Bakery Product Industry ESG Thematic Report, 2023

Environmental, Social and Governance (ESG) in Bakery Product Industry

In the current scenario, introduction of Environmental, social and governance on investment platform as well as strategy building, or decision-making process contributes to a responsible investing. Growing awareness of ESG among various stakeholders from consumers to investors have been prevailing since the past decade.

Bakery Product segment has been growing simultaneously with hectic lifestyle among consumers necessitating preference for fast food among them. Especially cakes and pastries segment has been growing rapidly with new varieties and consumer preferences. Supply chain and distribution channel for bakery segment has been strong and well established. Research shows fast foods contributes to unhealthy eating habits leading to significant negative health impacts for consumers. Considering the quality of employment, these companies require having well defined human rights and labor rights policy throughout their operation and distribution channels. Introducing sustainable packaging can significantly reduce waste coming from packages and/or plastic covers.

The companies in focus are required to have sound sustainability policies, keeping up with legal frameworks, regular target updates to ensure a sustainable future.

ESG Trends

The bakery product segment is currently a booming market. Firstly, given the solid supply chain and distribution channel, the availability of products to everyone has been well appreciated. Even though these companies depend on dairy products and industries, trend of shifting to more environmentally responsible (SDG12) procedures have been witnessed.  In terms of affordability, most of the essential food products have been affordable to most of the economic classes around the world. These companies do have CSR activities ensuring nourishment for hungry and needed end users (SDG 10).

However, with its rise, social aspects as well as environmental aspect are areas of concern in the market. This segment requires a significant development sustainable packaging (SDG 12) and waste disposal practices to eliminate plastic use with specific targets. Also, in terms of health impacts, since most of bakery products have been preferred due to sedentary and hectic lifestyle, negative health impacts are on the rise. Even though Technological innovations like Individual Quick Freeze Technology (IQT)have been introduced, consumers are preferring fresh bakery products and it poses adverse health impacts.

ESG Challenges

The main challenges faced by Bakery Product industry is the negative health impact of the product with regards to SDG 3 (Good health and Wellbeing). There have been various studies pointing out bakery products and/or fast foods poses great threat to human body. Bakery products have been contributing significant impact to diseases like Diabetes, metabolic syndrome, hormonal changes etc. Due to this, bakery products industry has been including legumes, oats, probiotics, cereals, gluten free products, sugar free products etc. to inculcate better, healthier, and sustainable future. Considering SDG 12(responsible Consumption and production), Bakery segment creates huge amount of waste from packages and innovative sustainable packaging strategies are emerging to cope with the situation. As bakery product has been high in demand with a regular flow, human resource or work force required is very high. Even though there are sound Human rights and labor right policies, various disputes have been arising due to lack of flexibility in the employment for example adequate rest breaks, uneven work hours depending on season or demand etc. Further down the line, companies are enforcing strong whistleblower policies within their company and distribution channels.

Growth of the Bakery Product Market

The bakery products market size is valued at USD 251.1 billion by 2025, expanding at a compound annual growth rate (CAGR) of 3.2% during the forecast period. Increasing consumption of ready-to-eat foods across the globe owing to hectic lifestyle is expected to improve the product demand over the coming years. In India, FSSAI Act supervises bakery products, mass production of this segment requires a scientific study, 8 general obligations mentioned and should be in accordance with these mandatory requirements as per FSSAI regulations for bakery products. 

Key Companies in this theme

    • Kraft Food Group, Inc.

    • Nestle S.A.

    • Bimbo Bakeries USA

    • Britannia Industries Ltd.

    • General Mills

Scope of the Bakery Product Industry ESG Thematic Report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

Key Benefits of the Bakery Product Industry ESG Thematic Report

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the Bakery Product space, globally

    • Key insights into environmental developments and ESG issues affecting the theme

    • Identifying ESG risks and opportunities to business among leading players in the Bakery Product

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and find opportunities for investment into the sector