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Bakery Houses - China - May 2021

OVERVIEW
What you need to know
Key issues covered in this Report
Covered in this Report
EXECUTIVE SUMMARY
The market
The market needs two years to buffer out the disruption
Figure 1: Central forecast for value sales of bakery houses, 2015-2025
Volume shrank to a total outlet number of around 450,000
Figure 2: Change in the number of bakery houses, 2019-2020
Figure 3: Top ten cities by the number of bakery houses, 2020
Companies and brands
Fragmented market with leading players scrambling to secure concentration
Figure 4: Store numbers & volume share of the leading bakery house brands, 2019-2020
Sight attraction prompts bakery houses to spruce up differently
Novel dairy products and plant-based ingredients pick up the trends
The consumer
Fixed channel selection with an exception of O2O retailers
Figure 5: Purchase channel, 2020-21
Fresh bakery dabbles in a bigger market to compete
Figure 6: Product preference at different channels, February 2021
Wide compatibility with various occasions
Figure 7: Consumption occasion, February 2021
Distinctive perceptions hint usage segmentation
Figure 8: Product perception, February 2021
Quality ingredients with functional perks able to justify high price
Figure 9: Premiumisation trigger, February 2021
Behavioural difference suggests specialised trajectory for specialty and comprehensive bakery houses
Figure 10: Attitudes towards bakery products and bakery houses, by “I prefer bakery houses that sell specialty products over those that sell a wide range of products”, February 2021
Figure 11: Attitudes towards bakery products and bakery houses, by “I prefer bakery houses that sell specialty products over those that sell a wide range of products”, February 2021
What we think
ISSUES AND INSIGHTS
Bakery houses upgrade their menus to stretch into holistic meal offering
The facts
The implications
Enhance bakery houses’ function in “service” and intensify brand awareness to differentiate
The facts
The implications
Figure 12: DIY toast painting at POSTERN
Figure 13: Self-toasting toast at Our Bakery
Specialty bakery houses need to stay exuberantly proactive to survive
The facts
The implications
Figure 14: Collaborative toast between Daddy Sweety and Hema
Figure 15: Saturn bird’s coffee box recycling program
THE MARKET – WHAT YOU NEED TO KNOW
Shattered market will rebound to the pre-COVID level in the next two years
Fresh bakery’s competition landscape broadens
Bakery houses look at additional revenue pathways
MARKET SIZE AND FORECAST
COVID-19 magnified the challenges for the industry
Figure 16: Central forecast for value sales of bakery houses, 2015-2025
The number of eliminated stores overtakes the new one
Figure 17: Change in the number of bakery houses, 2019-2020
Figure 18: Top ten cities by the number of bakery houses, 2020
MARKET FACTORS
Short shelf-life packaged bakery poses a threat and hints transformation for fresh bakery
Figure 19: Hema’s Freshippo Bakery
Bakery houses experiment with different side offerings, exploring new revenue streams
Figure 20: Lady Pineapple’s brunch offering
Figure 21: Sunflour’s brunch and gelato offerings
Figure 22: Paris Baguette’s lactobacillus tea drinks
Rising home baking brings mixed news
Functionality and nutrition are the key to premiumisation
KEY PLAYERS – WHAT YOU NEED TO KNOW
Dominant brands have secured consolidation
Bakery houses use different styles to pique interest
Novel dairy products applied to bakery
MARKET SHARE
Holiland contributed the most to leading players’ consolidation
Figure 23: Store numbers & volume share of the leading bakery house brands, 2019-2020
MARKETING STRATEGIES
 HIGHLIGHT NUTRITIONAL ADD-INS TO APPEAL TO HEALTH-CONSCIOUS CONSUMERS
Figure 24: Short shelf-life packaged bakery from Hema daily fresh product line
 BAKERY HOUSES OF UNIQUE ORNAMENTAL STYLES RESONATE AMONG CONSUMERS
Figure 25: Bakery houses of nostalgic style
Figure 26: Japanese-style bakery houses
Figure 27: Examples of representative Japanese bakeries
 SUSTAINABLE DISPOSAL OF LEFTOVER BAKERY CONVINCES CONSUMERS OF FRESHNESS AND ENVIRONMENTAL AWARENESS
Figure 28: Free overnight bakery giveaway at Whole Wheat
Figure 29: Buy one and get one for free after 5 pm at Da Giuliano
NEW PRODUCT TRENDS
 UPGRADED MENU OF CHINESE- AND WESTERN-STYLED BAKERY FOODS
Figure 30: Examples of bakery houses’ Chinese-style bakery/pastry offerings
 FERMENTED AND PLANT-BASED DAIRY WITNESSES A RISE OF USAGE IN BAKERY
Figure 31: Examples of bakery products containing fermented dairy ingredients
Figure 32: Oat milk toast from Tous Les Jours & Oatly
 PRODUCTS OF REGIONAL TRAITS HOOK CONSUMERS FAVOURING EXOTICNESS
Figure 33: Examples of bakery products of regional traits
 BAKERY HOUSES DABBLE IN PACKAGED BAKERY OFFERING TO REPLICATE FRESH BAKERY EATING EXPERIENCE
Figure 34: Uncle.Z Bakery ‘s online store on Taobao & WeChat
Figure 35: Collaborative toast between Daddy Sweety and Hema
THE CONSUMER – WHAT YOU NEED TO KNOW
O2O channels cast a revolutionary impact of fresh bakery purchase
Compatibility of bakery products gets further ramped up
Fortified nutrients have the best shot at triggering higher spending
PURCHASE CHANNEL
Established bakery consumption habits in the post-COVID-19 era
Figure 36: Purchase channel, 2020-2021
O2O retailers squeezing the shares of fresh bakery
Figure 37: Consumption incidence gap in the listed channels, 2020-2021
Growing acceptance means abundant interest and exploration while low loyalty
Figure 38: Purchase channel of bakery products – repertoire analysis, February 2021 & February 2020
PRODUCT PREFERENCE AT DIFFERENT CHANNELS
Blurred boundary between fresh and packaged bakery products
Figure 39: Product preference at different channels, February 2021
Unconventional buyers at bakery chains and O2O retailers
Figure 40: Product preference at bakery chains – “short shelf-life packaged bakery products”, by gender and age and by marital status, February 2021
Figure 41: product preference at O2O retailers – “fresh unsealed bakery products”, by gender and age and by marital status, February 2021
CONSUMPTION OCCASION
Diverse usage of bakery products
Figure 42: Consumption occasion, February 2021
Breakfast bakery eaters fall for “additional” instead of “minus” claims
Figure 43: Premiumisation trigger, by consumption occasion – “have had bakery products for breakfast”, February 2021
Figure 44: Consumption trends, by consumption occasion – “have had bakery products for breakfast”, February 2021
Figure 45: Consumption trends – “eaten more or about the same”, gap between those who have had bakery products for breakfast and those who haven’t, February 2021
Bakery products applied to more consumption occasions
Figure 46: Consumption occasion – repertoire analysis, February 2021 & February 2020
PRODUCT PERCEPTION
Toast can become a staple alternative while tarts and Swiss roll leverage indulgence
Figure 47: Product perception, February 2021
Hard bread and cake are polarised in specific perceptions
Mid-aged females & high income earners credit hard bread for healthy
Figure 48: Product perception – “hard bread is healthy”, by gender and age & monthly personal income, February 2021
Mid-aged consumers & families with kids think cake is satiable in particular
Figure 49: Product perception – “cake is satiable”, by age & marital status, February 2021
PREMIUMISATION TRIGGER
Resort to ingredients and thereby “additional” claims to premiumise and differentiate
Figure 50: Premiumisation trigger, February 2021
Mid-aged consumers focus on ingredients while young consumers are flavour-/display-driven
Figure 51: Premiumisation trigger, by age, February 2021
ATTITUDES TOWARDS BAKERY PRODUCTS AND BAKERY HOUSES
Well-educated domestic bakery consumers with distinctive features
Figure 52: Attitudes towards bakery products and bakery houses, February 2021
Attitudinal divergence between specialty store- and comprehensive store-oriented consumers
Figure 53: Attitudes towards bakery products and bakery houses, by “I prefer bakery houses that sell specialty products over those that sell a wide range of products”, February 2021
Figure 54: Attitudes towards bakery products and bakery houses, by “I prefer bakery houses that sell specialty products over those that sell a wide range of products”, February 2021
APPENDIX – MARKET SIZE AND FORECAST
Figure 55: Forecast for value sales of bakery houses, China, 2015-2025
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations

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