The global baking powder market is consolidated with the majority of the revenues being shared by companies such as Clabber Girl Corporation, ACH Food Companies Inc., and Caravan Ingredients, Inc. Promising players such as Weikfield and Hansells Food Group are conducting forward and backward integration to take advantage of economies of scale and reduce the production cost. Transparency Market Research (TMR), in its new study, reports that many companies are supplying products to smaller retailers at lower prices, further intensifying the competition.

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Major buyers of baking powder include hypermarkets, supermarkets, and industrial buyers for making pizzas, burgers, and breads. Big retailers such as Wal-Mart and Tesco are buying baking powder directly from manufacturers in bulk, thus enjoying economies of scale in the market by eliminating distributors in the supply chain. Since the consumption of baking powder by the end consumer is very less, manufacturers are channelizing their products through wholesalers or retailers. Thus, the bargaining power of buyers is expected to be high in the coming years.

Changing Food Habits Drive Demand for Baking Powder

The urbanization of population has brought many changes in the food habits and consumption patterns of people. A radical shift in the socio-cultural behavior due to cultural borrowing has led to nuclear families and rise in the number of working women. Moreover, increasing disposable income has also led to a rise in the demand for baking powder-based food such as waffles, cakes, pastries, donuts, pizzas, and burgers. “An increasing consumption of junk food owing to busy lifestyle is thus behind the growth of the global baking powder market,” states a TMR analyst.

Owing to increased awareness regarding health and wellness, the consumer’s demand for a well-balanced meal are met through high fiber breads, nutrition bars, and breakfast cereals. These health and wellness oriented food products require baking powder as an ingredient, thus driving their demand.

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Substitution by Baking Soda to Threaten Demand for Baking Powder

Baking soda is partly baking powder and soda. Although they differ in their chemical composition, the products can be substituted for each other owing to their similar properties. Baking soda is stronger and has a longer shelf life than baking powder. Moreover, the consumer awareness regarding the difference between the two products is very little. Thus, the substitution of baking powder by baking soda is restraining the growth of the baking powder market.

Another factor challenging the demand for baking powder is the growing awareness among people regarding the adverse effects of consuming junk food such as cakes, burgers, and pizzas. The rising concern regarding the high fat, calorie, and sugar content in junk food and the lack of vitamins, proteins, and minerals in these foods are discouraging people from consuming them. The baking powder market is thus expected to receive a major setback owing to a decline in the consumption of junk food, says TMR.

Development of Low Sodium Baking Powder Improves Public Health, Boosts Demand

Although sodium intake is important for the human body, excess of it can lead to dehydration, hypertension, high BP, and even heart failure. Owing to the diet pattern of people living in Europe and North America, sodium as high as 75% is being ingested by consumers. Thus, manufacturers and governments are concentrating on product innovation to help reduce sodium content in baking powder, without affecting the quality. Such initiatives to improve public health and save major health-related costs, will result in product innovation and differentiation, thus creating opportunities of growth in the market.

According to the report, the global market opportunity in baking powder is expected to rise from US$2.72 bn in 2015 to US$3.36 bn by 2019. On the basis of product, the market is expected to be led by the tartrate segment, followed by the phosphate segment. By geography, Asia Pacific is expected to lead and account for 37.1% of the global baking powder market by 2019.

This information is based on the findings of a report published by Transparency Market Research titled “Baking Powder Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2013 - 2019.”

The global baking powder market is segmented as follows:

By Products
Phosphate-based Baking Powder
Anhydrous Phosphate-based Baking Powder
Sodium Aluminum Sulfate Phosphate-based Baking Powder
Tartrate-based Baking Powder
Aluminum-free Baking Powder
Phosphate-free Baking Powder
Others

By Region
Europe
North America
Asia Pacific
Rest of the World