The European bakery sector is likely to see further consolidation over the next five years as a stronger pan-European market emerges, research firm Rabobank has suggested.
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According to food and agriculture analyst Sapna Naik, consolidation in the industry has been spurred by the economic downturn, a drying up of the credit markets and volatile input costs.
As a result, the high level of mergers and acquisitions seen in the past three to four years will continue. However, unlike previous M&A, in the future, bakery groups will also focus on financial stability in order to “absorb any shocks”, Naik wrote in a research note.
“Frozen-bakery players and private-equity players are expected to be particularly active,” he wrote.
Bakery firms are also expected to look further afield to generate revenues. A growing proportion of sales will be generated outside the domestic market and Eastern Europe has been identified as an “attractive business destination”.
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By GlobalDataBakery firms are also expected to renew their focus on the core business and to improve their competitive position by gaining economies of scale, improving efficiency by centralising operations and improving their use of capacity, Naik predicted.
