The pastries market in Asia Pacific varies dramatically. Japan is the region’s largest market for pastry products and is also the world’s third-largest pastry market in retail value sales. However, the market in Japan is in decline, partly due to health concerns, whereas the prospects in other less-developed markets in the Asia Pacific region are good, according to Euromonitor’s Francisco Redruello.

Japan not only dominates pastry sales in Asia Pacific, but it is also a major market at a global level, with new research from Euromonitor International showing that Japan is the world’s third largest pastries market in value terms. Japan’s high value sales of pastries are based on a long tradition of pastry consumption in the country and a high rate of product innovation, which is proving to be a key means of maintaining consumer interest.

According to Euromonitor estimates, in 2004, Japan’s expenditure on pastries per capita reached US$45, which is comparable to Western consumption, with the US clocking US$44, Spain US$25 and Germany US$22 per head. However, for the rest of Asia Pacific, expenditure per capita on pastries is quite low. The average expenditure per capita for Asia Pacific is only US$3 compared to the Europe average of US$24. Outside of Japan, the low level of pastries consumption is a result of fierce competition from bakery products made at home, which are perceived as healthier and less expensive than pastries sold through the retail channel.

Within Asia Pacific, however, prospects for pastries are good, with new product developments, economic growth and strong demand for semi-premium varieties in urban areas driving growth. Japan is the exception to this rule, where maturity and health concerns have been prompting a decline in sales since 2001, in both retail volume and value terms.

Snapshot by country

Table 1: Top Ten Pastry Markets in the World – 2004 Retail Value Sales

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Table 2: Top Five Pastry Markets in Asia Pacific – 2004 Retail Value Sales

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Japan: Health craze affects growth of pastries

For Japan, Euromonitor International projects a slight decline in pastry volume sales over 2005. In the midst of a health craze and diet fad trends amongst young consumers, high-calorie pastries are being kept at a distance, with consumers tending to opt for products such as breakfast cereals, marketed by the industry as more beneficial for the digestive system.

The industry has reacted by introducing new flavours to boost their pastry sales. One of the most prominent examples of this trend is the Japanese manufacturer Fujipan, which introduces different varieties of pastries every month. Soy milk, papaya and pineapple jam flavours were its main novelties for 2004.

Long-life pastries into the Japanese market

An interesting development in 2004 for the Japanese market was the introduction of long-life pastries by Como Corp. These products can be kept for between 35 and 90 days at room temperature if the packaging is not opened. Interestingly, the Japanese defence force ordered Como’s long-life pastries for consumption during long training exercises, helping to increase the brand awareness of the product among Japanese consumers.

Sales of long-life pastries are, however, extremely small according to Euromonitor, accounting for less than 1% of total volume sales of pastries. Thus, their impact on total volume sales so far has been negligible. However, a few more companies are planning to enter this niche in the near future, and sales are predicted to show high growth over the next five years. Long-life pastries are set to benefit from the increasing number of working women and busier consumer lifestyles in general, as the Japanese may welcome an opportunity to make fewer shopping trips per week. Concerns, however, over product freshness might prove a handicap to growth among more health-conscious consumers.

Fierce competition in the retail channel constrains sales in Thailand

Retail sales of pastries in Thailand reached US$144.7m in 2004, 7% up on the previous year (based on local currency). The growing number of bakeries and coffee shops in Thailand has had a strong impact on pastries’ growth in the recent past. The widening range of product varieties available at bakeries has played a positive factor in their growth as well. However, with more retail channels offering pastries, competition has intensified. To attract more customers, many bakeries are resorting to competing on the basis of price, offering discounts of up to 25%. This strategy led to slower growth in value sales in 2004, when sales grew by 7.4%, 1.6 percentage points down on the previous year.

Indonesia: Pastries increasingly popular as breakfast snack items

Pastries in Indonesia are benefiting from popularity as breakfast items and between-meal snacks. As such, pastries recorded the best performance in the region in 2004, at 17% current value growth in local currency.

In Indonesia, chocolate and cheese-flavoured pastries are the most popular. There are continuous attempts to increase the quality and variety on offer by both home/cottage industries and large manufacturers. Furthermore, the industry is also focusing on creating new designs and giving products a new appearance, driving consumer interest.

China: Emergence of bakery shops in big cities drive sales

Euromonitor International projects sales of US$2.5bn for pastries in China in 2004, a 7% increase on the previous year (local currency). Pastries are the largest category in volume terms within bakery products, with sales estimated at 2,236 tonnes in 2004. Compared with cakes, Chinese pastries are more competitively priced. Furthermore, they offer a wider range of products than bread. With the emergence of bakery shops in big cities, freshly baked pastries have proved to be inviting to consumers.

Packaged Food in China

Packaged Food in Thailand

Packaged Food in Indonesia 

Packaged Food in Japan 

The World Market for Breakfast Products