The Italian pastry market is influenced by the global and local trends, but despite this fact, the forecast until 2021 shows a slow increase of sales and volume, according to Euromonitor which provided useful information to analyze and understand the Italians’ habits when it comes to pastry.
In recent years, baked goods categories have been negatively affected by changes in the consumption patterns of Italians. Manufacturers have responded with various strategies aimed at reviving consumption of different product types. Some players have also sought to provide greater convenience to consumers by offering products in smaller and single-portion pack sizes that can help to avoid spoilage and waste. Companies have also introduced smaller pack and portion sizes in an effort to capitalize on the on-the-go snacking trend, particularly in cakes and pastries.
The retail volume and current value sales posted by baked goods in 2016 declined and were broadly in line with those recorded in 2015. However, the category is expected to show a modest recovery in both respects over the forecast period as retail price competition stabilizes and both branded and private label ranges benefit from new launches (eg. products made with sourdough) and improvements in quality standards.
Bet on Unpacked
Unpackaged cakes were among the strongest performers in baked goods in 2016, with retail volume and current value sales both growing by 2%. It is typically cheaper for consumers to buy unpackaged cakes from in-store bakeries than from patisseries or cafés.
Reverting to Finished Products
During the deepest years of recession, many Italian consumers turned to home baking as a less expensive alternative to purchasing baked goods in retail channels. This strengthened the presence of baking flour products on retail shelves, and also encouraged efforts to improve the quality of such products. At the same time, increased competition among major brands helped to make prices more affordable for consumers. However, as the conditions in the Italian economy have improved and prices have come down, consumers are increasingly reverting back to buying finished products in baked goods instead of baking at home.
Independent Bakeries vs. Chains
Independent bakeries continue to play a major role in baked goods distribution in Italy, as many consumers buy fresh bread from such outlets on a daily basis. Similarly, Italians are increasingly opting to purchase fresh bread and pastries from bakery cafés. The hypermarket channel has lost some ground in baked goods in recent years, as many consumers favor supermarkets outlets due to their smaller sizes and ability to provide a faster shopping experience. In contrast, the expansion of discounters and convenience stores saw both of these channels make modest gains in baked goods distribution towards the end of the review period.
Prospects of the Italian Pastry Market
The baked goods category is expected to show a slightly improved performance in terms of growth in retail volume value sales, by 2021, at constant 2016 prices, according to Euromonitor’s figures.
Packaged pastries look set to be the most dynamic category in terms of retail value sales growth at constant 2016 prices, with a CAGR of 3% predicted. Unpackaged pastries and frozen baked goods are both expected to see value sales at constant 2016 prices grow at a CAGR of 1%, while a more modest constant value growth rate is projected for unpackaged cakes.
Frozen baked goods category is expected to benefit from new launches, including new products from major brands, like Findus.
The latter already offers the Dolce Buongiorno range of microwavable breakfast pastries, and is expected to invest in the development of similarly innovative and appealing products in frozen baked goods towards 2021.
Most baked goods categories are expected to see average unit prices decline moderately in constant value terms over the forecast period. The rates of decline should be tempered as price competition between grocery retailers eases somewhat and more consumers trade up to higher quality products, the analysts advice. Nonetheless, average unit prices in cakes, unpackaged pastries and other categories still look set to fall in constant value terms due to increasing competition and the growing presence of local manufacturers that benefit from lower operating costs.
Grocery retailers will continue to dominate retail distribution of baked goods, with food/drink/tobacco specialists, supermarkets, and hypermarkets set to remain among the most important channels.