Slash sugar, fat and calories and you’ll win with consumers: European bakery leaders weigh in

By Gill Hyslop

- Last updated on GMT

European bakery businesses see the reduction of sugar, fat and calorie content as the leading drivers of growth next year. Pic: GettyImages/studartbur
European bakery businesses see the reduction of sugar, fat and calorie content as the leading drivers of growth next year. Pic: GettyImages/studartbur

Related tags Tate & lyle Mintel Health and wellness sugar reduction calorie reduction Fat reduction European union free from Trends Bakery industry

Sweet treats with a reduced sugar, fat and calorie content will be the top drivers of business growth going forward, aligned with the heightened consumer interest in their wellbeing, according to research by Tate & Lyle that includes exclusive commentary from Mintel.

The global ingredients provider said recent research found 73% of European bakery manufacturers placed the reduction of sugar, fat and calories at the forefront of business growth next year.

The European Bakery Industry Report​ – which is free to access – also revealed that 54% of industry professionals see the ‘free from’ niche buoying the market next year, while 48% believe an improved product-consumption experience will be the biggest influencer among shoppers.

According to Katya Witham, global food and drink analyst at Mintel, the pandemic has, without a doubt, created huge challenges for the bakery sector – but it has also been a catalyst for huge opportunities.

“These are both immediate with many businesses thriving from agilely adapting to new consumer needs and in the long-term as the crisis will leave a number of lasting legacies,”​ said Witham.

The leading drivers of growth

Tate & Lyle’s survey – conducted among senior bakery professionals across Europe – revealed that calorie reduction will be the leading criteria of better-for-you innovation prioritised by 74% of businesses next year.

However, 71% of respondents say they will be placing sugar reduction at the forefront, while 54% cite fat reduction as the factor that increasingly health-motivated consumers will seek out first.

However, it’s not only about reduction, as more than half of the respondents believe consumers are also more likely to choose products that offer additional nutritional benefits, such as added protein and fibre.

More than two fifths say a substantial proportion of consumers are willing to pay more for healthier snacks, while 34% content consumers are increasingly looking beyond the labels on products for details of nutritional contents.

“More and more people are looking for ways to stay healthy and improve their wellbeing, a trend that has been building for a while and continues to grow,”​ said Olivier Kutz, category development manager, Tate & Lyle

“Paying more for products with enriched nutritional benefits has accelerated, as consumers gain interest in, and understanding of, exactly what is in the products they buy.

At home baking

“A heightened awareness of healthier diets and the long-term health implications of the Covid-19 pandemic has also meant people spending more time at home and taking up baking as a hobby are wanting to use healthier products where possible,” ​added Kutz.

Following the pandemic’s outbreak, the majority of bakers saw a fall in demand for products across the convenience retail (40%), wholesale (42%) and fresh bakery (53%) channels, with much larger reductions in the travel (79%) and out-of-home (89%) channels. The grocery retail was the only channel where businesses saw an overall increase in demand, with half (50%) saying demand has grown.

As expected, cost optimisation across the supply chain and managing cash flow, cited by 46% and 45% of businesses respectively, have been the top strategies of those looking to counter the impact of Covid-19.

However, 37% say they are now concentrating on new product development to support business recovery, with another 36% prioritising product reformulations in line with current trends to drive consumer demand.

“As with many sectors, bakery has found itself heavily impacted by the rapid onset of the Covid-19 pandemic,”​ added Will Ballantyne, technical manager, Bakery, Tate & Lyle Europe.

“But we see a positive picture here with the industry adapting and adjusting to remain profitable and boost sales. It’s encouraging to see bakery businesses working hard to understand consumer demand and putting steps in place to ensure future growth and resilience.”

The European Bakery Industry Report was commissioned by Tate & Lyle to capture the current challenges and opportunities seen across the bakery industry, alongside the long-term market trends.

The proprietary research was conducted among 400 senior bakery professionals (middle-management and above) in production, sales, R&D, HR and marketing in the UK, Germany, France and Spain in July 2020 by a full service, end-to-end B2B research agency.

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