Baking Ingredients Market by Product, Application, Distribution Channel, & Region for 2024-2031

Baking Ingredients Market Valuation - 2024-2031

The consumer demand for variety, high-quality baked goods, and an increasing demand for organic and health-conscious ingredients drive the baking ingredients market forward. Furthermore, the increase in home baking activities, aided by social media and culinary events, has fueled interest in innovative baking ingredients that improve flavor, texture, and shelf life, positioning the market for substantial expansion. According to the analyst from Verified Market Research, the baking ingredients market is estimated to reach a valuation of USD 122.53 Billion over the forecast subjugating around USD 34.9 Billion valued in 2024.

The demand for multi-cuisine bakery products that improve fermentation processes and changing consumer tastes for various baked items are driving the baking ingredients market. It enables the market to grow at aCAGR of 18.75% from 2024 to 2031.

Baking Ingredients Market: Definition/ Overview

Baking ingredients are essential raw materials required to make a variety of baked goods, such as bread, cakes, cookies, and pastries. Flour, sugar, eggs, fats, leavening agents (such as baking powder and baking soda), and flavorings are among the most common components. Each ingredient serves a distinct purpose; for example, flour gives structure, whilst leavening agents generate the correct texture by creating gas, causing the dough to rise. These additives not only affect the taste and texture of baked goods, but they also improve their nutritional content and shelf life. Baking ingredients are used for more than just baking; they are also used to make convenience foods and packaged goods, which respond to the expanding consumer demand for ready-to-eat bakery items in a variety of markets.

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What Factors are Propelling the Growth of the Baking Ingredients Market?

The rising popularity of ready-to-eat and convenience foods is propelling the baking ingredients market. According to a report by the United States Department of Agriculture (USDA), the average American household spent $3,526 on meals away from home in 2021, up 16.7% from 2020. This trend shows increased demand for packaged baked goods, which benefits the baking ingredients market.

Consumers are increasingly looking for better baking options, which drives demand for functional and natural ingredients. According to the International Food Information Council's 2022 Food and Health Survey, 52% of Americans adhere to a specific diet or eating pattern, with many opting for healthier alternatives. This trend is reflected in the baking ingredients market, where there is an increasing demand for whole grains, natural sweeteners, and useful additions.

Furthermore, the global growth of the bakery industry is a major driver of the baking ingredients market. According to Verified Market Research, the global bakery products market is predicted to rise at a 4.1% CAGR from 2024 to 2031. This expansion is especially robust in developing regions such as Asia-Pacific, where changing dietary patterns and rising disposable incomes are driving demand for baked goods and, by extension, baking ingredients.

What are the Potential Impacts of Baking Ingredients Demand in the Market?

There is an increasing desire for healthier baked goods with lower sugar, fat, and calorie content, as well as those without artificial ingredients or preservatives. This trend has an adverse effect on demand for traditional baking ingredients linked with poor eating habits, forcing producers to experiment with healthier alternatives, which raises costs and lowers profit margins.

Furthermore, the bakery ingredients market is governed by tight laws and food safety standards enforced by regulatory organizations. Compliance with these regulations, which mandate particular safety, labeling, and quality standards, is expensive and time-consuming for manufacturers. Also, any food safety issues harm the industry's brand and reduce consumer trust, limiting market growth.

Category-Wise Acumens

What are the Drivers that Contribute to the Demand for Baking Powder & Mixes?

According to VMR analysis, the baking powder & mixes segment is estimated to dominate the market during the forecast period. Baking powder and mixes are essential ingredients in a range of baked goods, such as cakes, cookies, and breads. Their capacity to offer necessary leavening and texture renders them indispensable in both professional and home baking environments. This extensive use across multiple product categories provides steady demand, reinforcing their market leadership.

The growing popularity of convenience foods has greatly increased the demand for baking powders and mixes. As consumers seek quick and easy meal options, pre-mixed baking items provide a time-saving alternative that streamlines the baking process. This shift in consumer behavior results in increased sales volumes for baking powders and mixes, cementing their market leadership.

Furthermore, with increased knowledge of health and nutrition, there is a greater demand for organic and low-fat baking powders. Manufacturers are responding by introducing novel products for health-conscious consumers, such as gluten-free or low-sugar mixes. This versatility not only fulfills consumer tastes but also increases the market growth potential of the baking powder & mixes segment.

What are the Potential Factors Driving the Applications of Baking Ingredients for Bread?

The bread segment is estimated to dominate the baking ingredients market during the forecast period. Bread is a staple food in many civilizations around the world, with consistently high consumption across all demographics. Its adaptability allows it to be incorporated into a variety of dishes, making it an essential component of everyday diets. Bread's widespread acceptance and reliance as a primary food source help to maintain its dominant market position.

The growing consumer interest in health and wellness has fueled demand for better bread options such as whole grain, gluten-free, and fortified variants. Manufacturers are responding by developing new ingredients that improve the nutritional profile of bread, catering to health-conscious consumers. This tendency not only increases sales but also supports bread's position as a top choice in the bakery industry.

Furthermore, modern customers' fast-paced lifestyles drive the demand for quick meal options, and ready-to-eat and easy-to-prepare items are becoming increasingly popular. Bread meets this need perfectly because it is commonly accessible in a variety of forms, including pre-sliced and packed options. The convenience component increases its appeal, ensuring that bread remains a popular choice among people looking for quick meal choices.

Country/Region-wise Acumens

What are the Key Factors that Contribute to Europe's Edge in the Market?

According to VMR Analyst, Europe is estimated to dominate the baking ingredients market during the forecast period. Europe has a strong bakery culture, resulting in continual demand for baking ingredients. The European Bakery Industry Association (AIBI) reports that bread and bakery goods are consumed in Europe at a relatively high per capita rate. For example, in Germany, the average yearly consumption of bread and bakery items was 83.5 kg per person in 2020. This strong consumption rate ensures the region's baking ingredients business remains robust.

Furthermore, the growing number of Europeans adopting gluten-free and other specialist diets is spurring innovation in baking ingredients. According to the European Society for Pediatric Gastroenterology, Hepatology, and Nutrition (ESPGHAN), celiac disease affects approximately 1% of the European population. This has resulted in a surge in gluten-free product development. Euromonitor International projected that the gluten-free food market in Western Europe increased by 60% between 2015 and 2020, reaching $2.5 billion. This trend is increasing the demand for alternate flours and specialized baking ingredients to meet certain dietary requirements.

How Does Changing Dietary Habits Shape the Market Landscape in the Asia Pacific?

The Asia Pacific region is estimated to exhibit the highest growth within the baking ingredients market during the forecast period. The Asia Pacific region is witnessing rapid urbanization, resulting in major changes in food choices and increased consumption of baked products. According to the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), the region's urban population is projected to increase from 2.3 billion in 2019 to 3.5 billion by 2050. This urbanization trend is pushing up demand for convenience meals, such as bakery products.

Furthermore, the Asia Pacific region's burgeoning middle class and rising disposable incomes are driving demand for high-quality, diversified bakery products. According to the World Bank, the middle class in East Asia and the Pacific has increased from 27% of the population in 2002 to 54% by 2021. According to the Ministry of Statistics and Programme Implementation, India's per capita disposable income increased by 6.8% between 2019 and 2020. This economic expansion is directly related to increased spending on bakery items, hence propelling the baking ingredients market.

Competitive Landscape

The baking ingredients market's competitive landscape is characterized by a dynamic interaction of various global and regional companies vying for market share. Companies are increasingly focused on product innovation and strategic alliances to differentiate themselves, in response to changing consumer tastes for healthier and more diverse baked goods.

Some of the prominent players operating in the baking ingredients market include:

Archer Daniels Midland

Associated British Foods

Cargill

Dupont

Ingredion

AAK

Bakels

Corbion

Dawn Food Products

IFFCO

Kerry

Lallemand

Lesaffre

Novozymes

Puratos Group

Royal DSM

Taura Natural Ingredients

Tate & Lyle

Latest Developments

In January 2024, Cargill Incorporated garnered attention by introducing a new line of chickpea-based flours tailored for the gluten-free and protein-rich bakery product market. This strategic move resonates with the increasing consumer demand for alternative flour options and healthier baked goods.

In December 2023, Archer Daniels Midland Company (ADM) unveiled an enticing range of organic, non-GMO flours and starches, targeting bakers in search of natural ingredients. This initiative underscores ADM's commitment to meeting the evolving preferences of health-conscious consumers and capitalizing on the growing trend toward clean-label baking.

In September 2023, DSM's noteworthy collaboration with farmers to secure sustainably grown wheat for its flour production. By prioritizing sustainability and responsible sourcing practices, DSM aims to enhance the environmental footprint of its flour products while meeting the rising demand for ethically sourced ingredients.

In July 2023, Dupont Nutrition & Health introduced a groundbreaking range of 3D printing ingredients for baked goods by Dupont Nutrition & Health. This innovative product line opens up new avenues for creativity and customization in the baking industry, enabling bakers to explore innovative designs and enhance product differentiation in the market.