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Bakery and snack markets moving east

October 5, 2012
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Baked goodsWith world population growth shifting toward emerging markets, such as the Asia Pacific region, it’s no surprise the bakery and snack market is growing faster globally than in the US, according to the PMMI report, Bakery and Snacks—Market Assessment 2012. The shift is good news for OEMs marketing equipment to food processors in these growing markets.

The bakery and snacks market report notes bakery and snack products manufacturers will see growth—with 4 percent growth predicted in US sales of packaged snacks through 2015, but 7 percent annual growth to $334 billion in global sales of snack foods in the same period. Globally, bakery product sales are expected to increase 4.5 percent annually to $410 billion by 2015.

“Globally, regions such as Asia Pacific, Latin America and India are presenting the best scenarios for future growth for snacks and bakery products,” says Paula Feldman, PMMI director of business intelligence. “Our global packaging report noted that by 2015, world population growth will spring largely from the Asia Pacific region, which is expected to see a 160 billion person increase in that time.”

Today, the US is the world’s largest market for snacks, while European markets top the list for baked goods sales. And while 62 percent of the snack food companies surveyed for this market assessment see Asia Pacific markets as the source of the largest fraction of their sales growth, only 20 percent of bakery companies share that experience.

Custom packaging the norm

In the past, changes in consumer eating habits have driven new product development. But in 2012, the driving force has shifted to the retailer. Many large merchants have their own specifications for the products they carry, says Feldman. “In the bakery and snack food arenas, retailers are specifying package sizes, multi-packs and variety packs to optimize shelf space, and they’re asking for retail-ready packaging for high-traffic areas,” she adds. “Convenience and drug stores also have their own sets of requirements, and more than a quarter (26 percent) of respondents is developing packaging accordingly.”

Dollar stores are also making a difference. In the survey, 27 percent of participants said they are distributing to dollar stores (and expect that part of their business to grow), and those venues are requesting smaller portions they can sell for $1.00.

Retailer demands were cited by 42 percent of respondents as the main driver for changes to primary packaging, and 50 percent said they’re implementing changes in their processing and packaging operations to accommodate retailers’ requirements.

According to Feldman, processors are turning to packaging machinery OEMs for solutions. “Their requests fall into three categories: functionality, support and integration. The OEM that wants to meet those needs will do best to build a partnership with the manufacturer and collaborate in the design process.”

“Today’s baking and snack foods manufacturers want machines that can be flexible and run a variety of sizes, materials and packages; that are easier to clean and operate, ergonomically designed and reliable. They need OEMs to clearly communicate recommended cleaning schedules and to provide knowledgeable technical support,” says Feldman.

For more information on the study, visit the PMMI website.

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