Market Digest: Rising Dough in China’s Baking Sector


The baking sector in China is presently undergoing a phase of accelerated expansion, which is anticipated to sustain momentum in the coming years. The value of China’s bakery industry increased to US$39.8 billion in 2022, with production up by 6% annually (YOY) to a total of 19.6 million tons.

Source: iimedia

By placing an increased emphasis on health and nutrition in baked goods, the industry is anticipated to reach an impressive US$49.14 billion by 2025.  Meanwhile, the annual per capita consumption of baked goods in China remains far below many western countries, demonstrating the market’s significant capacity for growth. Home to more than 500,000 bakery and pastry establishments, China boasts a developed market that still has ample room to grow. Baking products have become an indispensable part of modern life, catering to consumers’ ever-evolving needs, whether for daily snacks, travel energy supplements, or healthy eating. China’s primary baking occasions are breakfast, snacks, and celebrations. Cakes, pastries, and bread are the most popular baked goods. The consumer base is predominantly young and female: over 80% of Chinese consumers of baked goods were born after 1980, and around 65% of them are women.

Source: iimedia

Like other segments of the F&B market, the baking business must adapt to quickly-evolving consumer demands, such as those for nontraditional savory and healthy options. As health-conscious baking gains popularity, offering smaller quantities as well as low-fat and low-sugar options are some of the ways companies are catering to consumer preferences. For example, Slowgar targets blood sugar health enthusiasts and asserts that sugar control has entered a new era, shifting from “sugar-free/low sugar” to low-glycemic index or “low GI.”  Slowgar’s main products have lower GIs than normal foods. Slowgar’s three breads have GI levels of around 50, while standard white bread has 88. The company also developed compact, single-serving bread to satisfy consumers’ daily demands.  In the first half of 2023, the company secured a multi-million-dollar angel round financing from Qingshan Capital.

When it comes to bakery ingredients, imported butter, tree nuts, and dried and processed fruits have demonstrated strong growth potential in China.

Chinese consumers enjoy combining Western-style pastries with traditional Chinese treats, such as filling mooncakes with chocolate or ice cream, necessitating some import of supply Due to the high cost and seasonality of native supply, Chinese food producers prefer to use foreign butter.  The Chinese baking industry also uses imported tree nuts. American walnuts, pistachios, pecans, and almonds are frequently used by the bakery industry as ingredients in bread, cakes, cookies, and other pastries.  Moreover, dried or frozen fruits including sour cherries, blueberries, cranberries, and raisins are also considered to be excellent fillings. 

China’s market is highly segmented among consumer preferences and habits and is developing very quickly. Precisely targeting different age groups and branching out into creative and localized products with value added are key factors to be successful in the China’s baked goods market.

Authored by

Cathy Gu is a research analyst based in Shanghai.

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