Customized Report Service – Soft wheat in the European Union and United Kingdom

Market overview

The European Union is the world's second-largest wheat consumer after China and the largest wheat producer (Sébastien Abis, 2023). From 2018 to 2022, the combined wheat production in the EU and UK grew at a CAGR of 2.1%, increasing from 138.1 million tons to 149.9 million tons. The peak production occurred in 2019, exceeding 155 million tons, followed by a decline in 2020. Among key producers, France, the largest contributor, saw a slight decrease in production with a CAGR of −0.6%. Germany experienced moderate growth with a 2.8% CAGR. The UK's output was more volatile, with a sharp drop in 2020 followed by a recovery, resulting in a 3.5% CAGR. Poland demonstrated a strong growth with an 8.2% CAGR. Conversely, Romania and Spain faced challenges, with CAGRs of −3.8% and −6.0%, respectively.

From 2020 to 2024, soft wheat production in the EU-27 grew at a minimal rate with a CAGR of 0.6%, increasing from 119.0 million tons to 121.8 million tons. France remains the largest producer with only a slight CAGR increase of 0.4%. Germany experienced a steady decline with a negative CAGR of −2.2%. Romania experienced growth with 11.6% CAGR. Spain faced volatility with a negative CAGR of −1.7. In contrast, Poland and Bulgaria showed positive growth, particularly Bulgaria with an 8.7% CAGR.

The European Union's wheat production for the 2024/25 season is forecasted, in July 2024, to be at a four-year low, with an estimated output of 128.7 million metric tons. This is 3.3% lower than the previous season due to adverse weather conditions (European Commission, 2024). The forecast for 2024-2025 EU soft wheat production is also reduced by 5% due to lower production in France and Germany (Bloomberg, 2024). On 9 August, France's agriculture ministry sharply revised its 2024 soft wheat harvest estimate, projecting a 25% drop from last year, making it one of the worst harvests in the past 40 years for the EU's largest grain producer. Persistent rain since autumn delayed planting, hindered crop development, and increased disease, leading to ongoing downward revisions (EURACTIV, 2024). Consequently, EU wheat exports in 2024/25 are forecast to hit a three-year low (Global Ag Media, 2024). Lower regional stocks and prolonged weather issues in France have also diminished grain quality, reducing milling wheat availability. As a result, the EU will likely lose market share in key markets like Morocco, Algeria, Nigeria, and Egypt, while facing increased competition in China from Canada and the U.S. (USDA, 2024).

Lower soft wheat production in the EU and UK (Essentica & Financial Times, 2024) has significant implications for the bakery industry. In France, soft wheat, crucial for making iconic baguettes, faces rising costs due to decreased production and increased energy prices, following Russia's invasion of Ukraine (Politico, 2024). This has already led to higher baguette prices, an inflation benchmark. In the UK, reduced winter grain yields and lower wheat quality have heightened dependence on imports (AHDB, 2024). The smaller domestic supply of breadmaking wheat and strong milling demand have driven up premiums, with wheat imports reaching their third highest level since 2000/01. With limited domestic breadmaking wheat, UK millers turn to high-protein German wheat (UK Flour Millers, 2024). However, extreme wet weather has also affected Germany's wheat crop, making milling wheat premiums more reactive to global supplies from major producers like Canada (UK Flour Millers & AHDB, 2024).

Trade performance

Between 2019 and 2023, the total soft wheat imports of the EU and UK saw a significant increase, with a CAGR of 14.6%. Notable surges were observed in Spain and Germany, with import values rising by 28.2% and 22.1% respectively. Spain's imports more than doubled over this period, reaching US$2.5 billion in 2023. Conversely, France and Sweden experienced declines, with France's imports decreasing by 12.8% and Sweden's by 20.9%. The Netherlands had the slowest growth among major importers at just 1.7%, while emerging markets like Slovakia and the Czech showed dramatic growth, with CAGR rates of 77.2% and 35.7% respectively. Overall, the EU and UK market reflects a robust expansion in soft wheat imports, driven by key countries and diversified by varying growth rates across the region.

In 2023, the total soft wheat exports from the top 10 non-EU/UK suppliers to the EU and UK reached US$2.5 billion, representing a 41.0% CAGR from 2019. Ukraine emerged as the dominant supplier with US$1.4 billion, exhibiting an impressive 86.0% growth rate. Canada followed with US$433.2 million, growing at a CAGR of 34.9%. Moldova also saw significant growth, reaching US$169.6 million and a 40.5% CAGR. Serbia and Bosnia and Herzegovina experienced notable increases, with Serbia contributing US$105.8 million and Bosnia and Herzegovina showing an 82.9% growth rate. Conversely, the U.S. saw a decrease in exports to US$66.1 million, declining by a CAGR of 5.8%. Other countries such as Kazakhstan, Australia, and Uruguay contributed smaller amounts, with Kazakhstan growing by 16.2% and Australia by 44.7%. Overall, the data reflects a robust expansion in soft wheat exports from non-EU/UK sources, driven primarily by Ukraine and Canada, while other suppliers show varied growth patterns.

Canada's soft wheat exports to the EU and UK grew significantly between 2019 and 2023, achieving a 34.9% CAGR, with total exports reaching US$433.2 million in 2023. The UK remained the largest market, accounting for US$180.7 million, though its growth was more modest at 21.6%. Italy and Spain saw remarkable increases, with exports to Italy surging to US$136.7 million at a 38.6% CAGR and Spain reaching US$98.0 million, driven by an impressive 86.0% growth rate. Portugal also showed strong growth, with exports increasing to US$17.5 million at a 63.1% CAGR. France and Denmark received minimal exports, with growth rates of 39.2% and 54.9%, respectively. Meanwhile, the Netherlands, Belgium, and Germany saw little to no activity, with the Netherlands experiencing a slight decline. Overall, the data underscores Canada's expanding presence in key European markets, with significant growth in Italy and Spain leading the trend.

Between 2019 and 2023, Canada's soft wheat exports to the European Union and the United Kingdom. experienced significant growth. The largest contributor to this growth was red spring wheat, grade 1 (non-organic, excluding seed), which saw exports rise from US$61.2 million to US$207.6 million (CAGR of 35.7%). Red spring wheat, grade 2 (non-organic, excluding seed) also grew robustly, from US$61.1 million to US$199.8 million (CAGR of 34.5%). The wheat and meslin (non-organic, nowhere else specified, excluding seed) category exhibited the most dramatic increase, growing from just US$206.2 thousand to US$23.7 million, achieving a remarkable CAGR of 227.5%. Organic red spring wheat grew at a modest CAGR of 15.1%, while other categories, such as red spring wheat s (non-organic, excluding seed) and organic wheat and meslin, saw declines or slower growth.

Between 2019 and 2023, Canada's soft wheat exports to the European Union and the United Kingdom experienced substantial provincial growth. Saskatchewan led the exports, growing from US$55.8 million to US$171.8 million (CAGR of 32.5%), followed by Alberta, which increased from US$41.8 million to US$142.0 million (CAGR of 35.7%). Manitoba also experienced notable growth, with exports rising from US$26.9 million to US$78.6 million (CAGR of 30.8%). Ontario saw the most dramatic increase, with exports jumping from US$4.5 million to US$34.3 million, achieving a CAGR of 66.5%. Quebec and British Columbia had smaller contributions, growing to US$4.9 million and US$1.6 million, respectively, with CAGRs of 37.4% and 32.4%.

Wheat flour used in baked goods

Flour is a natural product derived from wheat. Canadian soft wheat is used to produce cakes, pastries, cereals, crackers, biscuits, and fillings (Canadian Grain Commission, 2019). In the EU, about 47 million tons of rye and soft wheat are milled annually. Of the resulting flour, 29% of flour production is allocated to industrial bakeries, 28% to artisan bakeries, 13% to cakes, biscuits, and rusks, 12% to supermarket bakeries, 12% for household use, and 6% for other purposes and export (Pure Flour from Europe, 2022).

From 2020 to 2024, Eastern Europe's wheat flour market grows at a modest CAGR of 0.3%, reaching 11,311.3 thousand tons, with a slightly accelerated growth rate of 1.2% forecasted from 2024 to 2029. In contrast, Western Europe exhibits a stronger growth trajectory, with a 2.1% CAGR expected up to 2024, advancing from 23,896.4 to 25,985.5 thousand tons, and a reduced CAGR of 1.3% anticipated for the 2024-2029 period. Among individual countries, Italy is forecasted to see the highest growth rates, with a 3.1% CAGR from 2020 to 2024, reaching 4,588.2 thousand tons, and a slower 0.8% CAGR projected thereafter. Germany's market is expected to grow minimally with a 0.2% CAGR up to 2024, rising to 4,279.9 thousand tons, and a modest 0.5% CAGR from 2024 to 2029. France shows a more dynamic growth pattern, with a 2.9% CAGR from 2020 to 2024, and a decrease to 0.7% for the subsequent period. The UK exhibits a declining trend in the short term with a −0.5% CAGR but is expected to rebound with a 1.3% CAGR from 2024 to 2029. Spain's market shows steady growth with a 0.9% CAGR from 2020 to 2024 and a 1.9% CAGR from 2024 to 2029. Belgium experiences slow growth, with a 0.7% CAGR through 2024 and a slight increase to 0.8% CAGR thereafter.

In Italy, the wheat flour market for baked goods is set to grow from 3,230.5 thousand tons in 2020 to 3,762.4 thousand tons by 2024, reflecting a CAGR of 3.9%. This growth is anticipated to slow to a 0.9% CAGR from 2024 to 2029, reaching 3,937.3 thousand tons. Within this category, bread is the largest segment, increasing from 2,940.9 thousand tons in 2020 to 3,425.8 thousand tons in 2024, with a 3.9% CAGR, and expected to grow at a 0.9% CAGR thereafter. Pastries and frozen baked goods exhibit more dynamic growth, with CAGRs of 5.4% and 7.8%, respectively, up to 2024, though growth rates are expected to moderate from 2024 to 2029.

In Germany, the wheat flour market for baked goods shows minimal growth from 3,368.1 thousand tons in 2020 to 3,388.5 thousand tons in 2024, with a CAGR of just 0.2%. The growth is projected to be marginally better from 2024 to 2029, with a CAGR of 0.3%, reaching 3,441.0 thousand tons. Wheat flour used in bread decreases slightly with a −0.6% CAGR up to 2024 and then stabilizes. Conversely, frozen baked goods and pastries experience stronger growth, with CAGRs of 4.5% and 2.7% through 2024, followed by slower growth rates in the subsequent period.

In France, the wheat flour market for baked goods is expected to grow from 2,392.3 thousand tons in 2020 to 2,736.8 thousand tons by 2024, reflecting a CAGR of 3.4%. Growth is forecasted to decelerate to a 0.7% CAGR from 2024 to 2029, resulting in a market size of 2,839.8 thousand tons. Bread remains the dominant segment, with steady growth at 3.3% CAGR up to 2024. Frozen baked goods see the highest growth with a CAGR of 15.5% through 2024, though this rate slows in the following years.

The UK shows a slight decline in the wheat flour used in baked goods from 1,330.3 thousand tons in 2020 to 1,320.8 thousand tons in 2024, with a −0.2% CAGR. Growth is expected to recover with a 1.3% CAGR from 2024 to 2029, reaching 1,408.8 thousand tons. Wheat flour used in bread also declines slightly but is projected to grow modestly in the latter period. Pastries and cakes exhibit stable growth rates, while frozen baked goods experience a decrease initially, followed by moderate growth.

In Spain, the market for wheat flour used in baked goods is set to grow from 1,046.8 thousand tons in 2020 to 1,082.5 thousand tons by 2024, reflecting a CAGR of 0.8%. This growth is projected to accelerate to a 2.0% CAGR from 2024 to 2029, reaching 1,197.6 thousand tons. Bread is the leading segment with consistent growth, while pastries and dessert pies see higher growth rates. Frozen baked goods, despite positive growth historically, show a minor decline over the forecast period.

Belgium's wheat flour market for baked goods grows from 422.6 thousand tons in 2020 to 435.4 thousand tons in 2024, with a CAGR of 0.7%. The growth continues at a similar rate of 0.7% from 2024 to 2029, reaching 451.7 thousand tons. Bread maintains a steady increase, while frozen baked goods show a notable growth rate of 8.1% through 2024, though growth slows in the subsequent period.

Baked goods market

From 2019 to 2023, per capita expenditure on bread and cereals in Eastern Europe increased from US$202.6 to US$275.9, with a strong CAGR of 8.0%; however, growth is expected to slow to 4.0% from 2023 to 2028, reaching US$335.1. Western Europe saw moderate growth, with expenditure rising from US$402.0 to US$485.7 (CAGR of 4.8%), and is projected to grow at 2.2% annually to US$542.5 by 2028. France's expenditure increased from US$502.4 to US$621.9 (CAGR of 5.5%) and is expected to slow to 2.6%, reaching US$707.3 by 2028. Germany's expenditure rose from US$506.1 to US$603.7 (CAGR of 4.5%) and is projected to grow at 2.4% annually to US$680.6 by 2028. Italy's expenditure increased from US$496.7 to US$574.2 (CAGR of 3.7%) and is expected to accelerate slightly to 3.2%, reaching US$671.0 by 2028. Belgium saw growth from US$476.9 to US$573.5 (CAGR of 4.7%) and is projected to grow at 3.5% annually to US$681.1 by 2028. The UK's expenditure rose from US$386.3 to US$444.2 (CAGR of 3.6%) and is expected to significantly accelerate to 4.7%, reaching US$558.5 by 2028. Spain experienced modest growth from US$302.7 to US$322.5 (CAGR of 1.6%) and is projected to accelerate to 2.4%, reaching US$362.7 by 2028.

From 2020 to 2023, retail sales of baked goods in France grew from US$16.1 billion to US$20.5 billion at a CAGR of 6.3%. Bread sales increased from US$8,964.2 million to US$11,804.3 million (CAGR of 7.1%), while pastries and cakes also showed strong growth at 5.4% and 5.0% respectively. Growth in the overall category is expected to slow from 2023 to 2027, with baked goods reaching US$22.3 billion (CAGR of 1.8%), driven by moderate increases in bread and cakes.

Baked goods in France have remained resilient over 2022/2023, with bread continuing to be a staple in the French diet, showing growth in both value and volume. Rising prices, driven by increased energy costs, raw material prices, and general inflation–exacerbated by Russia's invasion of Ukraine–have impacted the bakery market. Innovation in bread, particularly with higher-fiber varieties, is gaining popularity due to perceived health benefits. Consumers prefer artisanal bread for its quality and healthiness, driven by a desire to preserve traditional French bakery practices (Euromonitor International, 2023).

Retail sales of baked goods in Germany increased from US$17.8 billion in 2019 to US$21.9 billion in 2023, with a CAGR of 5.4%. Bread significantly rose from US$11.2 billion to US$14.0 billion (CAGR of 5.8%). However, from 2023 to 2028, the market is expected to decline slightly, with overall sales dropping to US$21.7 billion (CAGR of −0.2%), reflecting a broader stagnation in key categories such as bread and cakes.

High ingredient and energy costs have significantly impacted the production of baked goods in Germany, with rising prices for essential ingredients like flour, sugar, and butter squeezing profit margins. Despite these challenges, demand for healthier options is expected to grow, with consumers increasingly seeking alternatives like full-grain rye and chia seeds in bread. While indulgence will continue to drive demand for desserts and cakes, health trends will remain a niche concern in these categories. Additionally, the influence of diverse cultures, especially through migrant communities, is reshaping the baked goods landscape, with American-style cakes and global flavors like Japanese matcha and French patisseries gaining popularity (Euromonitor International, 2023).

From 2019 to 2023, Italy's baked goods market expanded from US$19.7 billion to US$25.8 billion (CAGR of 7.0%). Bread sales were robust, increasing from US$12.4 billion to US$16.4 billion (CAGR of 7.2%). Future growth is expected to moderate, with the total market reaching US$28.4 billion by 2028 (CAGR of 1.9%), led by continued but slower growth in bread and pastries.

In 2023, packaged cakes and pastries in Italy saw a decline in volume sales, driven by economic difficulties that led families to prioritize essential products. The shift towards unpackaged products, perceived as healthier, and a growing focus on reducing sugar and fat intake also dampened demand. Meanwhile, packaged leavened bread continues to gain popularity among Italian consumers, with pinsa emerging as a key product in the category. Pinsa, a Roman-inspired leavened bread similar to pizza but lighter and crunchier, is perceived as healthier due to its lower fat content and versatility for both savory and sweet dishes. This product is benefiting from its healthy image and increasing availability, as more brands enter the market. In foodservice, packaged pinsa is quickly finding a niche, complementing artisanal versions that require longer leavening times, making it a convenient option for restaurateurs (Euromonitor International, 2023).

Belgium's retail sales of baked goods grew modestly from US$3.3 billion in 2019 to US$3.7 billion in 2023, at a CAGR of 3.1%. Bread and pastries were the primary contributors to growth, with pastries showing a CAGR of 3.7%. From 2023 to 2028, the market is projected to grow slightly, reaching US$3.8 billion (CAGR of 0.5%), with minimal gains across categories.

In Belgium, bread has emerged as a standout performer in the baked goods market, driven by a shift towards staples and health-oriented products like high-protein bread. Despite minimal overall growth expected in baked goods, the rising number of health-conscious consumers will sustain demand for 'free-from' and organic options. Premium, health-centric products, including vegan and gluten-free offerings, are anticipated to gain traction, with flatbreads like wraps remaining popular. Pastries, valued for their convenience and affordability, are expected to see slight positive growth, with organic and locally sourced products gaining popularity (Euromonitor International, 2023).

The UK's baked goods market expanded from US$9.7 billion in 2019 to US$11.6 billion in 2023 (CAGR of 4.5%), driven by significant growth in pastries (CAGR of 7.3%) and cakes (CAGR of 4.4%). Looking ahead, the market is expected to accelerate, reaching US$15.6 billion by 2028 (CAGR of 6.1%), with strong growth across all categories, particularly cakes and pastries.

The performance of baked goods has been significantly impacted by the supply chain crisis and wheat shortages, driving up production costs. Despite this, high work-from-home rates in Britain have sustained demand for packaged pastries, especially for breakfast. However, the introduction of high in fat, salt or sugar (HFSS) restrictions in October 2022, limiting the visibility of high-fat, high-sugar, and high-salt baked goods, has negatively affected the category's performance and is expected to continue hampering growth. The government's decision to postpone the next set of restrictions until October 2025 provides manufacturers with a window to reformulate recipes and potentially avoid future regulatory challenges (Euromonitor International, 2023).

From 2019 to 2023, retail sales of baked goods in Spain grew from US$5.2 billion to US$5.9 billion (CAGR of 3.4%). Pastries and cakes were the leading growth segments, with CAGRs of 8.6% and 6.9% respectively. Future growth is expected to moderate, with the market reaching US$6.5 billion by 2028 (CAGR of 1.8%), driven by stable performance across most categories.

In Spain, increasing health consciousness and dietary concerns are driving a shift towards healthier baked goods, including whole-grain varieties and products with low sugar and salt. This trend is particularly strong among young adults and parents, who are replacing traditional bocadillos with healthier options like tortilla wraps. The high obesity rate among teenagers is prompting parents to limit cakes and pastries, while negative media coverage of gluten is leading some consumers to seek gluten-free alternatives, even if they are not gluten intolerant. Consumers are increasingly scrutinizing product labels and favoring 'clean' labels with fewer, simpler ingredients. This ongoing focus on health is influencing purchasing decisions, with demand rising for low-sugar, low-salt, and gluten-free products, though companies are also balancing these health trends with indulgence and convenience to meet diverse consumer preferences (Euromonitor International, 2023).

For more information

The Canadian Trade Commissioner Service:

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Find a Trade Commissioner

More agri-food market intelligence:

International agri-food market intelligence
Discover global agriculture and food opportunities, the complete library of Global Analysis reports, market trends and forecasts, and information on Canada's free trade agreements.

Agri-food market intelligence service
Canadian agri-food and seafood businesses can take advantage of a customized service of reports and analysis, and join our email subscription service to have the latest reports delivered directly to their inbox.

More on Canada's agriculture and agri-food sectors:

Canada's agriculture sectors
Information on the agriculture industry by sector. Data on international markets. Initiatives to support awareness of the industry in Canada. How the department engages with the industry.

Resources

• AHDB, August 2024: Yields contrast as UK harvest advances: Grain market daily
• AHDB, August 2024: Analyst Insight: Could a smaller domestic wheat crop impact bread prices?
• AHDB, June 2024: Milling wheat premiums easing? Grain market daily
• Bloomberg, August 2024: Wheat Set for Weekly Gain as Europe's Harvest Seen Smaller
• Canadian Grain Commission, August 2019: Canadian wheat classes
• EURACTIV, August  2024: France sees 25% drop in 2024 soft wheat crop after relentless rainfall
• European Commission, 2024: EU cereals production, area and yield
• European Commission 2024, Cereals market situation:  Meeting of the Expert Group for the Common Organisation of the Agricultural Markets – Arable Crops & Olive Oil – 25 July 2024
• Euro News, 2024: Which country is home to Europe's heaviest drinkers?
• Euromonitor International, 2024
• Euromonitor International, November 2023: Baked Goods in France
• Euromonitor International, November 2023: Baked Goods in Germany
• Euromonitor International, November 2023: Baked Goods in Italy
• Euromonitor International, November 2023: Baked Goods in Belgium
• Euromonitor International, November 2023: Baked Goods in the United Kingdom
• Euromonitor International, November 2023: Baked Goods in Spain
• Essentica, June 2024: COCERAL predicts 134.5 mln t of 2024 wheat crop in EU plus UK
• FAOSTAT 2024
• Financial Times, June 2024: Climate graphic of the week: Record rainfall in UK and France batters wheat crops
• Global Ag Media August 2024: EU wheat exports to tumble in 2024/25 - USDA FAS
• Global Trade Tracker, 2024
• Mintel Global New Products Database, 2024
• Pure Flour from Europe, 2022: Flour production
• Sébastien Abis, 2023: The Geopolitics of European Wheat
• UK Flour Millers, April 2024: 2024 wheat market briefing
• USDA, August 2024: Grain: World Markets and Trade

Customized Report Service – Soft wheat in the European Union and United Kingdom
Global Analysis Report

Prepared by: Zhi Duo Wang, Market Analyst

© His Majesty the King in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2024).

Photo credits
All photographs reproduced in this publication are used by permission of the rights holders.
All images, unless otherwise noted, are copyright His Majesty the King in Right of Canada.

To join our distribution list or to suggest additional report topics or markets, please contact:

Agriculture and Agri-Food Canada, Global Analysis
1341 Baseline Rd, Tower 5, 3rd floor
Ottawa ON  K1A 0C5
Canada
Email: aafc.mas-sam.aac@agr.gc.ca

The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri-Food Canada (AAFC) assumes no liability for any actions taken based on the information contained herein.

Reproduction or redistribution of this document, in whole or in part, must include acknowledgement of agriculture and agri-food Canada as the owner of the copyright in the document, through a reference citing AAFC, the title of the document and the year. Where the reproduction or redistribution includes data from this document, it must also include an acknowledgement of the specific data source(s), as noted in this document.

Agriculture and Agri-Food Canada provides this document and other report services to agriculture and food industry clients free of charge.