Bakery and cereals sales in the US and Europe are set to grow by over 10% by 2009, according to a report on the sector.

Sales from the category are slated to reach US$216.7bn in two years' time, representing growth of 10.1% since 2005, according to a study by market analysts Datamonitor.

The buoyancy in the category is expected to be thanks to growth in the US, the Datamonitor report, entitled Growth Strategies in Bakery and Cereals: Key trends and future product opportunities, said.

Bakery and cereals sales in the US are set to rise by over 14% to $61.5bn by 2009, despite sales by volume rising by only 4.5%, the report said.

Sales by value are expected to outstrip volume growth in the US due to growing interest in ethical consumerism, functional health and personalized products, the report said.

Germany will remain the largest European market in the sector with sales forecast to rise by 9.4% to $24.2bn, according to the report.

The US, alongside the UK and Germany, will also see growing sales of organic products in the sector, Datamonitor said.

"Countries such as Germany, the UK and US, which have established and fast-growing organic industries, will clearly attract more natural and organic bakery and cereals NPD than those with less developed, more immature markets," the report said.

Kellogg, the world's largest cereal maker, was named as the "most innovative" company in the sector, according to industry executives interviewed for the report.

Nearly a quarter of respondents named Kellogg the most innovative with Nestlé in second place, the report said.

For more on the report, click here