Bakery products are becoming increasingly popular among consumers in the People’s Republic of China (PRC), according to the Frost & Sullivan Report.
The report shows significant growth in the retail sales value of bakery products in China. From 2015 to 2020, sales rose from approximately $24.3 billion to $31.85 billion. This represents a compound annual growth rate (CAGR) of 5.6%.
Above all, this growth was driven by key factors. Rising disposable incomes, the popularity of Western pastries, and higher per capita consumption of bakery products in the PRC played essential roles during this period.
Looking ahead, the economic outlook remains optimistic. The 13th Five-Year Plan for National Economic and Social Development highlights the potential for continued growth. Furthermore, increasing consumer demand for bakery products is expected to support this trend.
As a result, the retail sales value of bakery products in the PRC is projected to grow at a CAGR of 5.7%. By the end of 2025, sales could reach approximately $42.34 billion.
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 operate from a central factory. They produce their goods there and deliver finished products to chain stores or retail outlets for sale.
This model often results in lower manufacturing costs. However, the shelf life of these products is limited, typically lasting only three to five days.
On the other hand, some manufacturers produce semi-finished products in a central factory. These products are then sent to stores for further processing, such as baking, garnishing, or packaging. As a result, bakery items prepared this way are fresher, since they are finished just before being displayed.
Additionally, some manufacturers create designated production areas within their stores. This approach ensures the highest quality and freshness of bakery products. However, it requires more labor, making it the most expensive production model of the three.