Market Challenges And Opportunities

Restraints & Challenges:

High capital investment for production and supply chain infrastructure
Short shelf life of products

Market Drivers:

Increasing demand for convenience food products: The global demand for convenience food products has been steadily rising in the past few years due to changing lifestyles and busy schedules of consumers. People now prefer food items that can be easily prepared and consumed in a short span of time. Frozen pastries fall under the category of convenience foods as they can be stored for longer duration in freezers and also cooked quickly when needed. With an increasing preference for convenient breakfast and snacking options, the demand for frozen pastries is accelerating significantly. Various international organizations, such as the United State (UN) and Food and Agriculture Organization (FAO), have reported in their 2021 studies that the average time spent on meal preparation per household has reduced by 15-20 minutes in the past five years globally due to more women joining workforce and hectic lifestyles. This has boosted the sales of semi-prepared and ready-to-eat frozen foods including frozen pastries. The trend is particularly prominent in developed economies where dual income households are common. The pandemic further reinforced this trend as more people started working from home and valued convenience foods for their busy schedules.

Increasing working population: The market is experiencing significant growth, driven primarily by the growing working population worldwide. As more people are entering the workforce and spending longer hours at jobs, they have less time during the day to prepare fresh bakery items and meals from scratch at home. Frozen pastries are an easy and convenient option that can be stored in freezers and consumed as a snack or part of a meal on busy weekdays.

The trend of nuclear families and dual-income households is also fueling the demand for frozen pastries. When both spouses are employed full-time, they look for food options that save time on daily meal preparation without compromising on taste or quality. Busy lifestyles and hectic schedules leave less time for baking, which is why consumers are turning to frozen alternatives. According to the sUN Department of Economic and Social Affairs data from 2020, approximately 47% of the global population was employed, highlighting the need for convenient, ready-to-eat foods.

Increasing demand for baked goods as snacks

This rising preference for frozen pastries as snacks is the key driver propelling the market. According to the UN Food and Agriculture Organization, the global per capita consumption of sweet baked goods increased by 15% from 2012 to 2020. The demand spiked further during the pandemic as people stayed home and spent more time snacking. The variety of options available, such as cookies, doughnuts, pastries, etc., in frozen form, allow people to satiate their cravings without much effort.

Market Opportunities:

Innovation in product offerings and packaging: Innovation in product offerings and innovative packaging could significantly leverage opportunities in the market. As consumers are becoming more health conscious and demanding higher quality products, innovative products like vegan/plant-based pastries, pastries with functional ingredients, and organic options could drive the market growth. Products with added fiber, vitamins, minerals, and protein delivered through pastry snacks can offer added health benefits. This will appeal to newer consumer bases as well as offer manufacturers opportunities for premiumization.

Moreover, introducing pastries that cater to diverse ethnic cuisines, regional tastes, and dietary requirements, including gluten-free, and sugarfree options will make the existing offerings more versatile to changing preferences. For instance, Asian bakery companies are launching offerings infused with Asian flavors like green tea, red bean, coconut, etc. According to the United Nations World Food Programme (WFP) report released in 2020, frozen breads and bakery products are gradually becoming mainstream in Middle Eastern markets as well, due to changing work dynamics and sedentary lifestyles. Innovation in formats like bite-sized pastries and easy to eat on-the-go packaging will further aid market expansion in such regions.

Growth in emerging economies: The emerging economies in various developing regions present a huge growth opportunity for the market. As incomes rise in countries such as India, Indonesia, Brazil, and Nigeria, consumption patterns are evolving rapidly. More people now have the discretionary spending power to consume processed and packaged food products outside of basic daily needs. This includes a growing demand for bakery items and western-style snacks.

Many urban households in these emerging nations aspire for quality packaged food that offers convenience without compromising on taste. Local pastry makers are also innovating products suitable for tropical climates and developing distribution channels to pique cities and towns.