Flexible Packaging Dominates Baked Foods Market

Flexible Packaging Domination

Currently, flexible packaging dominates the retail space, including the baked foods market by as much as 76% as of 2018. At the same time, the demand for flexible packaging is expected to rise by about 3% per year all the way through to 2021, despite tighter regulations around the world, especially Europe.

Flexible packaging consists of any package whose shape can be changed easily, which includes stand up pouches, tubes, and sleeves. Their dominance is attributed to large cost saving and marketing adaptability.

Fresh baked goods are almost always consumed within short periods of time since they are highly perishable. The exception to the rule would be cereal-based goods such as biscuits and cakes with added preservatives. Food structure and texture are directly correlated and have a large influence on consumer preferences of specific brands over the other. For these to be preserved, effective packaging is a very important factor.

Developing countries are seen as one of the largest markets for flexible packaging in the coming years, chiefly due to retailing expansion worldwide. Markets such as India that are seeing an ever-increasing consumption of baked goods from the western space are seeing a greater uptick in demand for plastic packaging than any other parts of the world. It’s been observed that this demand is mainly a result of increasing emphasis on hygiene and convenience.

Among millennials, who earn considerably higher wages than previous generations, the importance of convenience cannot be overstated. Most people live hectic and busy lifestyles, anything that maximizes convenience and minimizes cost is game for flexible packaging retailers.

There is a continual rise of organic foods among people in the west, especially for beverages and baked goods with fewer and fewer preservatives. More material science research is being undertaken to reduce the price of plastic packaging while maintaining the same strength. The flexible packaging market also needs products with great tensile strength due to the kind of harsh environments baked foods are exposed to over the course of production and transportation.

Paper-Based Materials Surging

Packaging, regardless of what forms it comes in, is meant to protect the goods inside while they are in transit or being stored. It prevents any form of breakage and contamination while providing excellent storage, extending the shelf life of the product. In recent years, paper-based products have seen increased usage, despite similar increased uptake by the flexible packaging market.

Paper-based materials are currently represented in three different forms: corrugated, cartons and paper-based packaging.

Corrugated boxes: These account for about 30% of all packaging used (including flexible packaging) and stands as the most common packaging material in the market today.

Paper-based packaging: When it comes to brand differentiation, no other material is as efficient as paper-based packaging. These have proved popular in the EU, where paper-based packaging is recycled far more than all other packaging materials combined.

Cartons: These are also quite common, but usually used in the manufacturing industry to carry features like RFIDs and legal information.

Other forms of paper-based packaging materials include paper bags, shipping sacks, and paperboards. These have more niche applications within their respective industries, however.

According to Euromonitor, paper-based materials account for about 24% of all materials used in baked foods. They have been steadily gaining popularity due to their amazing environmental track record. For instance, in the UK, corrugated boxes are made from about 80% recycled fiber, and once used, the packaging materials themselves are simple to recycle. In most of Europe, over 80% of paper-based packaging materials are successfully recycled.

For these and other reasons, a lot more consumers prefer paper-based packaging in developed countries like the UK. One survey carried out by the Confederation of Paper Industries in 2017 found that 57% of consumers in the UK prefer paper-based packaging.

In the US, according to the Environmental Protection Agency, paper-based packaging is also recovered and recycled far more than any other kind of packaging. In 2011 and 2012, it accounted for more than 70% of all packaging materials recycled. In this statistic, 90% of all corrugated containers were accounted for and recycled.

In other forms, paper-based baking trays, an eco-friendly alternative to aluminum trays and tough plastics are also seeing increasing adoption in countries like India. Thanks to recent developments in products involving modified atmospheres – referred to as Modified Atmospheric Packaging (MAP) – for baked good, the shelf life of baked goods can be extended for as much as forty days.

Baked Foods Market Dynamics

Per-capita consumption of bakery products has been increasing steadily for the past decade, pushed forward by increasing disposable income in developing countries and growing health awareness. This is, in turn, driven forward by the influence of Western culture and as a result of the general convenience it presents.

At its core, the baking industry is almost completely driven by increasing demand, lifestyle changes and convenience – ready-to-eat products are popular for people on the move. Participants in the industry have taken various measures to keep in pace with consumer demands. This includes new novel ingredients and millions of dollars pumped into R&D initiatives.

However, it’s important to note that different regions of the world have very different dietary preferences and habits. North America and Europe are the top consumers of baked goods, but these markets have been under several constraints in recent years. From ever-shifting consumer preferences to health concerns, the pace of new product acceptance has greatly slowed.

Growth in the coming years is expected to be very brisk as a result. The demand for white bread is an example of an area that has seen a large decline due to health concerns. However, new, innovative product development of whole grain and organic baked products are supposed to lead to a change in the way the public perceives baked goods in general.