The industry of bread production in Canada has only seen a discreet growth from 2013 to 2018. The situation arose from steady growth in exports and solid demand for higher-end types but only to be offset by the festering consumption of wheat products in the domestic market. Due to consumer preferences for healthier products as a current trend, the efforts in the reinvigoration of the bread market were futile during the mentioned five-year period. The same trend is forecasted for the next five years leading up to 2023. Operators in the industry are now focused on the market shift to healthier products with attention to ‘nutritious specialty and artisanal bread’ (IBISWorld, 2018).
With the information above, the researchers believe that to be successful in the introduction of a new bread product to the existing deteriorating Canadian market, the sale of bread must be focused on a demographic and area first, while keeping in mind the current trends to appeal to other consumers as well. A visible population and possible market in Ontario are the East Asians and South East Asians that make up 9.1% of the estimated 14 million of Ontario’s inhabitants in 2018, that mostly comprise of Chinese, Filipino, Korean, and Japanese (World Population Review, 2018). The researchers think that tapping into this niche market would be an easier way to introduce a new bread product rather than taking on the entire Canadian bread market.
The focus of the study will be on the most successful way of introducing a bread product from a Canadian bakery, specifically targeting the said markets. The researchers will be using anpan, a Japanese bread, as the main product for sale. The paper will also discuss the significance of the said bread, why it was chosen, and a brief history of bread in Japan. A market and SWOT analysis will be conducted, and will be used to address the anpan’s marketing mix in the most logical way and with the highest chance of success.
Bread in Japan and Anpan
In 1543, Portuguese Christian missionaries introduced bread to Japan while traveling through the country spreading their faith. But as Japan closed its borders in 1587, the popularity of bread disappeared. 1840, the Opium War broke out and bread was mass produced to serve as an easy ration of food for soldiers out on the field. The mass production served as a catalyst for bread to become popular in Japan again. After World War II, with Japan having a shortage of food, a large import of wheat came to Japan and made bread a staple in the diet of the Japanese people (LiveJapan, 2018).
As time passed, the Japanese started to make their own. Invented in 1896, anpan, a bread stuffed with red bean paste, became the archetypal variety of bread in Japan. Anpan’s name is derived from two words: ‘an’ means ‘sweet bean paste’ and ‘pan’ means ‘bread’. The inventor of anpan was a samurai named Yasubei Kimura and the idea of making the bread was due to the dissolution of samurai classes, the westernization of Japan, and for him to earn a living. Kimura wanted to start his own bakery and create a bread that was suitable for the Japanese palette. Most bread at that time was only salty and sour as it was the recipe they only knew. That is why Kimura started stuffing bread with sweetened red bean paste to sell as snacks, which became rather popular. As its popularity grew, Kimura was even asked to present anpan to the Emperor of Japan. It was said that the emperor loved the bread so much that he was served anpan every day. The story spread and made people want to taste anpan themselves, thus its popularity grew even more (Japan Info Inc., 2016).
The sweetened red bean paste is primarily used in Japan, Korea, China, and several countries in Southeast Asia (Japan Info Inc., 2015). That is why the researchers believe that anpan is the perfect bread to introduce to selected demographic, as it is a popular flavor in their heritage. As mentioned in the introduction, the domestic market for bread in Canada is shifting towards more health-conscious choices. With that in mind, the red beans used in anpan can cater to that shift as it is high in folate, manganese, potassium, protein, and iron. The researchers chose anpan for those very reasons, as they do not only match the demographic, but it may also appeal to other markets due to its nutritional value.
Market Analysis
Along with plenty of Asian international students, like with 7,593 Chinese students in the University of Waterloo in Ontario alone, the more than one million East and South East Asian population is the chosen control group of the study.
A CAD$5-billion opportunities in retail is projected for visible minorities in Canada for the next five years. While for the next 10 years, Perry Caicco of CIBC World Markets forecasts that about 70% of the entire growth of Canadian consumer spending will be by the Asian population. An emphasis on protein-rich food and vegetables has been observed in the population, as the ethnic consumers usually include protein in each meal. Research in Tone Tai, Asian store in Toronto, have revealed that bakery items were also a visible part of their shopping. A shift from the traditional rice porridge to fiber-rich carbohydrates was also shown in their buying habits (Kwon, 2013).
A shift is also seen in the increasing number of health-conscious Canadians, where they are moving towards goods that are alleged to be me more natural, rather than processed items that contain artificial flavors and ingredients. Though the consumers are avoiding sugary or salty products, many of them set aside this notion when buying baked goods from various food retailers as a form of indulgence. The Canadian bakery industry has responded to the trend by increasing the accessibility for healthier options that include high-fiber, gluten-free, and low-fat varieties. Fortified baked goods have also been sold along with packaging that highlight the health-related benefits or show claims of no preservative and reduced or no fat content. In terms of bread, health is the highest consideration, while sweets like pastries are considered to be a treat (Government of Canada, 2018).
With the information above, the researchers believe that with projected market opportunity in the Asian market and the shift in the Canadian market, anpan will have a higher chance of success due to the demographic and if it is advertised with its nutritional facts.
SWOT Analysis
Information is based on the researchers’ own analysis. The researchers think that the strength of anpan comes from its popularity as a flavor among the demographic, its nutritional value for the Canadian market shift, and its back story that can be used for advertising. Weaknesses arise from its weak popularity beyond the selected demographic, and its possible channel of distribution as it is focused on a niche market. Opportunities arise the from Ontario’s East and Southeast Asian population/market, where the flavor of the bread is popular (Japan Info Inc., 2015), and, as mentioned in the previous chapter, the said market is to be responsible for 70% of growth in consumer spending in Canada, as well as the market shift towards healthier alternatives (Government of Canada, 2018), where anpan can be advertised as ‘nutritious’, and finally the use of social media or internet marketing as way of advertising the product. Threats can come from other bread producers and the dwindling Canadian market for such goods (IBISWorld, 2018).
Marketing Mix
Product Strategy
According to the nutritional facts, a single anpan contains 204 calories, most of which comes from the flour. But the bun also contains potassium, fiber, protein, vitamin A, calcium, and Iron (Nutritionix, 2016). With the current state of the Canadian bread market, the researchers believe that the focus of the product strategy is to make anpan a health-conscious alternative. The researchers have concluded that the product can be sold as two different types: ‘traditional’ for the chosen demographic, and another type that is more for the health conscious. For example, substituting sugar for stevia, natural sweetener. Stevia has zero calories and carbohydrates; it is also sweeter than sugar, thus a smaller amount can be used compared to sugar.
Price Strategy
The average price of bread in January 2019 was CAD$2.84 (Statistics Canada, 2019). That is why the researchers think that setting anpan at a lower price than the average at the introductory phase would be most beneficial to test the market at profitability.
Place Strategy
The research is based around a Canadian bakery. As mentioned before, the Canadian market is also looking for more artisanal bread, for that reason the researchers concluded that having anpan in a bakery is more ideal in reaching the market beyond the demographic. While being able to sell anpan in Asian stores is best to penetrate the focused demographic.
Promotion Strategy
Bakeries can’t depend on the aromas of the product in the store to tempt the customers; they must develop promotional plans that are appealing to have regular customers. Today businesses use online platforms, such as email, Facebook, and/or Instagram to advertise a new product or flavors. Using online platforms as a way to market a product enables businesses to receive responses immediately, it is also cheap and uses less effort. Online marketing provides businesses the option of having the lowest risk with the least plausible expense, in an effort to maximize profitability. The researchers believe that an online promotional plan will help in reaching the markets in the least exhaustible way.
Conclusion
The Canadian domestic bread market has seen a decline with the demand and desire for healthier food options. Focusing on a particular market rather than the entire market provides an opportunity to introduce a new bread product with lower risk and loss. The Asian market is forecasted to be accountable for more than half of the entire growth of consumer spending in Canada. With that prediction, penetrating the said market may offer the best opportunity. While offering bread that is health-conscious, it allows for wider reach in the domestic market. Anpan can possibly provide both. Anpan can penetrate the Asian market as the red bean paste stuffing is a popular flavor in that demographic. Whereas the nutritional value of the beans can be advertised for the purpose of attracting other possible consumers. Though further research of creating a more health-conscious version of anpan is needed.