• Ingredients can be artificial or natural
• Changing lifestyles contributes to growth
• Bakery and cereals market to reach $541 billion

By 2022, the baking ingredients market is forecasted to reach $16.91 billion, according to MarketsandMarkets. This year, the market is expected to be valued at $13.03 billion. This represents a compound annual growth rate (CAGR) of 5.4%.

Baking ingredients are used to add nutritional value, add or enhance taste, maintain quality consistency, provide texture and color, and prevent spoilage. They also aid in processing, packaging, storage and transportation.

Baking ingredients can be artificial or natural.

Some common bakery ingredients are added flavors, baking soda, baking powder, butter, color additives, eggs, flavors enhancers, flour, fruits, honey, nuts and yeasts.

The market is segmented by ingredient type, application and region.

Growth Factors and Challenges

Multiple factors are contributing to the market’s growth.

Societal factors include population growth, an increased demand for packaged food, busy lifestyles and rising per capita consumption of baked goods.

Economic factors include the expanding middle class and the development of innovative baking ingredients that are cost-effective as well as beneficial for health.

Areas of future growth include untapped markets and an increased demand for organic bakery products.

Challenges to the market include rigorous health and safety checks, the excess usage of trans-fatty acids, the contamination of raw materials and health concerns.

Bakery and Cereals Market

By 2020, the bakery and cereals market is forecasted to be valued at $541.2 billion globally, according to GlobalData. The market is highly fragmented; the top five brands collectively hold a 5.4% market share.

In developed countries, demand for bakery and cereal products is stable. Western Europe is the largest region, holding a 28.7% market share by region. In the U.S., the market was valued at $102.7 billion and is expected to grow at a CAGR of 2.8% between 2015 and 2020.

In developed countries, innovation and product differentiation will contribute to growth, especially those related to the reformulated of products with healthy, high quality ingredients.

Bakery and cereal products are not considered to be staple food in most of the Asia-Pacific region. However, between 2015 and 2020, the market is forecasted to grow at a CAGR of 6.9%.

This growth is attributed to exposure to developed cultures through the media and travels, rapid urbanization, and the increasing feeling of time-scarcity thanks to a growing economy.

China is forecasted to have the largest projected growth, increasing at a CAGR of 10.9% between 2015 and 2020.

Bakery Ingredients and Equipment Markets

• The bakery equipment market is forecasted to grow at a CAGR of 7%.
• In 2015, the bakery equipment market was valued at $9 billion.
• In 2015, the leading distribution channel for bakery and cereal products was hypermarkets and supermarkets, with a 41.1% market share.
• In most regions, Quaker is a leading breakfast cereals brand.

• Foods in this market all have stable shelf lives
• A demand for convenience foods boosts sales
• The market is highly fragmented with no clear market-share leader

The prepared-meals market is forecasted to reach $99.1 billion globally by 2021, according to GlobalData. In 2016, the market was valued at $83.4 billion, representing a compound annual growth rate of (CAGR) of 3.5%.

Prepared foods are defined as having a stable shelf life. They can be dried, canned, boxed chilled or frozen. These foods require no preparation other than heating before being served.   The most common covering type is film.

This category also includes pasta, rice, noodles, canned meat, and meat-substitute dishes.

Favorable Factors and Challenges

Many factors have led to this market’s growth.

The demand for convenient and ready-to-eat products has risen as more women enter the workforce and people lead increasingly busy lives. Customers are seeking products that save time and effort.

Changing eating patterns also have boosted sales as fewer people make time to cook food from scratch. In developing countries such as India and China, the younger population lacks, not only time, but cooking skills.

Finally, urbanization in Latin America, the Middle East and Africa has lead to more families with disposable incomes.

The market also faces several challenges.

In developed regions, market players face intense price battles while in emerging countries, there is economic uncertainty.

There also is the perception that frozen and chilled categories are unhealthy because they contain few vegetables and have preservatives. To overcome this, manufacturers are launching products with healthier recipes, featuring natural and organic ingredients. They also are using labels when products are “free from” certain ingredients.

Growth strategies include introducing healthier snacks and a wider distribution.

Distribution Networks

The global market is highly fragmented. The top five brands – Stouffers, Heinz, Amy’s, Marumiya, and DiGiorno – hold less than 11% of the combined market share. Nestlé owns two of these brands.

Even regional markets are highly fragmented. In Eastern Europe, for example, the top four brands hold only a 14.9% combined market share.

Eleven distribution channels are used by this market. The largest are hypermarkets and supermarkets, holding a 68% market share, and convenience stores, at 19.7%. The next largest channels are health and beauty stores, department stores, cash- and-carries along with warehouse clubs, dollar stores, variety stores and general merchandise retailers.

Prepared-Ready-Meals Market

• In 2016, the largest market was the U.S. with a 23.3% share of global sales.
• By 2021, China is forecasted to be one of the fastest-growing markets, with a CAGR of 9.2%.
• In 2016, Western Europe was the largest regional market with a value share of 39.5%.
• By 2021, Asia-Pacific will grow at a CAGR of 6.5%.

• North America the largest market
• Globalization means an increased threat of food poisoning
• Many growth opportunities exist in the market

By 2022, the food traceability market is forecasted to reach $19.7 billion globally, according to Stratistics MRC.  This represents a compound annual growth rate (CAGR) of 12.2% as the market was valued at $8.7 billion in 2015.

Food traceability systems collect data about the objects and their movements, cutting cost. This information can be used to forecast sales by tracking goods in inventory, and replenishing stock regularly.

The top consumer in the market is North America. However, increased opportunities in emerging economies and technical advancements means Asia-Pacific is expected to grow at the highest CAGR.

Threat of Food Poisoning

Globalization has created an international food trade. The downside is that it also has increased the threat of bioterrorism, contagious diseases and the contamination of food products.

“According to the U.S. Centers for Disease Control and Prevention, an estimated 48 million people (1 in 6 Americans) get sick each year from foodborne diseases. Approximately 128,000 are hospitalized and 3,000 die each year. This doesn’t have to be the case. Much of this can be circumvented through process regulation and standardization,” Victoria Brown, senior research analyst, IDC Retail Insights, said.

Food traceability is an important part of quality control becoming a crucial, a tool used to prevent diseases such as avian flu, foot and mouth disease, and mad cow disease, and other potentially hazardous health effects.

Growth and Challenges

Growth in the market is driven by a variety of factors including certifications and standardizations, strict government regulations, product loyalty and an increased awareness among consumers.

The market represents tremendous opportunity for vendors to invest in the research and development of secure, low-cost and unique traceability systems. Emerging economies also represent great opportunity.

The use of increasing adoption of cloud computing, quality management solutions, enterprise resource planning and warehouse management software also has contributed to market growth.

Challenges to the market include the need for dissimilar products and confidentiality issues.

Consumers are skeptical about privacy, and information can be lost to competitors or hackers. Traceability systems, therefore, must be secured properly to avoid data theft, other security issues and financial losses.

Global Food Traceability Market

• In 2016, the food traceability technologies market was valued at $10.7 billion globally. By 2021, it is expected to reach $15.1 billion, growing at a CAGR of 7.1%.
• The radio-frequency identification segment is anticipated to grow at the highest CAGR. In 2016, it was valued at $2 billion. The market is forecasted to reach $4.3 billion in 2021, a CAGR of 16.9%.
• The largest market is barcode technology. The segment was worth $7.8 billion in 2016 and is forecasted to reach $9.5 billion in 2021, growing at a CAGR of 4.2%.

• Pet food market divided into many categories and subcategories
• Pet product packaging important to compete in market
• Electronic records transforming veterinary medicine

Last year, the pet food market was valued at $75 billion globally, according to Inkwood Research, while between 2016 and 2020, Technavio predicts, the pet care market will grow at a compound annual growth rate (CAGR) of 4.7% globally.

The market is growing because more households are treating their pets as a part of the family. This is called pet humanization and means pets are given the same care as humans when it comes to hygiene, eating habits, lifestyle and health.

The major concern of pet owners is obesity, which has caused an increase in healthy pet food.

The pet food market is broken into numerous categories based on geography, pricing, sales channels, ingredient types, animal type, and product.

These categories are further subdivided. The animal type category, for example, is divided by species, and price is segmented into economic, premium and super premium price points. The product type category is subdivided into dry foods, wet foods, liquid food, treats, organic and veterinary diets. Dry and wet foods are further divided into grain free and others. Ingredient types is divided into animal, plant or cereal derivatives, cereals and others.

A challenge to market growth is pet allergies to certain ingredients.

Pet Care Packaging

Pet care products include not only food, but accessories, hygiene products, healthcare products, and grooming products.

Packaging can help a product succeed in a crowded market. Between 2014 and 2019, the pet care packaging market is forecasted to grow at a CAGR of 2.97% globally, according to Technavio.

Because the pet food market is highly competitive, packaging lets products stand out on the shelf. Therefore, packaging is designed to catch consumers’ attention using unusual product shapes, stylish packaging or visuals inspired by human food.

Customers also appreciate packaging that provides pre-measured and easy dosage portions.

The pet care products come in bags, folding cartons, metal cans, plastic bottles, pouches, and other packaging formats made of paperboard, rigid plastic, rigid metal, flexible packaging and other materials.

Veterinary Services

Veterinary services provide healthcare for pets, farms, zoos and wildlife parks.

As with human healthcare, electronic health records provide a way to collect and store health information about patients. Electronic health records increase efficiency and allow vets to access a pet’s history making it easier to identify trends and long-term changes.

Global Pet Care Market

• North America is the largest market in the pet food industry, accounting for a 40% of global market share. Europe is the second largest market followed by Asia- Pacific.
• Between 2016 and 2020, the global mobile pet care market is forecasted to grow at a CAGR of 5.3%. The largest segment is mobile pet grooming.
• In 2016, the Americas had the largest share in the veterinary services market, accounting for a 45% market share. It is followed by Europe, Asia-Pacific, the Middle East and Africa.

• Technology used to improve crop production
• Internet of Things a solution to growing population
• John Deere making the transition to precision farming

In 2014, the precision farming market was worth $2.81 billion globally, according to Stratistics MRC, and is forecasted to reach $6.43 billion by 2022. This represents a compound annual growth rate (CAGR) of 12.5%.

In 2015, the market was valued at $3.20 billion. According to MarketsandMarkets, the market will be valued at $7.87 billion by 2022, growing at a CAGR of 13.5%.

Precision farming is the tech-driven information analysis of data to increase crop productivity.

Growth in the market will come from telematics technologies, improved cost efficiency and government interventions. The market will be challenged, however, by a lack of technical awareness among farmers and a high initial investment.

The growing demand for food also is leading to the adoption of precision farming techniques.

Adoption of the technology in Asia-Pacific is forecasted to grow by double digits.   The region experiences high population growth and has large farmlands.  The nations with the largest market share are Australia, China, India, and Japan.

A Practical Solution

The Internet of Things may provide a practical solution to the growing global population, one that’s expected to reach at least 11 billion by 2100, according to the United Nations.

Drones can be used to analyze soil and water conditions, sending the information back to farmers’ mobile devices. Sensors can be used to monitor livestock and machinery.

John Deere

Farm equipment manufacturer John Deere has entered the Internet of Things market. It’s technology the company’s customers are seeking.

The company’s SeedStar Mobile app allows farmers to conduct a row by row assessment and see which seedlings are growing correctly and which are not. The app can be used on a tablet attached to a John Deere machine.

“The idea that agriculture is now a tech industry is firmly established,” Roger Royse, a Silicon Valley attorney who works with ag tech startups, told Forbes. “The farming community knows they have to embrace this.”

Global Precision Farming Market

• In 2016, precision farming technologies totaled $3.3 billion and are expected to reach $5.9 billion in 2021, growing at CAGR of 12.4%.
• In 2016, the hardware segment totaled $2.1 billion and is expected to reach $3.6 billion by 2021, growing at a CAGR of 10.8%.
• In 2016, the software segment totaled $1.1 billion and is expected to reach $2.3 billion by 2021, growing at a CAGR of 15.2%.

• The most widely used application in precision farming is yield monitoring. A major application of yield monitoring is soil monitoring used to detect soil parameters needed for an efficient yield production.

• Many factors contribute to the market’s growth, challenges
• Stewardship program ensures nematicide best practices
• Nematodes cost UK farmers $62.6 million

By 2022, the nematicides market will reach $1.43 billion globally, MarketsandMarkets forecasts, growing at compound annual growth rate (CAGR) of 3.3%.

In 2015, North America was the largest market because the region has less arable land available for growing quality crops and rapid industrialization.  Nematicides have led to improved soil conditions that yield better crops for food consumption.

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• Rising global population increases demand
• Europe brings Internet of Things to agriculture
• Summit takes on agricultural production in Africa

By 2021, the connected agriculture market will reach $3.06 billion, according to a report by MarketsandMarkets. This represents a compound annual growth rate (CAGR) of 17.9% from 2016, when the market was valued at $1.34 billion, and 2021.

Why such strong growth? A sharp rise in world population will mean an increase in global food production. In 2016, global population was 7.4 billion. The United Nations believes the global population in 2030 will expand to 8.5 billion.

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• Over the next decade, 89% of street lights will be LED
• Indian city plans streetlights with distress button
• Kingston, Jamaica, to become Caribbean’s first smart city

Investment in LED street lighting will be $57 billion between 2016 and 2026, Northeast Group forecasts. Growth is fueled by the replacement of traditional street lights with LED bulbs.

LEDs are preferred by many communities because of their cost savings. They have longer lifetimes, require less maintenance and use less energy.

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• Dairy and soy market highly fractured
• Kraft Heinz facing lawsuit over cheese product’s labeling
• S. soybean production slightly lower than forecasted

The dairy and soy market is poised for modest growth through 2020, according to a report by Canadean, with growth affected by supply and demand as well as political and economic factors.

The most growth will be seen in developing nations with Canadean forecasting China, India and Russia witnessing the highest growth.

[Read more…]