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Poor outlook for Japan's baked goods market

The Japanese bakery and cereals market is expected to slow down over the next few years in terms of retail sales and product launches, according to

Citing research from Datamonitor, the report said Japan’s biggest bread maker Yamazaki reported stagnant 2010 net sales.

Datamonitor analyst Varun Kumar told that, globally, Japan is “at the bottom of the ladder” in terms of bakery sales growth with an estimated CAGR of only 1% for the next five years, whereas countries such as India and China rank highest with 11% and 10% estimated CAGR over the next five years.

In its recently published 2010 financial results, Yamazaki posted 615 billion yen (NZ$9.8 billion) in net sales for its non consolidated division, with bakery products comprising over 50 % of this.

In terms of new products launched, the Japanese bakery and cereals market has also seen a drop in its global ranking from the seventh place it occupied in 2009 to tenth place in 2010, said Datamonitor.

Meanwhile, despite the overall decline, the growth of functional bakery and cereals market has been “very optimistic” in the region said the market specialists. This was reflected in the rise in contribution of new functional bakery and cereal products by 10% in 2010, as opposed to just 7% in 2009.

According to a report from market research group, Euromonitor, packaged/industrial bread saw the fastest volume growth in the Japanese bakery and cereals sector in 2010 - at 2%. This was followed by packaged/industrial pastries, which saw volume sales increasing by 1%.

Unpackaged/artisanal bread and pastries saw volume declines of 3% and 1%, respectively.

According to the report, white bread continues to be the most popular choice among consumers. The main reason is its being affordable, considering the unstable economy and conservative spending patterns of consumers. It is also the most flexible type of bread, as it can be consumed in various ways. – Article by: