Home bakers rise to fresh challenges

Expanded presence

The pandemic has resulted in many bakeries closing, either temporarily or permanently. A number of companies have seized the opportunity to expand their presence in the home baking market.

Kengee, a chain headquartered in Wuhan since 2005, closed its 400-plus bakeries nationwide in late January. It has moved business online and launched a baking-at-home campaign.

Customers can buy the company's products via the shopping platforms Tmall and JD, on-demand delivery platform Ele.me and social networking app WeChat.

Lu Wei, the company's chairman, said at a recent Bakery China cloud-sharing event that to meet demand, the chain has released some semi-finished products, such as croissants and puff pastry. These can be placed directly into an oven, with simple instructions provided about cooking time and temperature.

Lu said home baking is a future trend for the industry, adding, "The coronavirus has changed people's views about this topic, and this will continue after the crisis."

Launched in 1997, Bakery China is an annual trade fair held in Shanghai in May by the China Association of Bakery and Confectionery Industry and Bakery China Exhibitions Co. Due to the pandemic, this year's event has been postponed to next month.

Liao Zhuqun, deputy director of the association, said the number of home bakers will surge, prompting companies to invest in and develop better ingredients and other products.

Commercial bakeries offering Western-style birthday cakes, Danish pastries and shortbread began operating on the Chinese mainland in the 1980s and '90s. Well-known chains such as Holiland and Christine were both founded in 1992, and the market began to boom in the first decade of this century.

According to market research company Euromonitor, in 2017, each Chinese consumer bought 6.7 kilograms of bakery products on average, compared with 4 kg in 2009. In 2017, the world average for purchases of such products was 18.7 kg.

China's bakery sector has developed rapidly, with the younger generation influenced by overseas eating trends and the rapid pace of urbanization.

Data from Shanghai market research company Daxue Consulting show that more than 80 percent of bread and cake buyers in the country were born in 1980 or later, with younger people opting for bakery products for breakfast or afternoon tea.

Thibaud Andre, a French consultant working for the company, said consumers have taken to Western bakery products, with demand growing steadily.

The pandemic has fueled such demand. In the first quarter of this year, domestic bread maker Taoli generated turnover of more than 1.3 billion yuan ($182.5 million), a rise of 16 percent year-on-year.

Industry experts estimate that the bakery sector will maintain growth of close to 10 percent in coming years.

Li Ying, a partner at Z&H Investment in Beijing, said that although the domestic baking sector has experienced temporary closures due to COVID-19, he is optimistic about its future.

"In terms of market demand and development, China's bakery sector is a burgeoning business, which is expected to hit billions of yuan," Li added.