Bakery experts are rising to the current challenges in the space as companies face price fluctuations, reformulation pressures to meet new regulations without compromising on quality, and ensuring they cater to budget-conscious consumers with high demands on health.

Consumers want clean label bakery products with healthy and natural ingredients. They also seek products with functional ingredients that offer clear health benefits and a good nutritional profile. The demands around health are driving a flurry of innovation to eradicate or, at least reduce, E-numbers and chemical additives that have been conventionally used in the bakery sector.

We take a closer look at the key consumer trends and market dynamics driving the bakery space, some of the challenges facing manufacturers and suppliers, and the opportunities for growth and innovation. 

Health claims in bakery

Consumers increasingly demand a range of healthy but high-quality bakery products, which is leading to an increase in health claims on the label. Innova Market Insights data indicates a 2% year-on-year growth in bakery launches with health claims (globally, 2023-2024). 

The top subcategories in bakery launches with health benefits are sweets, biscuits and cookies (27%), bakery ingredients and mixes (25%), and bread and bread products (20%). 

The market research also highlights granulated sugar, wheat flour, and sodium hydrogen carbonate as the top ingredients for bakery launches. 

Global consumers now prioritize health and physical fitness, and this is increasingly reflected in their food purchasing decisions. 

The bakery space is responding by developing healthier solutions and tapping into functional ingredients. Consumers are turning to baked goods for pleasure, but health is also an important factor, according to Gwynnie Hagen, global product category marketing manager of Bakery Food Enzymes at IFF Health & Biosciences.

She tells Food Ingredients First, “Label-friendly products, nutrition scores, and specific product claims are influencing purchasing decisions. Additionally, the bakery space is incorporating functional ingredients such as proteins, fibers, and grains. Here, enzymes can play a vital role in processing rich, dense formulations, ensuring that products retain the desirable sensory qualities that consumers seek.” 

IFF enhances flour and bread performance while aligning with health and label-friendly trends. The company’s Enovera is a versatile product that contains robust baking enzymes that can match the functionality of conventional ingredients like Datem while also reducing gluten dependency in challenging formulations, such as whole grain bread. 

Tapping functional ingredients for health

Hagen notes that consumers can enjoy better nutritional products without compromising on taste and texture. 

She explains how producers can integrate functional ingredients into their product offerings through various applications. 

“Carob powder, used in baked goods and coatings, can help build back bulk, mouthfeel, and texture when reducing cocoa, and when combined with cocoa flavor, extenders can deliver on the rich and satisfying taste consumers expect in chocolate baked goods. Soy and pea proteins enrich products and improve nutrition.”

“Bakery enzymes are crucial for developing better, healthier products. They improve texture and allow products to be fresher for longer. By incorporating health-considered ingredients such as fibers, grains, and proteins, producers can create nutritious offerings that meet consumer demands. This combination of enzymes and functional ingredients results in products that are both wholesome and enjoyable,” she says. 

For example, the enzymes in the company’s Powerfresh and Powerbake series help improve dough stability, proofing, handling, and shelf life,  she explains. 

IFF also helps to support heart health and blood sugar management through its baked goods solutions. Consumer demand for low-sugar bakery products is increasing as consumers become more aware of the health risks of excessive sugar intake. 

“Reducing sugar in bread can be challenging, but it is possible with the right ingredients and techniques. Sugar not only adds sweetness but also affects the texture, color, moisture, and flavor of baked goods. Using enzymes like Grindamyl Plusweet G can help maintain these qualities while reducing added sugar,” says Hagen. 

Vegan solutions in bakery

Loryma, experts in functional wheat ingredients and part of the Crespel & Deiters Group, will showcase its latest innovations for baked applications at the IBA trade fair in May.

With increasing consumer calls for health-conscious food choices, manufacturers are looking for nutritionally sound vegan solutions that also promise advanced dietary values, according to Loryma, which offers special ingredients that boost the protein content, reduce carbohydrates, and improve the overall nutritional profile of sweet and savory baked goods without compromising on taste and texture. 

The company’s ingredients make it easy for manufacturers to differentiate their products on the market with a targeted USP while enhancing processing efficiency.

At this year’s IBA, a trade fair for the baking industry, the company presents its product ranges and concepts, which include Lory Protein and Lory Starch Elara. These boost the protein or fiber content while reducing the carb count. They can be applied to pizza or sweet baked goods such as muffins and tap into the healthy indulgence trend. 

The company will also showcase Lory Crumb in various shapes and colors. This solution helps with the appearance of bakery goods while offering a decorative finish. Loryma says its products ensure perfect adhesion of seeds and toppings, irresistible shine, or perfect browning on baked goods.

Improving the Nutri-Score of brownies

F&B giant Cargill also recently spoke to Food Ingredients First about its significant progress in aligning new product releases with Nutri-Score requirements, particularly in the sweet bakery segment. One of the company’s developments is entering the Nutri-Score race with brownies.

“Cakes and pastries represent the largest sub-category within the sweet bakery segment in terms of volume, value, and new product development. Within this sub-category, brownies are among the top five applications for innovation, showing a promising value growth of 4% (CAGR 2021-2023) and growth of 6% of new product launches,” said Ellie van der Burg, Cargill’s bakery marketing manager, during an interview last December.

She explained how, traditionally, brownies are not associated with healthy indulgence, and most on the market have Nutri-Score rankings of D or E. “However, we aim to change this dynamic by offering holistic solutions that address the growing consumer demand for improved nutritional profiles in cake applications, including brownies.” 

Tapping functional ingredients for health

Hagen notes that consumers can enjoy better nutritional products without compromising on taste and texture. 

She explains how producers can integrate functional ingredients into their product offerings through various applications. 

“Carob powder, used in baked goods and coatings, can help build back bulk, mouthfeel, and texture when reducing cocoa, and when combined with cocoa flavor, extenders can deliver on the rich and satisfying taste consumers expect in chocolate baked goods. Soy and pea proteins enrich products and improve nutrition.”

“Bakery enzymes are crucial for developing better, healthier products. They improve texture and allow products to be fresher for longer. By incorporating health-considered ingredients such as fibers, grains, and proteins, producers can create nutritious offerings that meet consumer demands. This combination of enzymes and functional ingredients results in products that are both wholesome and enjoyable,” she says. 

For example, the enzymes in the company’s Powerfresh and Powerbake series help improve dough stability, proofing, handling, and shelf life,  she explains. 

IFF also helps to support heart health and blood sugar management through its baked goods solutions. Consumer demand for low-sugar bakery products is increasing as consumers become more aware of the health risks of excessive sugar intake. 

“Reducing sugar in bread can be challenging, but it is possible with the right ingredients and techniques. Sugar not only adds sweetness but also affects the texture, color, moisture, and flavor of baked goods. Using enzymes like Grindamyl Plusweet G can help maintain these qualities while reducing added sugar,” says Hagen. 

Vegan solutions in bakery

Loryma, experts in functional wheat ingredients and part of the Crespel & Deiters Group, will showcase its latest innovations for baked applications at the IBA trade fair in May.

With increasing consumer calls for health-conscious food choices, manufacturers are looking for nutritionally sound vegan solutions that also promise advanced dietary values, according to Loryma, which offers special ingredients that boost the protein content, reduce carbohydrates, and improve the overall nutritional profile of sweet and savory baked goods without compromising on taste and texture. 

The company’s ingredients make it easy for manufacturers to differentiate their products on the market with a targeted USP while enhancing processing efficiency.

At this year’s IBA, a trade fair for the baking industry, the company presents its product ranges and concepts, which include Lory Protein and Lory Starch Elara. These boost the protein or fiber content while reducing the carb count. They can be applied to pizza or sweet baked goods such as muffins and tap into the healthy indulgence trend. 

The company will also showcase Lory Crumb in various shapes and colors. This solution helps with the appearance of bakery goods while offering a decorative finish. Loryma says its products ensure perfect adhesion of seeds and toppings, irresistible shine, or perfect browning on baked goods.

Improving the Nutri-Score of brownies

F&B giant Cargill also recently spoke to Food Ingredients First about its significant progress in aligning new product releases with Nutri-Score requirements, particularly in the sweet bakery segment. One of the company’s developments is entering the Nutri-Score race with brownies.

“Cakes and pastries represent the largest sub-category within the sweet bakery segment in terms of volume, value, and new product development. Within this sub-category, brownies are among the top five applications for innovation, showing a promising value growth of 4% (CAGR 2021-2023) and growth of 6% of new product launches,” said Ellie van der Burg, Cargill’s bakery marketing manager, during an interview last December.

She explained how, traditionally, brownies are not associated with healthy indulgence, and most on the market have Nutri-Score rankings of D or E. “However, we aim to change this dynamic by offering holistic solutions that address the growing consumer demand for improved nutritional profiles in cake applications, including brownies.” 

Eco-friendly bakery

Another key trend driving innovation in the bakery sector is developing solutions that align with looking after the planet. Globally, consumers are also seeking sustainable, environmentally-friendly bakery solutions with a lowered carbon footprint and tapping ingredients that have less of a negative impact on the planet. 

ADM is one company that is helping to keep pace with the demand for more sustainable solutions. Last year, the company introduced Nature’s Gold Regeneratively Sourced Baker’s Bread Flour. The wheat for this flour is grown by ADM’s network of UK farmers who leverage regenerative farming practices.

“Made from wheat grown using regenerative farming methods and produced via our milling operations powered by 100% renewable electricity, this flour is the perfect choice of flour for bakers looking to boast premium sustainably sourced bakes,” the company says on its website. 

“Our network of British farmers is focused on improving their soil health and farm resilience by implementing regenerative agriculture practices. These practices will help restore ecosystems, safeguard our planet, and assist you with your ESG goals.” 

Another sustainable, innovative bakery solution that targets plant-friendly food is Kerry’s Biobake Fibre enzyme solution. This patented solution offers a superior finished bread quality, improves volume and softness, and reduces operational costs by maintaining good dough processability and ease of slicing.

According to the company, Biobake Fibre delivers productivity gains by increasing bread volume by up to 24% and softness by up to 55%. Because of the improved softness and better shelf life, food waste is expected to be reduced.

Future bakery developments

IFF highlights several developments expected in the bakery space throughout 2025 and beyond. Hagen cites the cost-of-living crisis driving greater importance to sustainability through waste management and shelf life improvement. 

“We see a need for further exploring technologies to enhance shelf life and profitability while also decreasing waste through the provision of long-lasting products that reduce returns. Enzymes are an innovative solution to help manufacturers prevent staling and retain softness and moisture in their products. Enzymes can be used to improve freshness, such as in bread with Powerfresh, in tortillas with Powerflex, and in cakes with Powersoft.”

“Additionally, there is an introduction of high-fiber, high-protein, and whole grain breads with added seeds and nuts, as well as low-sugar and whole grain bake-off products that are gaining popularity. Furthermore, innovations in baking technology, such as automation and AI, are improving production efficiency and product consistency,” she concludes.