Sales of baked goods in Eastern Europe recorded slightly slower real value growth in 2020 than a year earlier. Although the arrival of Coronavirus (COVID-19) in the region saw consumers stockpiling certain products, this did not extend to bread in the region’s biggest market of Russia, due to the short shelf life of this product, with unpackaged baked goods also hit by hygiene concerns. Stagnating or very modest annual growth rates are expected in the region from 2021.
With most national economies growing in the region and many markets also increasingly seeing sales of higher-priced healthy baked goods (eg wholegrain, multigrain, rye, spelt), 2019 saw annual growth peak at almost 3% in real value terms in 2019.
Although baked goods recorded stronger growth in some Eastern European countries in 2020, with consumers prioritising staples during the pandemic, sales in Russia declined in this year, with COVID-19 having a negative impact on leavened bread, due to its short shelf life, leading to a lack of consumer stockpiling that had been seen with other staples. In addition, there were hygiene concerns with unpackaged baked goods, which still lead sales, especially in leavened bread. Furthermore, with consumers spending more time at home during lockdowns, there was a greater prevalence of home-cooking, along with an uptick in consumers baking their own bread.
Packaged baked goods were benefitting from the pandemic, as were frozen baked goods and mixed desserts. Although the latter two categories are still relatively small product areas, mixed desserts recorded growth thanks to increased levels of home-baking, while frozen products were convenient for stockpiling at home, being conveniently to hand as and when needed.
Baked goods is expected to see only modest annual growth in real value terms in the region in the post-2020 period, with bread, pastries and cakes expected to be in decline in Russia for much of the forecast period. Unpackaged products will continue to underperform their packaged counterparts, while HW products will be among the more dynamic categories, along with frozen baked goods.
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