Almost all the packaged food industries have been largely affected due to the pandemic as nationwide lockdown was announced which caused a huge disturbance as many factories were closed. Transport restrictions are especially obstructive for fresh food supply chains and also limited access to markets. Covid-19 has constrained organisations and governments to grasp the advanced change development, making the home office an ordinary everyday practice and uncovering that numerous overseas conferences can be video gatherings instead.

At the beginning of the Covid-19 flare-up, there has been a noteworthy increment in demand, maybe out of the dread of shortage. This indirectly caused people to hoard goods which lead to shortage of essential goods in the market. But, breads type items restricted stock piling due to its short shelf life. Even when the lockdown was lifted, manufacturers faced an even greater barrier  absence of labour as thousands of labourers left cities and went back to their home town.

Reduced orders as consumption changes

Covid-19 has affected bakery players in different ways. With foodservice representing as much as 70% of their sales, frozen bakery players have seen reduced orders as food consumption changes from restaurants to home kitchens. Meanwhile, retail players  mostly in the fresh bread segment  rushed to feed a population that from one day to the next was told to stay at home. Whereas the biscuit segment outperformed due to advantage of longer shelf life & convenient food to overcome food shortage in the home.

However small bakery counters, restaurants, eateries and so on were not functional which affected the utilisation of frozen bakery products to great extent. Reduced grocery visits are negatively impacting impulse buying, and many self-service bakery stations have been closed as a part of lockdown. Home baking has served as a way for people to both spend time at home and get access to fresh products. 

QSR to up retail in frozen bakery

While drive-thru and curbside pickup have the potential to offer the ideal solution for safer, quicker customer interactions, quick-service restaurants will increase retail in frozen bakery such as burger, sandwich, rolls, pastry. This purchasing power is mostly portrayed by the younger generation. It is a hard reality for an industry that has shut down facilities to tackle dropping volumes in the past years. But fresh bakeries have quickly adapted to ensure supply, by pivoting production away from foodservice items, optimising SKUs, and focussing on top performers for efficiency. 

Quick-Service Restaurants (QSR) were affected to some extent. Their established drive-thru structure and the takeout culture have benefited QSR. Other segments, from fast casual to fine dining, have been hardly recovering as restaurants were not permitted. Home deliveries were allowed during the later date of unlock situation. QSR performance directly affects frozen bakery players, as burger buns, sandwich rolls, and breakfast goods represent the major chunk of their production. The breakfast menu has been temporarily suspended as people have no reason to leave home. 

Accelerated trends, reversed others

The crisis has accelerated trends, reversed others and created new ones. Online groceries, for instance, went from just a convenience to being an essential service, as many were forced to join delivery platforms. The post-Covid-19 consumer is likely to demand new and better options. If it is true that the economic slowdown will make consumers cautious to spend, the food industry could appeal to customers using the uniqueness of the current event.

Sustaining the optimistic view on retail and better products, frozen players will continue to benefit from the in-store bakery movement once the frequency of groceries shopping resumes.

Globally the frozen bakery products market has recorded excellent development throughout the most recent few decades. The market size is anticipated to reach US$23.48 billion by 2022, at a CAGR of around 7.9% from 2016. Increase in demand for breads and its variations by the food administration industry is relied upon to push the interest for the demand for frozen bakery products during this period.

The Asia-Pacific market is anticipated to develop at the most noteworthy CAGR during the figure time-frame as per researchers. Factors such as changes in food consumption trends, rising population and increasing disposable income in countries such as India and China are expected to gain potential demand in frozen baked products.

(Indani is head, food safety regulatory advisor -trainer and Shah is food safety advisor - trainer at SafeFoodz Solutions, Mumbai. They can be contacted at haccp.sbi@gmail.com)