Chinese bakery and cereals sector set to boom

The bakery and cereal sector in China is expected to grow by nearly US$15 billion between 2012 and 2017, according to new research from Canadean.

While not part of a traditional Chinese diet, products like breakfast cereals, cakes and cookies have become increasingly popular with consumers in the last decade.

As China becomes increasingly globalised, consumer incomes and living standards are rising, especially among middle-class consumers. The consumption patterns of the middle class and Chinese youth have shifted towards a preference for westernised bread and baked products.

The Chinese urban population is forecast to reach 800 million by the end of the decade, which will further drive demand for bakery products, sales volumes of which will exceed 12 billion kg by 2017.

According to Canadean, the future is bright for the bakery and cereals sector in China. The already robust growth of the market, which has seen per-capita retail consumption almost double in the past decade, reached 7 kg per capita in 2012.

Canadean’s data indicates that in the period up to 2017, the market will increase at a CAGR of 9.20% in value terms and 6.85% in volume terms. As the economic changes initiated by the country’s new leadership allow increased foreign investment, American and European companies will find it easier to enter the Chinese market. This will be supported by consumers who trust the safety and health connected to foreign products, following a number of domestic food safety scandals in recent years.