2023 is coming to an end. This year, the development of bread and baking categories has gradually stalled, and homogeneity has become increasingly severe.

In recent years, whether it is Western, traditional Chinese or new Chinese baking, the development seems to be unsatisfactory. Especially this year, many baking brands are facing the dilemma of declining performance, weak growth, and even closing stores. At the same time, capital investment in the baking track has returned to rationality. There are even many people shouting that the baking circle is too dangerous, run away!

01 The reshuffle of the baking track is accelerating, and the overall performance is sluggish

Hongcan big data shows that the number of new stores opened in the bread and baking category nationwide in the past year is 122,017, and the number of closed stores is 120,143. The growth rate of the total number of bread and baking stores nationwide in the past year is only 1%!

At the same time, the registration and revocation of bread and baking related companies in 2023 is also unclear, and the registration and revocation ratio shows an overall fluctuating downward trend. In 2023, keywords such as "closing stores", "business contraction", "losses", "bankruptcy" and "liquidation" have been accompanying the development of the baking track.

In this context, many participants in the baking track have failed, such as the old Western baking brands Christine and 85 degrees C, and the so-called "new Chinese baking twins" Hutouju·Shandong Biscuit Shop and Momo Dessert Bureau.

Below, we will analyze the development of the baking track in 2023 in detail.

02 New Chinese baking started high and ended low, falling into the trap of homogeneity

With the rise of the concept of "new Chinese style", new Chinese baking once soared, driving the entire bread baking industry to roll inward, and some brands even had "multiple rounds of financing in a year". However, when the track gradually calmed down, some well-known brands began to experience capital slowdown and consumer cooling-off period, and fell into the dilemma of loss, closure or even bankruptcy, showing a trend of "high-profile start and low-profile end".

And the reason why these new Chinese bakings are facing the dilemma of high opening and low end is largely because the new Chinese baking track faces many problems such as severe homogeneity, high innovation cost, and non-rigid demand. For example, once a brand's "national trend" product is successfully launched, it will soon be copied or copied. In addition to the similarity of products, many brands have highly similar initiatives at the marketing, management and strategic levels.

03 Challenges and opportunities coexist, and there are still opportunities in the baking track

Despite facing many challenges, bread baking is still a catering category worthy of attention, and there is still a large market development space. According to Hongcan Big Data, the national bread baking market size is expected to exceed 127.6 billion yuan in 2023, an increase of more than 20 billion yuan over the size in 2022, a year-on-year increase of more than 20%.

It is worth mentioning that in the baking track with a scale of 100 billion yuan, there has not been a national chain baking brand with more than 1,000 stores in the bread baking category. Hongcan Big Data shows that in 2023, only 3.1% of catering brands in the bread baking category have more than 500 stores nationwide, while snacks, fast food and beverages account for more than 30%. It can be seen that branding and chain operations are still the major development trends of the bread baking industry. Some industry insiders said, "We also hope that baking can grow slowly, without rushing for success, so as to give birth to a new catering force like tea drinks!"

Although the overall scale of the baking track is not high, there are still a number of brands with relatively large store scale. Hongcan Big Data shows that as of November 2023, baking brands such as Holiland, Happiness Cake, and Yuanzu Food have more than 700 stores, and baking brands such as Bao Shifu and Zhan Ji Taosu have more than 150 stores.

In addition to leading in scale, these brands also have a relatively impressive overall revenue performance. Whether it is Yuanzu Food, Holiland, or new Chinese baking brands Bao Shifu and Luxi River, they have stood out from a number of baking brands through innovative measures and achieved good revenue.

For example, Luxi River, a new Chinese baking brand founded in 2013, has adopted the development model of "offline direct sales + front store and back factory + online e-commerce". In the first 10 months of 2019-2023, the annual compound growth rate of the number of Luxihe stores reached 45%. It is expected that the revenue this year will exceed 2.5 billion yuan.

Hao Li Lai, which has "established itself at the age of 30", has taken the "younger version of the old brand" to the extreme. Through the whole set of "big single products + IP joint name + new media marketing", it currently has more than 30 joint names, accurately hitting the preferences of the Z generation consumer group, and standing out among a group of baking veterans.

In short, although the bread baking track is experiencing the pain period of the market's high heat and ebb tide, its long-term development opportunities have not changed, and the market is still exerting its strength. A group of baking brands that strive to find differentiation and focus on innovation still have the opportunity to blossom and bear fruit in this market of hundreds of billions of yuan.