South East Asian Bakery Consumers Place Strong Value on Quality and Safety

This quarter, Mintel looks at the latest areas of growth and development in the South-East Asian bakery market. Mintel’s research finds that despite low existing per capita consumption levels for bakery in the region, the market will see continued strong growth in coming years as consumers seek out better-quality products.

By Chris Brockman, Research Manager, Food and Drink, EMEA Region – Mintel

In particular, premium attributes and naturalness are being conveyed strongly in bakery New Product Development in the region, and through the growth of Western-style bakery cafés, reflecting the desire for upgraded quality. Furthermore, Mintel’s research finds that food safety and quality assurances are especially important in Vietnam, where growing consumer incomes will open up the market for a more premium bakery offering.

South-East Asian bakery market sees explosive growth

With consumption stalling, or even in decline, in many of the world’s largest packaged bread markets, the growth being seen in both bread and sweet bakery consumption in emerging markets such as South-East Asia is significant. This is especially so, given the low existing levels of bakery product consumption per capita in this region and therefore the tremendous scope for long-term growth.

In Indonesia, for example, bread consumption was measured at just 0.9kg per capita in 2013 and sweet bakery consumption at less than 0.1kg. Compare that to the most developed market in Asia, Japan, at 7.4kg for bread and 4.8kg for sweet bakery.

Consumer desire for quality attributes shapes innovation

Behind halal (important for Indonesia and Malaysia, especially) and seasonal (many of the region’s sweet bakery markets being dominated by Moon Cake for the mid-Autumn festival), the next two leading claims in bakery products are no additives/preservatives and premium. There has been a consistently high use of the claims in new launch activity, averaging around one in 10 new products in each case in recent years.

Safety assurances are especially important in fast-growing Vietnam

Vietnam is the bakery market that is expected to see the strongest growth in the South East Asian region. It is particularly interesting to note the importance of food safety here, as it has been one of the most recognized consumer concerns in Vietnam in recent years, when the country has suffered a number of food safety scares. This is pushing demand for safety and high quality assurances, which will benefit bakery products that can convey such messaging. Given rapidly growing average incomes in Vietnam, Vietnamese people in general can also now afford better-quality products facilitating further new product developments and choices. A national campaign “Vietnamese people use Vietnamese products” enhances consumers’ views of locally made products. However, foreign products are still often more appealing than local offers, given the quality and safety concerns.

You can read more on Spring Issue of our print magazine Asia Pacific Baker!