INGREDIENTS FOCUS: Bakery
Bakery has recorded fantastic growth rates in the Middle East region
Bakery has recorded fantastic growth rates in the Middle East over the years, but complexities, diets and rising prices have changed the baking landscape. Jamie Knights investigates
Last year Caterer Middle East featured an article on the changing face of bakery in the region. A year on we re-visit the complex sector to establish if there have been any changes, whether the fortunes of the industry have risen and what trends are dominating the market.
Research by Euromonitor International sheds vital light on the changing face of bakery, in terms of cost, health and a more knowledgeable consumer base.
Baked goods saw retail value sales growth of 7% in 2011, compared to the corresponding figure of 6% seen in 2010. Baked goods saw retail volume sales growth of 5% in 2011 to reach 386,900 tonnes, compared to the corresponding growth of 6% seen in 2010.
Much of the higher sales growth can be attributed to the recovery in the economy alongside the fall in rental prices.
Consumers continued to limit their expenditure on eating out in 2011, preferring instead to allocate their rising disposable incomes towards purchasing higher quality grocery products, good news for the retail sector, not so good for the outlets.
Last year there was a focus on the rising costs associated with bakery and despite continued intervention from the government, the average unit price of baked goods increased by 2% in 2011.
Euromonitor International stated that while some manufacturers complied with the new official price lists, others kept their prices the same.
But there were additional factors in the rise, one of which was consumer health concerns, whereby more expensive whole grain products saw gains in market share over white bread.
Outlets benefitted from offering a wide variety of baked goods at competitive prices, but there was increased competition for standalone bakeries in the form of in-store bakeries which became increasingly popular in supermarkets.
So while the figures set the scene, what exactly do the chefs, outlet owners and suppliers feel about the state of the bakery industry in the Middle East? Blossom Sweets executive pastry chef Aaron Maree believes the region is still being served well by the “boom times and the influx of michelin starred chefs”.
“The standards have grown and the expectations of quality have also,” he continues.
“Consumers are smart and they know the quality they desire and the price they are willing to pay for it. The Middle East bakery and pastry market has come a long way and every year that quality raises the bar a little more.”
Maree is so confident he believes one day “people will look to the Middle East for the modern pastries of the world rather than Europe as the skill set is getting higher by the year”.
The Ritz-Carlton Bahrain Hotel and Spa’s executive pastry chef, Antony Fernandez, agrees that customers are now far more informed about bakery products “focusing on quality and an authentic taste”.
“At the moment trends in the Middle East are freshness, the crispiness, the flavour of good bread and a good croissant,” he states.
But pastry chef, resort operations – F&B, Atlantis the Palm, Achala Sanjeewa Weerasinghe, believes there are not many bakery outlets in the region, particularly when compared to Europe.
Although this may be the case, pastry chef at Monte-Carlo Beach Club, Saadiyat Nuwan Prasanna Hewamanage, who handles four F&B outlets, says the bakeries that are open are doing “fancy things”.
“(They are) customising cakes, allowing the customers to actually request a specific type of design or flavour,” he explains.
“Another interesting development in the bakery sector is the popularity of miniature desserts, which focus more on the small details of the cakes often combining strong flavours with organic and healthy alternative ingredients.”
Hossam Shabaykh, food service manager, Aramtec says the company has witnessed an increasing demand for ready made products, such as tart shells, wafer products and macaroons as well as frozen bakery products “due to their high convenience”.
It is certainly promising that the number of decent bakeries is on the rise and founder and managing director of Maison Sucre, Nadine Maalouf, says they are here to stay, however, she adds that “things that are classified as trends here have been classified as classics in the west for decades”.
Despite this Maalouf says one area of innovation in the region has been “combining desserts relative to the Arabic culture, and modernising it for today, which is also a trend that’s here to stay”.
Someone who asserts bakery in the region “is really starting to take off now” is Fairmont Bab Al Bahr’s, executive pastry chef, Dragan Rucnov.
“There is a movement towards European-style pastry shops that specialise in gourmet and bespoke chocolates, long fermentation breads of various varieties, specialised pastries, as well as a branded retail line for take away gifts and for at home enjoyment,” he enthuses.
“It is also becoming more of a meeting place for friends, and you especially see this trend emerging amongst the local population, particularly with women.”
But Yas Viceroy executive pastry chef, Chinthaka Chandimal Bandara Wekadapolae, warns that competition among bakeries is high.
“They need to be known for their quality and not for being costly as well as being prepared for the fact people in the Middle East like to eat breads anytime of the day.”
On the rise?
Growth rates in the bakery sector are expected to soften as the market continues to mature, but sales growth is expected to continue in line with population growth.
The average unit price of baked goods is expected to increase by 5% over the coming year driven by rising raw material prices. Wheat and sugar prices are expected to rise and manufacturers will continue to attempt to pass the cost on to consumers.
There is a threat to the standalone though as Euromonitor International says it expects supermarkets and hypermarkets will continue to gain retail value sales share.
However, traditional bakeries will remain popular for special occasions, particularly Ramadan, when demand for traditional pastries and breads peaks.
This is not only because traditional bakeries are viewed as offering higher quality products, but also because families have a tradition of visiting particular bakeries on special occasions.
For bakeries to succeed, especially standalone outlets, it is important they cater to these changes in taste, cater to dietary requirements and find a niche that cannot be replicated by supermarkets with in-store offerings according to Shabayk of Aramtec.
He says the strength of the marketing campaigns and the reputation attached to franchised operations will always make it tougher for standalones to compete. He adds that he has seen many withdraw from the market already.
“The only way to stand against big bakery/pastry chains is to upgrade quality and target new segments of the market and offer different products,” he adds.
Outlets will have to focus on introducing healthier products as increasing consumer awareness of the health benefits of multigrain flour is likely to result in a demand for such products, particularly bread.
In other areas of baked goods, such as pastries and cakes, reduced-fat or reduced-sugar products have been dominated by international players. It is likely that the popularity of diet products in biscuits and snack bars will translate into an influx of diet-orientated baked goods. Domestic players have been warned to update their product portfolios in keeping with these trends, in order to maintain their competitive edge.
The expanded offering of multi-grain artisanal breads will appeal to health-conscious consumers, particularly in light of the government’s diabetes and obesity awareness campaigns.
Standalone Vs. Chains
When it comes to standalone bakeries compared to bakery chains there are a number of differences and challenges, but is there a direct competition between the two?
Rucnov doesn’t believe so and says as someone who just enjoys pastry, “there’s definitely a place for both the standalone bakery and the franchise like Krispy Kreme and Dunkin Donuts”.
“Aside from there being a market for both, the latter is something that would appeal more towards children (as their first pastry experience does commonly come from these types of chains), to those ordering in large quantities from a flavour and price perspective,” he adds.
Rucnov adds that standalone bakeries cater to those looking for specialised and artisanal pieces, high quality ingredients and “the opportunity to stay and enjoy their pastry with a specialty coffee or beverage.”
Maalouf concurs, and believes both standalone and chains have their own customers and as long as they are successful throughout the region that means that there is a demand for their products.
Despite this, Wekadapolae, maintains that standalone bakeries need more marketing strategies compared to chains to “establish and promote their products”.
“For chains there is no need for marketing strategies because their names and products are well known by most customers,” he says.
Weerasinghe agrees with Wekadapolae and believes companies such as Krispy Kreme are very successful on their branding “because of its digital business strategy and word of mouth”, while standalone bakeries “purely rely on walk in customers”.
Hewamanage also sees a great deal of difference between the two types of bakery.
“Standalone restaurants can change their menu or their cooking style very often and they can mirror seasonal ingredients and trends to create a constantly evolving menu,” he begins.
“The chain establishments on the other hand have their own standards, finalised recipes and their own style, which has proved successful in other markets and for that reason must remain constant.
“Standalone shops cater to certain specific market groups of people depending on style, taste and appearance of the products, especially the customised ones. Chain establishments cater to the general public, mass market and have developed a way to appeal to the general taste of everyone.”
Head chef, Sylvain Coulon, Pascal Tepper French Bakery, says this differentiation comes from the relationship with diners.
“We also listen to them and take in all their feedback on how we can improve our services and our menu into consideration.”
“The flexibility we enjoy as a standalone bakery allows us to adapt and cater to supply and demand,” he says.
Both Maree and Fernandez agree that the majority of chains usually focus on a specific item such as donuts or cupcakes, adding that for this reason there will always be a demand for bakeries.
“A boutique or pastry shop offers a wide range of different products, including tailor-made cakes and pastries, in order to cater to the demands and individual preferences of guests and customers,” Fernandez concludes.
Supplier Focus: Pidy
Pidy is a Belgian family business aimed at innovating ready-to-fill pastry products; something that account manager export, Ilse Suffis, says is a growing trend in the world of bakery: “Rather than spending time, resources, manual labour and raw material in making pastry bases, the readymade, ready baked, ready-to-fill solution, allows the pastry chef to show their creativity by decorating and finishing the cakes, appetizers, mini desserts, wedding cakes, celebration pastries etc.”
Furthermore, the company has seen a real demand for healthier products and has adapted its offering to cater to this.
“Pidy was the first company to produce non-hydrogenated puff pastry vol au vents, without transfats,” Suffis asserted.
“There is a tendency for less sugar, less fat and pure ingredients - clean recipes.”
As a world leader in dry puff pastry, Pidy is also competitive in short crust, fonçage dough, choux pastry and sponge cakes as well as unique Pidy pastries.
With three production units in Belgium, France and the USA, commercial business units in Benelux, France, UK, Germany, USA , Pidy is a supplier that supports customers in more than 50 countries worldwide.
According to Euromonitor International, bread will remain a staple food item for most nationalities in the UAE, while traditional bread varieties, such as baguettes, pitta and sliced loafs, will remain popular.
Rising bread prices became a central focus of the Ministry of Economy’s Consumer Protection Department (CPD) in 2011. Despite the increasing cost of raw materials, particularly wheat and sugar, manufacturers were ordered to lower bread prices for the second consecutive year. However, consumers complained that manufactures in some emirates, such as Ras al Khaimah, refused to adhere to the new price list.
Unpackaged/artisanal bread saw the most dynamic retail value sales growth of 8% to reach AED 422 million (US $115 million) in 2011 and benefitted from its long-standing popularity in the country and the consumer perception that it is fresher than packaged bread. The influx of supermarkets and hypermarkets also contributed to the performance seen by unpackaged/artisanal bread, as most such outlets bake their own bread daily.
Aramtec has revealed that the majority of bread here in the region is produced from pre-mixes for which the market is huge, especially for bread rolls in hotels that are mainly used for functions and banquets.
Mochammad Arief, pastry chef The Address Dubai Marina is a big fan of Valrhona chocolate. “Valrhona chocolate uses such a highly quality cocoa and is considered one of the foremost chocolate makers in the world,” says Arief.
Arief also favours fresh fruit puree because of the “consistency in texture, colour and flavour” and adds that fresh yeast is better than dry yeast because when you use it, the resulting bread has a better taste and texture.”