18-34-year-olds in the UK and Europe eat a sweet or savory bakery product every day, while only a third of consumers aged 34 and over do the same .
While most UK and European consumers consider baked goods to be a daily staple, they don't buy them just for the carbs. Younger consumers in particular are interested in health benefits, which drives the popularity of particular segments of bakery products.
And the introduction HFSS legislation in the UK and the Nutri-Score review have further emphasized the need for products with lower fat, sugar and salt content, the Tate & Lyle study shows.
Important data shaping the Bakery Market
With the bakery market expected to reach $272 billion by 2027, this is a huge opportunity that all stakeholders – from major manufacturers to independent artisans – cannot afford to ignore.
The new report Tate & Lyle's Bakery Digest provides an opportunity to explore how particular health needs influence the willingness to buy for different age groups and for different markets.
The study delves into the factors driving growth in the European bakery market by analyzing consumer consumption and purchasing behavior across a wide range of bakery products, including breads, cereals, cakes, biscuits, pastries and bars.
Tate & Layle ingredient company with agency Coleman Parkes surveyed 1.250 consumers aged 18 and over from five markets: UK, France, Germany, Spain and Poland.
The study also revealed how the cost of living crisis is changing buying habits, how the perception of baked goods is changing for different age groups and whether there is still a place for indulgence as people focus more on their health.
Concern for a healthy diet
Eating healthier means much more to consumers today than low calories or low sugar.
Frequent consumers of baked goods said the lack of added sugar in products was the biggest push for them to increase their overall consumption (32%), followed by low fat (22%) and reduced calories ( 19%), two thirds of them being willing to choose products with added fiber to support intestinal health.
Protein is equally important, being associated with muscle mass development, but also with healthy aging, appetite regulation and weight management. Meanwhile, one in five consumers are paying attention to clean label, which has evolved from the absence of ingredients perceived as suspicious and artificial to the concept of "few ingredients".
The study data shows that there is much more emphasis on positive nutrition messages. In addition to claims such as reduced fat and calories, consumers are increasingly looking for products rich in fiber or protein. Therefore, protein bars or high-fiber snacks, which were considered products dedicated to athletes, are becoming a habit on supermarket shelves.
An interesting trend is also the fact that consumers are starting to look for mentions about fiber and protein and on products in the snack category such as cakes and biscuits.
Reducing consumption
It's no surprise that in today's environment, consumers have become more cost-conscious, and this includes baked goods and pastries.
Of those buying less baked goods, 62% said saving money was a key factor in reducing spending, so for manufacturers cost will be key to attracting new customers.
Consumers are looking for the best value for money, but that doesn't necessarily mean the cheapest products. There is a recent premium on premium products, as they are seen as compensation for reduced spending on dining out. A research conducted by FMCG Gurus showed that 42% of respondents are cutting back on eating out and about 40% of those are looking for premium products for the home instead.
Shoppers are also taking time to think about managing their spending, with 67% of them preparing shopping lists, 38% setting a budget and 41% taking more advantage of promotional offers. In-store promotions were ranked as having the biggest influence on purchase decisions for both the UK and the rest of Europe for baked goods, ahead of advertising and recommendations from friends and family. At the same time, 52% of respondents are willing to prepare their own bakery products at home.
The most important topic remains health
Consumers are looking to bakery and pastry products for additional health benefits. The product ranges of the bakeries must offer quality, health benefits, while offering an authentic and savory taste, for real moments of indulgence.
And that's because, while times are tough and budgets are being squeezed, shoppers aren't willing to sacrifice taste, which remains the most important buying factor in all types of baked goods.
Which increases the pressure for reformulation, which for many producers is a real challenge, as it is difficult to innovate while maintaining the flavor profile. The bakery category in particular is also affected by restrictions on front-of-pack labelling, advertising and in-store displays.
HFSS product regulations
The British government launched the first phase of the regulations last year HFS extension, which restricts the display of products considered high in fat, salt and sugar at the ends of the shelves, near the cash registers and with implications even on shelf space.
And in 2025, the introduction of restrictions on promotions such as "buy one get one free", while those regarding TV and online advertising will also come into force before 21:00.
While 71% of consumers say that an HFSS rating does not deter them from buying an indulgence product, 65% call for manufacturers to reformulate products so they can still enjoy the convenience of buying them at the register.
This means that manufacturers may have to revise some of their formulations to attract new consumers and retain existing ones by maintaining a balance between making products healthier and ensuring their quality.
Restrictions affect different categories in different ways; people are less concerned that a cookie or cookie is HFSS, but they are not as willing to buy an HFSS snack bar. Almost a quarter (24%) of young people choose a snack bar with low or no sugar.
Protein, energy and nut bars are becoming an increasingly popular snack for young consumers, with the bar segment growing by 18,5% in value and 4,6% in volume over the past year, according to Nielsen Data. Experts expect this category to continue to grow, becoming a staple choice for those with an active lifestyle, not just those focused on sports nutrition.
Nutri score
Although not as restrictive, the Nutri-Score system - which has been in place since 2017 in some European countries - is designed to help consumers make healthier choices, with unhealthy components such as calories, sugar and saturated fat flagged with red (rating E).
It's just as effective at adapting to consumers' buying habits, with 61% of consumers admitting to switching to another bakery product with a better score. More than 50% chose bakery products with a B/C rating instead of D/E. However, seven out of ten would still choose a product with a higher Nutri-Score if it had other advantages.
Again, the high cost of living comes into play, with 68% of Europeans saying they would buy more Nutri-Score B products if they were at a reduced price.
The bakery market in Romania
In recent years, more and more Romanian producers in the bakery industry have reoriented themselves towards traditional bread-making methods, using this communication to promote their own products. "The rich taste of yesteryear", "baked in clay oven", with "authentic mayo from the bag", "Grain goodness as it once was" are examples of messages that sensitize the Romanian consumer to pay more attention to what he puts in the shopping basket and convince him of the good taste of the product, but also of the health benefits.
Romanians mainly consume prepackaged bread, a segment that represents almost 80% of the total market, while unpackaged bread holds just over 20%, as data from the RetailZoom analysis company reveal.
Prepackaged bread sales increased by 32% in value and 7% in volume between April 2022 and March 2023 compared to the previous 12 months.
White bread stands out clearly in buyers' preferences, accounting for over 70% of the sales volume and value. The other types of prepackaged bread - black, wholemeal, rye, graham and others - divide the rest of the market.
All the data RetailZoom shows a bread market in which local or regional producers occupy significant positions. Retailers' own brands have an important share in the prepackaged bread sector, holding shares slightly above 10%, both in value and volume. The big manufacturers - those with national coverage - barely reach 50% of sales (even less in volume), and their brands hold approximately 40% of the market.
Article written by Gabriela Dan, Editor of Arta Albă
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