Author: Mintel Group Ltd.
Last saved by: HTTP server

Bakery Houses (Responding to COVID-19) - China - May 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Report Scope
EXECUTIVE SUMMARY
The market
Post-COVID 19: a burgeoning market with opportunities and challenges
Figure 1: Forecast of bakery house industry, by value sales, (adjusted for COVID-19), China 2014-24
A dynamic market with various kinds of players
Impact of COVID-19 on the bakery industry
COVID-19 halts the fast growth, but sparks new opportunities
Figure 2: Short, medium and long term impact of COVID-19 on Bakery Industry, May 2020
Companies and brands
Fragmented market led by big names
Figure 3: Volume share & value share of well-known brands, China, 2019
Smaller innovation-driven players flood the market
Figure 4: Taro floss loaf from Fascino Bakery
Figure 5: Cronuts from Woody Baker
The consumer
Bakery chains &amp; hypermarkets dominate the channels
Figure 6: Purchasing channels, February 2020
Conventional purchasing channels appeal to all
Figure 7: Perception towards purchasing channels, February 202
Mainstream products are fluffy and soft
Figure 8: Product penetration, February 2020
Brands have various opportunities in developing new offerings
Figure 9: Interested innovation, February 2020
Leisure time eating overtakes all other consumption occasions
Figure 10: Consumption occasion, February 2020
Future premium space exists for considering consumers’ well-being
Figure 11: Future potential, February 2020
What we think
THE IMPACT OF COVID-19 ON BAKERY INDUSTRY
Figure 12: Short, medium and long term impact of COVID-19 on Bakery Industry, May 2020
Opportunities and Threats
Time to shore up online capacities and build private user pools
Ready-to-bake offerings to become another revenue channel
Raw material shortage results in rising ingredient costs
What we’ve seen so far
Impact on the market
Double-digit growth market freezes in Q1 2020
Figure 13: Forecast of bakery house industry, by value sales, (adjusted for COVID-19), China, 2014-24
Figure 14: Forecast of total value sales of bakery house industry, China, 2014-24
Shifts in consumer behaviour
Consumers increase purchase from hypermarkets/supermarkets
Self-hygiene behaviours hint at a change in bakery food tasters and packaging
Health and stress alleviation become the main focus
How COVID-19 outbreak will reshape the industry
Independent bakery houses may find it harder to survive
Bakery houses forced to better utilise new means to reach consumers
Push product innovation and in-store service
Impact on the marketing mix
Consumers dying to see more value for money options
Figure 15: Impact from COVID-19 on selected factors in China, 27 May - 3 June
Compete and cooperate with new selling channels
Figure 16: BreadTalk products sold at FamilyMart China
Figure 17: Fuwa Fuwa products sold at FamilyMart Philippines
Bonding with consumers by rendering bread/cake making more fun
Portable packs of bread and drinks to become more common
COVID-19: China context
Figure 18: Accumulative confirmed cases of COVID-19 in China, January to May 2020
Figure 19: Status of returning to work, China, March to May 2020
ISSUES AND INSIGHTS
Bakery chains can grab a slice of the action at meal occasions
The facts
The implications
Find ways to innovate with beverage or milk flavours
The facts
The implications
Add choices with better value for money in lower-tier cities
The facts
The implications
Figure 20: Differently-priced garlic-flavoured baguette from Tous les jours’s stores in Shanghai and Chongqing
THE MARKET – WHAT YOU NEED TO KNOW
Fast growing market cools amid the COVID-19 pandemic
Boundaries of the market continue to expand
Market has potential to grow larger
MARKET SIZE AND FORECAST
Spending on bakery products rises at double-digit rate annually over the last five years
Figure 21: Total market values sales, China, 2015-19
The market takes a battering from the COVID-19 outbreak
Figure 22: Forecast of bakery house industry, by value sales, (adjusted for COVID-19), China 2014-24
MARKET FACTORS
Accessibility increases – more channels joining the market
Competition brings more product formats/types
The trend of “snacking on everything”
Uncertainty in the recovery after COVID-19
KEY PLAYERS – WHAT YOU NEED TO KNOW
Bakery chains-led market with plenty of room for other players
Players luring more consumers with various approaches
Innovation becoming bolder and wilder
MARKET SHARE
Established brands showcase robust ability to cash in amid the fragmented market
Figure 23: Volume share & value share of well-known brands, China, 2019
85°C Bakery Café recovers from scandals well
Figure 24: Crossover handbags between 85°C Bakery Café and Strange Cat Family
Unconventional bakery product providers not a threat yet
Figure 26: Soft European bread from bakery houses
COMPETITIVE STRATEGIES
Upgrading consumption experience – different businesses pulling off different tactics
Figure 27: Wedome’s Tmall store and its online ordering system on WeChat mini programs
Figure 28: Wedome’s first automated smart store in Beijing
Figure 29: Wedome’s facial recognition cashier
Figure 30: Examples of Heytea & Lelecha’s themed stores
Boutique bakery houses emerge in the market
Figure 31: Toast with milk tea bubbles and cream in Sihu Fresh Toast
Figure 32: Claimed red bean toast in Daddy Sweety
Bite-sized products to take up more physical and virtual shelf space
Figure 33: Paris Baguette’s snack offerings
WHO’S INNOVATING?
Bold combinations of ingredients sweep the market
Figure 34: Taro floss loaf from Fascino Bakery
Figure 35: Red wine longan walnut from Sunflour
Figure 36: Toast with milk tea bubbles and cream in Sihu Fresh Toast
Figure 37: Mugwort herb injeolmi from Our Bakery
Creative Western bakery products inspire the domestic market
Figure 38: Cronuts from Woody Baker
Local dairy firm participates in the market
Figure 39: Bread made of fresh milk & yogurt from U Bakers
THE CONSUMER – WHAT YOU NEED TO KNOW
Consumers’ increasing awareness of health benefits
Bakery houses need to shore up presence beyond tier one cities
Exotic products have to target the niche markets precisely
PURCHASING CHANNELS
Bigger players continue to dominate the market
Figure 40: Purchasing channels – “bakery chains & bakery section in hypermarkets/supermarkets”, by family structure, February 2020
Female-fuelled purchasing power at coffee houses
Figure 41: Purchasing channels – “coffee houses”, by age & gender, February 2020
Far fewer consumers in eastern China visit independent bakery shops
Figure 42: Purchasing channels – “independent bakery shops”, by Region, February 2020
PERCEPTION TOWARDS PURCHASING CHANNELS
Bakery chains and hypermarkets/supermarkets impress consumers most
Figure 43: Perception towards purchasing channels - “bakery chains & bakery section in hypermarkets/supermarkets”, February 2020
Tea shops earn better reputation among young consumers
Figure 44: Perception towards purchasing channels – “tea shops”, by age, February 2020
Divergent perceptions of hypermarkets depending on city tiers
Figure 45: Perception towards purchasing channels – “bakery section in hypermarkets/supermarkets”, by city tier, February 2020
PRODUCT PENETRATION
Consumers’ craving fluffy and soft bakery products
Figure 46: Products penetration – “cake & soft bread”, by monthly household income, February 2020
Novel Westernized baked goods need time to adapt
Figure 47: Products penetration – “hard bread and roll & doughnuts”, by purchasing channels, February 2020
Consumers in tier two and three cities are catching up with trends
Figure 48: Products penetration – “pie/tart & cream puff”, by city tier, February 2020
INTERESTED INNOVATION
New-flavour bakery products lie ahead
Figure 49: Interested innovation, February 2020
Figure 50: Interested innovation - “herbs/spices as flavour”, by city, February 2020
Nut-related ingredients to become the next add-in for bakery products
Figure 51: Interested innovation – “cereals & seeds and nuts as real ingredients”, by generation, February 2020
Savoury bakery products with meat could become the new favourite
Figure 52: Interested innovation – “meat as real ingredients”, by monthly personal income, February 2020
CONSUMPTION OCCASION
Snacking on bakery products
Figure 53: Consumption occasion - “during leisure time”, by family structure, February 2020
Hard bread and rolls preferred during workouts
Figure 54: Consumption occasion of consumers eating hard bread and roll, February 2020
FUTURE POTENTIAL
Consumers willing to pay more for products good for gut health
Figure 55: Future potential, February 2020
Figure 56: Future potential – “good for gut health”, by family structure, February 2020
Low FODMAP formulation becomes a premium factor for some consumers 
Figure 57: Future potential – “layered yeasted bread & pie/tart”, by product penetration, February 2020
MEET THE MINTROPOLITANS
Consume more bakery products than the other groups
Figure 58: Products penetration, by consumer classification, February 2020
More attracted to coffee houses
Figure 59: Purchasing channels, by consumer classification, February 2020
APPENDIX – MARKET SIZE AND FORECAST
Figure 60: Forecast of bakery house industry, by value sales, (adjusted for COVID-19), China, 2014-24
Figure 61: Forecast of total value sales of bakery house industry, China, 2014-24
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Forecast methodology
Abbreviations

This report is supplied in accordance with Mintel's terms and conditions.  
© Mintel Group Ltd.