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Dynamic development of the Polish bakery industry

Poland is the 5th largest producer of bakery products in the European Union, as indicated in the Pekao bank report “Baking industry. Good results in 2023 and moderately optimistic prospects for the future.” Our country is also one of the TOP10 EU exporters. Polish products are sold both to other countries of the European Union and outside it.

Assorted bakery products including loaves of bread and rolls

The bakery industry leads the food sector

The bakery industry is the leader in the Polish food sector in terms of the number of companies, with almost 8 thousand . Every fifth food company in Poland is involved in the production of bakery products. The sector is characterized by high profitability and significant capital expenditures. The sector is fragmented. Only about 300 companies employ 10 or more people. 30 of them are large enterprises with more than 250 employees. The largest companies generate 60% of the industry’s revenues. The bakery industry employs over 100,000 people, ranking 4th in the EU.

Importance on the domestic market and dynamic growth of exports

The bakery industry, accounting for almost 5% of the domestic food industry’s production in 2022. It plays a key role in the Poland’s food economy. The fresh bread segment accounts for more than 2/3 of the production value on the Polish market, dominating the structure of the industry. Bread does not seem to be a typical export product. However, the export of bakery products from Poland is growing dynamically, especially in the confectionery segment. It generates 20% of the bakery industry’s revenue. This is a smaller share than in the entire food industry, but still significant. Within a decade, there was an increase in the export of bakery products from 10% to 20%.

Intra-Community trade and exports outside the EU

EU production is concentrated in countries with a large number of consumers. France and Germany account for more than 50% of production in the EU, with Poland in 5th place with a 5% share. Our country distinguishes itself by one of the highest growth dynamics in recent years. The last two years have brought a dynamic increase in the value of intra-Community trade in bakery products, mainly due to higher prices. The average growth rate in 2022-23 was almost 20%, exceeding previous years. Trade volumes grew more slowly, highlighting the role of prices as the main driver. Poland, as one of the leading producers of bakery products, ranks 7th in terms of turnover and 4th in terms of volume in intra-EU trade. In the years 2015-2023, Poland increased its share in intra-Community trade. The increase was 2 percentage points, which proves the high pace of development.

Rising transaction prices also supported the value of exports from the EU. In 2023, despite a 2% drop in volume, the value of exports increased thanks to a price increase. Poland ranks among the top ten largest exporters (8th place) of bakery products from the EU. It stands out from the leaders thanks to the highest growth rates in 2015-23, increasing its share in EU exports by 2 percentage points.

Main markets

Polish bakery products reach almost 100 countries. In the case of bread, 92% of exports go to EU countries. Mainly due to the limited possibility of transporting these products over long distances. Confectionery has a more diverse geographical structure, with the UK as the second largest consumer outside the EU.

The Polish bakery industry has great potential for the development of exports to other EU countries. Imports, which are increasing in EU countries, and Polish’s low share in these markets create opportunities for expansion.The main markets for Polish bakery products are Germany and the Czech Republic, where Poland already has a strong position. Poland is also active in the Scandinavian countries. However, there is room for growth in Western European markets such as France, the Netherlands, Austria and Spain.

The United Kingdom is the most important non-EU market for Poland, with growth potential in some product segments. Poland also had a strong position on the Russian and Ukrainian markets. Currently, these directions are limited by political and economic factors. Other potential markets include the US, Switzerland and Norway. There, the activity of Polish companies is still lower than that of competitors from other EU countries.

The Polish bakery industry has significant potential for development both inside and outside the EU. The key challenge will be to increase its presence in large and wealthy Western European markets and to make fuller use of opportunities in non-EU markets.

Source: Bank Pekao – „Branża piekarnicza. Dobre wyniki w 2023 roku oraz umiarkowanie optymistyczne perspektywy na przyszłość”.

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