“Asian countries have significant consumption rates in basic bakery products such as bread, pasta, and biscuits because of the traditional consumption culture. Asian countries are therefore considered to be an important potential market for investors producing these products and the technologies used in the production of these products. But the ability of investors to evaluate these potential markets accurately depends on their capacity to analyze these people’s consumption habits and cultures and to produce solutions accordingly.”
Asia is the largest continent in the world, both geographically and in terms of population. The continent is home to more than half of the world’s population, covering an area of 17 million 212 thousand kilometers. Asia is home to many countries including China, India, Russia, Turkey, Iran, Pakistan, Malaysia, Maldives, Singapore, Bahrain, Brunei, Palestine, Cyprus, Lebanon, Qatar, Kuwait, Israel, Armenia, Taiwan, Sri Lanka, Georgia, United Arab Emirates, Azerbaijan, Jordan , South Korea, North Korea, Tajikistan, Nepal, Bangladesh, Cambodia, Syria, Kyrgyzstan, Laos, Philippines, Oman, Malaysia, Vietnam, Japan, Iraq, Uzbekistan, Turkmenistan, Thailand, Yemen, Afghanistan, Myanmar, Indonesia, Mongolia, Saudi Arabia, and Kazakhstan.
In terms of the area covered, the world’s largest countries are located in Asia. Russia, the largest country in the world, covers an area of 6.592 million square kilometers, equivalent to 38.63 percent of the total area of the continent, and is also the largest country in Asia. China is the second largest country in Asia, covering 3.705 million square kilometers. India is the third largest country in Asia with an area of 1.269 million square kilometers. The five smallest countries in Asia are Palestine, Brunei, Bahrain, Singapore, and the Maldives.
It is estimated that Asia’s total population is over 4.5 billion. The five largest countries in Asia, from large to small, are China, India, Indonesia, Pakistan, and Bangladesh. China, which is estimated to have a population of about 1.3 billion, is Asia’s biggest country in terms of population, representing 31.35% of Asia’s total population. I believe it would not be wrong to say that pasta and noodle are the most consumed product on the continent with such a large population.
Asian countries have significant consumption rates in basic bakery products such as bread, pasta, and biscuits because of the traditional consumption culture. Asian countries are therefore considered to be an important potential market for investors producing these products and the technologies used in the production of these products. But the ability of investors to evaluate these potential markets accurately and well depends on their capacity to analyze these people’s consumption habits and cultures well and to produce solutions accordingly.
In Central Asian countries, foods prepared with wheat and its products have an important place in consumption habits, and the taste of these people is often very similar. In Central Asian countries where the dough and meat have dominance, traditional dishes known as ravioli (steam ravioli), cooked rice (Uzbek cooked rice), and filled pastries (Tatar filled pastries) are widely consumed. Noodle can be described as hamburger of Asia. Noodle represents the fast-food culture in Asia, where noodle can be consumed in large plates with various types of sauces. There has been evidence that varieties of noodle have been consumed in China for thousands of years.
Presently, demand for the pasta sector has been gaining popularity in India, especially because of the young population as well as the expansion of food service restaurants. The pasta market in India grew by 17.1 percent on average in the period 2010-2017 and reached USD 286.6 million in sales in 2017. Increasing urbanization in India, the start of changing lifestyles, and the growing demand for the consumption of ready-made products are the main factors driving the growth of the pasta market. The market has been divided in dry pasta, ready-to-eat pasta, and fresh pasta on type-base. In the Indian pasta market, dry pasta products constitute the large share of the market.
Global pasta and noodles market was 62.5 billion dollars in 2017. The market is expected to reach USD 121.63 billion by the year 2026, growing by an average of 7.68 percent each year. Pasta and noodle have long been an important part of the diet in countries like China and Japan.
Catching on like wild fire, the hipster culture boosted the numbers of bakeries and cafés in Asia Pacific and this change impacted consumers’ choices for baked goods. The growing awareness and preference of Western-style bakeries in Asia Pacific accounted for 76 percent of volume growth in pastries over 2008-2013 while cafés have witnessed a three percent value growth in 2015 to reach $2.2 billion.
Due to urbanisation and increased disposable income, consumers now enjoy novelties of baked goods and are willing to pay a higher price for them. The strong presence of artisanal retailers such as Bread Talk and Four Leaves in Asia Pacific ensures consumers can easily access artisanal baked goods. The expansion of new boutique bakery stores also contributes to the better performance of artisanal retailers.
With the new found sophistication in consumption patterns, consumers hunt for ‘instagrammable’ desserts to beautify their social media posts. The majority of consumers consider artisanal retailers to offer high-quality products and continue to innovate with new flavours. Retailers cater to these ideologies by coming up with unique desserts while ingredient manufacturers tap into the trend by creating product ranges tailored for artisanal users.
THE ABILITY TO CUSTOMISE
With the need to face fierce competition among the other establishments, there is an increase in demand of customisable raw materials which retailers can use to create unique desserts/pastries that they can truly call their own. There is no doubt that chocolate manufacturers have to jump on the wagon and adapt their formulations towards the demands of consumers.
These demands can comprise that for the right ingredients, right intensity and the right aroma to create the desired taste. Personalisation, a big thing in the consumer industry as well at present, should also be possible for consumers, including customisations such as single origin, no added sugar, or soya substitutes.
Health is a big trend in food. The growing global burdens of obesity and diabetes prompt consumers to question their habits. Medical researchers have linked sugar overconsumption to diabetes, cardiovascular disease, and hypertension.
Globally, an estimated 422 million adults were living with diabetes in 2014, compared to 108 million in 1980. High levels of consumer awareness of diabetes triggered the increase in diabetic bakery retail sales in Asia Pacific.
Ingredient manufacturers are expected to constantly develop innovative and healthier variants in order to cater to the increase of general health consciousness. Manufacturers have thus begun altering formulations to include less or no sugar, sugar alternatives such as stevia or sucralose, or other ingredients such as fibres with a sweet taste; these ingredients therefore do not compromise the taste of original products, but contribute to a healthier as well as diabeticfriendly range of bakery products.
SMALL IS KEY
Artisanal bakery shops and boutique bakery stores tend to buy ingredients in smaller volumes due to the scale of their businesses and preferences for smaller packaging sizes so as to maintain freshness in their ingredients. Ingredient manufactures have to ensure products are packaged appropriately and in line with current trends, but many have production machines that only produce a single packaging format, causing them to lose out to competition.
The importance of rightsizing is the key to win. For example, with one of the brands by Aalst Chocolate which serves the food industry, they have invested heavily in the production line for these smaller packaging and maintain freshness by working with their supplier to determine the best material to use for individual packaging.
This enables them to create smaller yet ‘freshness guaranteed’ packaging options to the retailer to satisfy the market. Retailers can hence have the flexibility of portion control without the pressure of ordering a huge minimal quantity.
QUALITY AND FOOD SAFETY FOR THE BEST
As competition intensifies in the bakery segment, everyone is looking to differ from others in terms of taste and appearance and believe the relative importance of value-added and quality. Competitors are always looking to get ahead of the market and constantly improve their product ranges.
To create the best desserts and pastry, ingredients are the key; choosing and meeting the right suppliers (even if they reside on the opposite half of the globe) can make a world of difference, and food safety should still be a priority. Purchasing manager of Aalst Chocolate Esther Lim commented: “Some of our suppliers do have agents or distributors in Asia, however it’s best for us to head directly to the principal to look and taste their full product range of ingredients, and also check if their facilities are certified. Food safety is always the primary concern for us.”
“It is imperative to act responsibly in order to meet both present and future demand,” emphasised Richard Lee, the company’s founder and chief executive officer. With a broad network of suppliers in key cocoa-growing regions, the company can ensure a reliable supply chain even in unforeseeable complications.
LOOKING INTO THE FUTURE
The bakery segment does not look to slow down anytime soon in the near future especially in Asia. Sales of bakery products in Asia are likely to increase twofold due to regional economic growth and the accompanying increase in purchase power according to Euromonitor International research.
With more emerging markets growing economically and their middle class consumer numbers on the rise, bakery products, which are still seen as luxurious foods in some places, will likely be in high demand. However, as consumers are becoming more aware and educated of the importance of health, ingredient and bakery manufacturers need heed the current consumer trends of using healthier and natural ingredients in order to stay competitive in the market.