SPAIN
Jorge de Saja serves as the General Secretary and Director General of ASEMAC (Asociación Española de la Industria de Panadería, Bollería y Pastelería), the Spanish Association of the Bakery, Pastry, and Confectionery Industry. In an interview, he offers the insider’s view on an exciting, diverse and strong industry.
Catalina Mihu: As Spain just won the World Cup last night, congratulations are in order, to start with.
Jorge de Saja: Indeed, it’s the only news on the radio this morning. And the celebrations are still ongoing! Yesterday, everyone was a big football fan.
Mihu: As one of the biggest European bakery markets in Europe, Spain is a very interesting country to study, in addition to its passion for football. Let’s start with its strengths: what makes the industry so resilient that it even enjoys record-breaking growth, despite the current geopolitical environment?
Jorge de Saja: Thank you for your interest in the Spanish bakery industry! I manage trade associations from different food sectors, one of them being the bakery industry. I have seen a change across the board. Resilience describes the Spanish bakery well.
Exporting is a major factor contributing to its resilience, first of all. Exports have worked well beyond our expectations. In the past, our industry was focused mainly on traditional production at a national level, which is a big market to begin with. Spain’s population is around 50 million people – a relatively big market, by European standards. But, to change perspective, this year we are going to surpass 100 million visitors. That’s the full picture of the market. So, while Spain traditionally focused on serving the needs of our nationals, plus those coming from tourism, it’s only the last few years that our members, the country’s market leaders, have had to focus on exports. And it’s worth noting that exports still make up a small share of the market today. It’s clearly growing, and it has helped to support the volatile situation today.
But that’s not the only factor behind our resilience. The combination of traditional products and innovation has been working out well, too: Spain has plenty of local and regional cultures, which, among many other things, have their distinctive pastries, even more than different kinds of traditional bread. Pastries used to be produced in a more artisanal, localized way, and limited to regional distribution. Our members have been successful at reinventing these traditional pastries and expanding their presence to a national level, at least. Plenty of innovation was also poured into these specialties to facilitate expanding their reach to all national ‘audiences’. With innovation, they’ve been able to reinvent, so to speak, plenty of the ‘nursery’ specialties, and that has helped make more appealing offerings for export as well, out of regional favorites.
The third reason supporting the industry’s resilience would be a relative recovery of bread consumption, after about two decades of decline. Every year we had to face the fact that bread consumption was going lower and lower – fewer grams everywhere. Thanks to innovation and the greater catalogues of bread varieties, we are seeing that not only has the decline stopped, but consumption has even increased over the last two to three years, even if it has been a very slight rebound. For a sector that has seen a decrease for decades, seeing the decline stop and then a slight recovery is already very promising.
The underlying driver is innovation. Most of ASEMAC members are producing much greater catalogs now than they were even five years ago, with high-value products especially expanding. Pastry and bread saw a decline a few years ago, so there was little appetite for investing in new varieties or substantially increasing portfolios, but most of our members have done that in the last years – and it has been a successful story.
Altogether, we were affected by the volatility of raw material markets, which was a big blow, with Spain being a net importer of some commodities. In general, all the driving factors making the European industry resilient apply to Spain, too, but we did some things a bit better than the others.
Mihu: Speaking of exports, what does Spain export and where?
Jorge de Saja: Frozen dough is successful abroad. It may seem an unlikely success story because frozen dough means high energy costs, but it is working well. It started with a few companies that had a more international profile, which, at first, expanded their exports by buying a partner or production capacity elsewhere. The industry leaders made investments in Europe and beyond – as far as the US, Mexico and Brazil, for instance. But now, they are also exporting products made in Spain, starting with neighboring markets, to keep energy costs low. Dulce de leche, for example, one of the most popular pastries, is now exported to the Mediterranean region.
It has taken a while for our members, and there’s still plenty of margin for growth, which stems from the Spanish bakers’ increasing export capacity, while other European competitors might see a decrease in profitability at the same time – but it works, and it shows. We are efficient at keeping industry costs in control while reaching new markets and offering new types of products, and this has not really been the trend for most of our European colleagues. A substantial number of Spanish companies are successful with this strategy.
Efficiency drives sustainability
Mihu: And how are energy prices kept in check? This has been a very hot issue in Europe over the last few years.
Jorge de Saja: Certainly.. For the last 5 to 10 years, I have been looking at the investments carried out by different sectors of the food industry. Over EUR 5,000 million was invested in client-related measures, just by the bakery and pasta industry alone. Basically, our members accepted that energy prices are what they are, and they are starting to make adjustments: plenty of installations such as photovoltaic panels, cogeneration, and heat recovery technologies have been made over recent years.
Our members are trying to optimize in whatever means they have at their reach. They are focusing on making their plants more efficient. They are not fighting against prices. They are not trying to change their supply, their energy supply lines (even if they could). Instead, they are investing in more efficient technology and are trying to make their processes more energy-efficient to manage related costs. The increased use of renewable energy in Spain altogether helps. Basically, while working on optimizing their operational costs, they are also lowering their energy footprint. Keep in mind that many of our energy sources were imported, while now it’s more and more national. That makes our carbon footprint look a little bit better. Even though I believe that energy cost efficiency or energy cost optimization was the goal, in the process of doing that on the production chain, their environmental profile is looking better, too. Much better!
Source: Iberia Food Partner
Mihu: How do Spanish bakeries approach sustainability?
Jorge de Saja: Whenever I see business strategies, or whenever companies go public, I see now that sustainability is really embedded in the industry decisions taken by our members. They do believe in it. Some of my members have either expanded or built new production capacity. When I visit some of them, I see it. That’s why I enjoy talking with operations directors or production technical directors: while they are showing off their ‘babies’, you can see how they plan, you can see how sustainability is a part of the factory itself, of the production line, or a determining factor in how raw materials are sourced.
“We are efficient at keeping industry costs in control while reaching new markets and offering new types of products.”
Jorge de Saja, General Secretary and Director General, ASEMAC
It’s an integral part of how the frozen capacities are set up, or how the water cycles are optimized. These are all evident changes, while some years ago, the general understanding was to simply comply with regulations (and sometimes, reluctantly). As little as 10 years ago, the industry was conscious of food security over carbon footprint, which was more of a technical added benefit rather than an aspect embedded in a whole sustainability strategy. Today, the industry believes in sustainability strategies. When you talk with our members, their concern shows, because they do think that it’s the only way forward. This is the only way for bakeries to become competitive.
We carry out some internal reports on water footprint reductions, for instance. There even seems to be competition in this regard: app companies have a water footprint strategy. Besides, even if they did not believe in sustainability, food waste is very regulated in Spain, concerning the food industry, so it’s a must regardless.
Co-products are another great example. We didn’t even talk about them 20 years ago; we were talking about the very best by-products or maybe even residues that have to be eliminated from the process.
Mihu: What are some examples of co-products today?
Jorge de Saja: It can start with any product: frozen goods, biscuits or pastes, that fall behind some kind of production standards, or are faulty in any way. Instead of being just discarded, treated as residues, these products are now processed, or bakeries sell them to companies that process them, and turn them into products for the feed industry. Bakeries are trying to make production as efficient as possible, but whenever they have to dispose of some raw materials or some faulty products, the system is designed to directly reach the feed industry.
Mihu: How do they work on minimizing the waste in the production facility? There are several regulations to navigate in this area, national and at the EU level – for example, the PPWR regulation.
Jorge de Saja: Bakeries are still adapting to it. But, to be fair, whatever a European regulation says, Spanish lawmakers are going to go the extra mile, far beyond the minimum required by EU law, and our members are not too happy about it. For instance, we had a legislative proposal to include braille on packaging in Spain. It would make sense to a certain degree: you can implement it for large packages, but not in products that are individually wrapped in plastic. It eventually did not go through, because the European Commission advised against it.
Bakeries are adapting. Regarding the new packaging regulation, which is still in the process, there is still plenty of national execution to go on. The industry is not happy about it because they don’t see the added value. They see the added value in sustainability, in the circular economy; they’ve experienced the benefit of taking it seriously. It’s the same for water reduction, energy efficiency – all these make sense, and bakers are very happy to put in the effort. Regulation starts to become a production over cost in a volatile world in which you really have to work hard to keep your competitiveness.
Mihu: You made an interesting remark: ASEMAC members can already see the benefits of circularity, and the results of taking steps in the right direction. What examples could you share?
Jorge de Saja: Even if production costs may have only slightly decreased, for big volumes, it amounts to a lot. It’s the opposite of a vicious cycle: in a virtuous circle, companies are doing better, so they are investing in new plants or new production lines. All new technologies are built with efficiency and sustainability-minded concepts, which means that, in turn, whenever they are operational, they contribute to lowering production costs, which makes companies even more willing to increase investments. They have seen that it works. Since they are in an expansion process, they are investing more.
That’s when energy optimization always comes into the conversation, for instance. “I am so happy that I installed these new isolating panels. I changed the circularity concept of my own business,” they say. It always comes down to it. Adaptations can be small things, or more sizeable changes, but everyone adapts. These are stories that everyone loves to tell. They are proud to share how they lower energy consumption.
Opportunities ahead
Mihu: What opportunities are available for Spanish bakeries?
Jorge de Saja: The artisan segment is growing well. I see plenty of margin for growth there. The separation between artisan and industrial products is much smaller; that is clear. There are plenty of traditional products in a country where so much value is given to local production, authenticity, and the connection between traditional and healthy lifestyles. These values, usually associated with traditional artisan bakery, are now applied to industrial baking. Large-scale companies have learned to produce these kinds of products, incorporating all the characteristics demanded by consumers.
The artisan craftsmanship is still there, with traditional techniques. Artisan-like products, made at large scale with the same values and the same taste as in an artisan bakery – these are recently developed innovations that do not chip away at the traditional, artisan market, which has stable performance numbers. What large bakeries managed to do is transfer some of the artisan baking conditions into larger, more industrial markets. They’ve expanded some of the qualities of the artisan craftsmanship to the general consumption, and consumers are reacting well. People are able to recognize that this product was not baked by my friendly baker down the street, but that it does look like it, and tastes like it. The fact that plenty of pastries are sold frozen is also good, because it means no additives were used, no preservatives, and no other ingredients that would take the product too far away from craftsmanship quality. Our members already had distribution lines, marketing setup and logistical capacity in place to handle frozen goods, because that’s what they had been using for the more industrial operations. They only had to update part of their production lines, distribution and logistical capacity to be able to use these products.
Mihu: Will authenticity remain key?
Jorge de Saja: It will. And it works, particularly in European markets. There are still plenty of products that are local and artisan and very original, which deserve to be consumed elsewhere. And this is where the existing frozen capacity comes in, as an advantage.
“Regulation starts to become a production over cost in a volatile world in which you really have to work hard to keep your competitiveness.”
Jorge de Saja, General Secretary and Director General, ASEMAC
Mihu: How is the market shared in Spain between large industrial bakeries and small and medium bakeries?
Jorge de Saja: The market is very diverse. Last I checked, there were about 12,000 bakery establishments in operation. Overall, I would say there is a healthy coexistence between medium and small companies and large industrial groups. There are not that many large industrial groups, and the market is very diversified. Of course, there are some product segments dominated by our members – everything associated with frozen dough, croissants, pizza, or focaccias, for example. This is a very popular product category in a country with so many establishments for tourists. The majority of this market belongs to industry members. Medium and small companies do coexist in an overall healthy environment, focusing mostly on regional or traditional recipes. Other products, such as the traditional napolitana, which is, perhaps, the most popular pastry in Spain, are made by everyone – big and small companies, in their own style.
In my European colleagues’ eyes, too, the Spanish market looks more diverse than in other European countries. This might be the key to the Spanish companies’ success story in Europe. In any case, it is clear that different business models, which serve different consumer needs, coexist.
An exciting kaleidoscope
Mihu: Let’s explore the market diversity: what does the profile of the Spanish consumer look like? What kind of products do they like?
Jorge de Saja: Businesses are diversified in response to diverse consumers. The Spanish gastronomy culture is a very going-out culture, a very experience-driven culture. Spaniards eat something when they are at home, and something different when they are on vacation. They like to eat something different whenever they are eating, every day, depending on the occasion. Eating habits are very much individualized. Family plays a role in Spanish culture, and it definitely makes its mark on Spanish eating out and gastronomy habits. So I would say that Spanish consumers, like all European consumers, are not eating less bakery, but they are being more choosy and careful about what they buy.
The difference in the Spanish consumer compared to other European consumers is that they eat and buy differently in different living situations. There are plenty of regional festivities or moments of consumption in which only certain products are eaten. You only eat a particular specialty whenever you go to your hometown or have a family reunion. That’s why our members have such a large catalog. They themselves are conscious that whenever they are eating with their families, they eat different types of food than their everyday menu.
And then, there are also plenty of regional products that are only associated with certain celebrations and festivities, and consumers expect those products to be available at the right time. So, while there is a Europe-wide trend for consumers to be more appreciative of certain higher quality products or better-for-you specialties, at the same time, in Spain, they expect to have an enormous array of different products available to them, whenever they are doing different things. This is the key to understanding the Spanish consumer.
Starting from this diversity, our members are trying to make regional or limited-time specialties available more and more. Bakeries are trying to make such assortments popular elsewhere, and they have the capacity to do so. These days, you can even find in supermarkets, all year round, some products that are traditionally only sold at a specific given time. There are, of course, exceptions, keeping in mind that Spain is a Catholic country and that much of our culture has traditionally been linked to religious festivities. Some special types of pastry are only consumed on such occasions, for example.
Spanish woman selling traditional rosquillas at San Isidro festival in Madrid | picture © tangmo.pa – stock.adobe.com – generated with AI
Mihu: Looking at the Europe-wide trend for better-for-you products, what nutritional profiles do Spanish bakers aim for, and what product reformulations?
Jorge de Saja: I believe that the changes in consumer demands and tastes share similar dynamics all over Europe, with some national specificities. And all this nutrient consciousness and this appreciation of healthy lifestyles are happening in Spain, too. We also see a trend for products specifically designed for changes in habits, or smaller families and even single households. All bakeries adapt portions and sizes, and specifically deliver products for them. The reinvention of craftsmanship, authenticity and industrial baking might be more specific to the Spanish market, on the other hand.
Pastries lead the way
Mihu: Pastries make a particularly interesting segment of the Spanish market. What are some of the traditional specialties that are present at the national level, and how are they reinvented for young consumers?
Jorge de Saja: ASEMAC members have first exported pastries in the traditional way, and only some of them are expanding further. The markets where we are producing and exporting include, first of all, France, Portugal, Italy, Germany, and the UK. The products that we are selling there tend to be international types of products. There’s always some kind of national innovation based on certain national products, but they wouldn’t be very much different from the popular mainstream offerings, ranging from pastels to Napolitana pastries, and any classic variety, perhaps with a little bit of Spanish flavor.
“With innovation, they’ve been able to reinvent, so to speak, plenty of the ‘nursery’ specialties, and that has helped make more appealing offerings for export as well, out of regional favorites.”
Jorge de Saja, General Secretary and Director General, ASEMAC
The main priority is to gain ground on the market as much as possible. They are not trying to be ambassadors of Spanish gastronomy, but to be efficient and gain market share. I’m certain that millions of Europeans come to Spain regularly, so they are a bit more familiar with the Spanish production. In principle, they would be open to national products. This could be an avenue, and it may change in the future, but it isn’t the number one priority now. That would be to advance into new markets, when they are still at the beginning of a successful export strategy or internationalization strategy.
ASEMAC supports Spanish baking
Mihu: How does ASEMAC work with and for its members, and how do you represent them with the authorities?
Jorge de Saja: Thank you for your interest! We are, as a member, a standalone organization that represents the baking industry, particularly focusing on technical regulatory issues. A great part of our efforts are channeled into working with authorities. We always say that administration is not our necessary evil. We are just a stakeholder, but we are proud to say that we are partners. I really stand by that.
And then, of course, plenty of new legislation has come out in the last 20 years. The Association has played a role in making certain that the industry would adopt new rules, or that regulations would be as industry-mindful as possible. Regulatory lobby is our main priority.
We’ve also had a number of success stories in working together with health authorities and our members for product reformulation – lowering the use of sugar and salt, for instance. Usually, our work has been a part of voluntary schemes rather than seeing new regulation imposed. Industry voluntary agreements have been implemented progressively with the backing of our industry, and that’s where ASMAC has played a substantial role: in getting the industry and health authorities to work together on reformulation, or marketing strategies.
Of course, we do everything else that is expected from the trade regulation. We support our members and give them regulatory information, helping them to adapt to changes. But I think the distinctive role of ASEMAC has been the capacity, throughout the years, to make industry and administration partners in things that otherwise would have been simply imposed. In this way, authorities could be mindful of the process and the timing that bakeries needed to adapt to new decisions. Making certain that changes would take place at a more reasonable pace and a more industry-
minded pace has been a significant part of our role.
Mihu: What kind of partnerships do you work in? Who would qualify as a partner for specific projects?
Jorge de Saja: It would depend. We’ve carried out projects with retailers, which are not that many, so the competition is fierce. That means that in such projects, we will collaborate with them one by one.
We worked a lot with consumers’ organizations in the past, but they are not that active in this sector. There are other sectors they prioritize (such as meat). For R&D, we carried out some projects on mycotoxin reduction with different partners. But most of our members tackle innovation on their own.
I recall a success story from the last few years, when we were able to slightly modify the temperature at which some of our products have to be produced and stored, which was ultra-frozen, while all our European competitors were doing frozen (from -17°C we went up to -14°C). This temperature difference actually meant plenty of money at that time. The Association carried out comprehensive research, proving that the temperature increase did not have any health consequences. That issue was contemplated by other European regulators, which proved that Spanish national legislation was far more demanding and the change actually aligned Spain with the European level.
Mihu: What industry events are in the Spanish bakers’ agenda?
Jorge de Saja: I see a trend among many of our members, which confirms everything we said before: they are not only participating in general food fairs like Alimentaria in Barcelona or Sial in Paris, but they are more and more investing into specialized fairs, like gourmet fairs or exhibitions addressed specifically for retailers. Smaller fairs focusing on hospitality are also interesting. Gourmet in Madrid is a successful story every year, for example.
Mihu: Thank you very much for an insightful conversation!
Jorge de Saja: It’s been a delight.