Baked goods is anticipated to see a lower retail current value and volume growth rate in 2020 compared to the previous year. With home seclusion, Azerbaijani consumers have been baking bread, cakes and pastries at home more than in any other year, leading to lower demand for packaged baked goods through retail than usual.
Modern grocery retailers, as a sales channel, is growing in Azerbaijan, taking value share from traditional grocery retailers such as independent small grocers and other grocery retailers. The significant upsurge of modern grocery retailers, mainly supermarkets, hypermarkets, convenience stores and discounters, is driven by the rising number of such outlets as well as changing shopping habits among local consumers.
National brands continue to dominate baked goods sales in 2020, outpacing international baked products due to being affordable and due to concerns among consumers about the freshness of imported brands, which have a longer time in transition, and their non-organic and unnatural ingredients. Also, local brands have a wider distribution due to better relationships between local suppliers and distribution channels, both traditional grocery retailers and modern grocery retailers.
Over the forecast period, baked goods sales are expected to grow in Azerbaijan, thanks to a rising consumer base and improved modern retailing. The projected steady sales growth in baked goods is attributed to the maturity of the major baked product consumed in the country, which is bread, as well as to rising dietetic and health and wellness trends and the increase in gluten-awareness among local consumers.
Owing to modern retailing developing, state actions supporting the production of packaged baked goods by stricter control of production and sales, subsidies and other support for local manufacturers, packaged baked goods in Azerbaijan will achieve growth over the forecast period. Branded and packaged bread is set to be increasingly popular in modern grocery retailers in big cities, thanks to the convenience trend.
Dessert mixes will be a key sales driver over the forecast period in Azerbaijan, accounting for the highest volume growth, as the category is relatively small here. The main distribution channel for dessert mixes is the rapidly developing modern grocery retailers.
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