The frozen bread market has experienced rapid growth since the COVID-19 pandemic. According to the Japan Frozen Food Association, production of frozen bread and confectionery increased by approximately 25% from 2020 to 2023. This market expansion has brought new business opportunities to the bakery industry, which was traditionally centered on in-store sales. However, many independently-owned bakeries are currently hesitant, thinking “frozen bread is not authentic” or “it seems technically difficult.” This article introduces the current state of the frozen bread market and practical strategies that small and medium-sized bakeries can implement.
Current State and Growth Factors of the Frozen Bread Market
The expansion of the frozen bread market is related to multiple social factors. First, home consumption of bread increased due to stay-at-home orders during the pandemic. Second, the increase in dual-income households has heightened demand for convenient, delicious bread.
Particularly noteworthy is the improvement in frozen bread quality. Advances in flash-freezing technology have made it possible to reproduce textures and flavors close to freshly baked bread. Not only major manufacturers but also small regional bakeries are increasingly achieving nationwide expansion with their unique frozen bread products.
- Market size: Approximately 80 billion yen as of 2023 (15% increase from previous year)
- E-commerce sales ratio: Accounts for approximately 30% of total sales
- Main customer demographics: Women aged 30-50, single-person households, elderly households
- Growth forecast: Expected to exceed 100 billion yen by 2025
Benefits of Bakeries Entering the Frozen Bread Business
Entering the frozen bread business brings many benefits to bakery management. The greatest advantage is the expansion of sales areas. Traditional trade areas with a 2-3km radius can expand to nationwide sales.
Improved Profitability
Frozen bread has a longer shelf life, significantly reducing waste. Additionally, batch production can reduce ingredient costs. A bakery in Kanagawa Prefecture that started a frozen bread business saw frozen bread account for 30% of sales and achieved a 15% improvement in profit margins.
Brand Strengthening
E-commerce sales also contribute to increased store recognition. Many distant customers actually visit the physical store, creating tourist attraction effects. Social media sharing effects are also high, leading to improved appeal to younger generations.
- Nationwide expansion of sales areas
- Improved profit margins through waste reduction
- Enhanced manufacturing efficiency
- Increased brand recognition
- Development of new customer segments
How Small and Medium Bakeries Can Start a Frozen Bread Business
While frozen bread business may seem to require significant equipment investment and technical difficulty, it can be started reasonably through a step-by-step approach.
Step 1: Product Selection and Trial Production
First, select products from existing items that are suitable for freezing. Generally, breads with high fat content or simple breads with few ingredients are suitable for freezing. We recommend starting with shokupan (Japanese milk bread), croissants, and melonpan (melon bread).
Step 2: Minimal Equipment Investment
To minimize initial investment, start by introducing commercial freezers (-18°C or below). Flash freezers can be added later. For packaging, a vacuum packing machine is sufficient.
Step 3: Building Sales Channels
E-commerce sites can utilize existing platforms (Rakuten Ichiba, Yahoo! Shopping, etc.) to reduce initial costs. Building your own website can be considered after the business gains momentum.
- Initial investment estimate: 500,000-1,000,000 yen (freezer, packing machine, initial inventory)
- Recommended starting products: Shokupan, croissants, melonpan
- Time to sales launch: Approximately 3 months from preparation start
- Required permits: Confectionery manufacturing license (already obtained for existing stores)
Key Points for Success
There are several important points for succeeding in the frozen bread business.
Thorough Quality Control
The quality of frozen bread is determined by its taste when thawed and reheated. It’s important to establish optimal freezing and thawing methods and provide customers with easy-to-understand instruction manuals. Thorough temperature control record-keeping is also essential.
Story-driven Marketing
Rather than simply selling “frozen bread,” appeal with stories like “artisan techniques at home” or “delivering fresh-baked deliciousness.” Video distribution of the manufacturing process and articles conveying artisan dedication are also effective.
Optimizing Delivery Systems
Delivery costs for frozen products tend to be expensive. It’s important to improve delivery efficiency per shipment by setting minimum order amounts and offering bulk purchase incentives. For community-focused businesses, limiting delivery areas is also a strategy.
Conclusion
The expansion of the frozen bread market represents a significant business opportunity for small and medium bakeries. Through a step-by-step approach with minimal initial investment, it’s possible to enter new markets while minimizing risks. The key is to respond to changes in customer lifestyles while leveraging existing strengths. With dedication to quality and effective marketing, even small regional bakeries can deliver products loved by customers nationwide. We recommend starting small and gradually expanding scale.