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Bakery fragmented with strong presence of local, traditional and artisanal
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Saturday, 07 February, 2026, 12 : 00 PM [IST]
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Nandita Vijayasimha, Bengaluru
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Low sugar, high taste, fresh, high quality, zero-waste recipes and biodegradable materials, Indian bakery and confectionery segment is indeed undergoing a major transformation, evolving from a traditional, staple-oriented industry into a premium, experience-driven sector.
Valued at around US$13.8 billion in 2024, it is projected to reach US$31.5 billion by 2033, growing at a CAGR of 9.12%. This expansion is being driven by increasing disposable incomes, rapid urbanisation, and a growing consumer preference for healthier, artisanal, and gourmet offerings.
Some visible trends are plant-based and vegan baking, high-protein and functional bakery products, low-sugar innovations, clean-label formulations, and the growing adoption of biodegradable and eco-friendly packaging solutions.
Also sustainability-focused innovation is reshaping how bakeries operate, from ingredient sourcing to production techniques. Practices such as upcycling surplus ingredients and redesigning operations to conserve energy are becoming more common, allowing bakeries to reduce environmental impact while maintaining quality. Looking ahead to 2025, the industry is likely to see broader adoption of climate-conscious offerings, including plant-forward baked goods and low-energy production processes.
Environmental responsibility is becoming a central focus within the bakery industry as businesses rethink how they source ingredients, manage production, and package their products. Rising consumer expectations, alongside stricter regulations and greater awareness of ecological issues, are pushing bakeries to operate more sustainably and reduce their overall environmental impact.
According to reports in the public domain, there are over 135,650 recorded bakeries as of October 15, 2025. The sector is dominated by roughly 126,000 single-owner, unorganised or small-scale operations over 90%, alongside a growing number of organised, branded and wholesale establishments.
Leading locations are Uttar Pradesh, Maharashtra, Tamil Nadu, Karnataka and Kerala, which have the highest number of bakeries. In fact, the country’s first bakery is widely considered to be the Mambally's Royal Biscuit Factory, established in Thalassery, Kerala. Other early bakeries like Arya Bakery and Shaikh Brothers in Kolkata also hold historical significance.
Bangalore too has a diverse bakery scene ranging from historic, iconic spots to modern, specialised cafes. Top famous bakeries include V.B. Bakery, O.G. Variar & Sons, Thoms Bakery, Glen's Bakehouse for desserts and Magnolia Bakery for American-style treats.
Some of the well-known and long-standing bakeries are Flurys in Kolkata, Wenger’s established in 1924 as a catering outfit for the British troops stationed in Delhi and Yazdani Bakery, an Irani cafe and Persian style bakery in Mumbai. Modern chains like Theobroma and Karachi Bakery too are frequented, according to reports.
Bread and biscuits constitute about 80% of the total market. But the bakery industry is fragmented with a strong presence of local, traditional, and artisanal, as well as rapidly expanding, branded chains.
Bakery cafes where flavour meets community to savour and connect:
Bakery cafés serve as vibrant community hubs, combining convenience with artisanal quality. They provide welcoming spaces for socialising, working, and connecting, while supporting local economies by sourcing ingredients locally, creating jobs and offering fresh, high-quality and specialty foods. Many also help preserve culinary traditions, blending heritage with contemporary tastes.
Puja Somanna, co-founder, Humble Bean, a popular café bakery, said, “Our expansion has been both exciting and humbling. One of the biggest learnings is that scale amplifies everything - systems, culture and decision-making. What works beautifully in one location does not automatically translate elsewhere. We’ve learned to slow down, listen to local consumers, and build teams that truly understand the brand ethos rather than just replicating formats. Sustainable growth, for us, has meant choosing depth over speed.”
“The core consumer base spans 22–45 years, largely urban and aspirational, with rising disposable incomes. That said, bakery consumption is no longer confined to metros — Tier 2 cities are showing remarkable maturity in taste and experimentation. What’s interesting is that age matters less than mindset today; consumers are driven more by lifestyle alignment than demographics alone,” she added.
“Our fastest-moving products have consistently been driven by quality and taste rather than trend alone. Our sourdough-based avocado sandwiches, smoothies, and protein bowls have seen strong traction, particularly among consumers looking for balanced, everyday meals. On the patisserie side, low-sugar offerings such as our cheesecakes, flourless chocolate cakes, and brownies perform exceptionally well. Because we do not use added gluten, improvers, or artificial enhancers, these products feel lighter while still being indulgent, which has helped build strong repeat demand. Our retail and grab-and-go offerings have also emerged as steady performers, especially with consumers seeking convenience without compromising on quality,” Somanna told F&B News, in an email.
Somanna noted, “Our core strength lies in restraint and clarity. From the very beginning, we have approached our bakery and patisserie as an extension of our coffee philosophy as nothing exists in isolation. Each product is thoughtfully created to balance and complement the coffees, never to overpower them.”
“We are deeply ingredient-focused, choosing only premium ingredients and avoiding additives or artificial flavours. This commitment allows us to stay true to our values while maintaining consistency, quality, and a sense of honesty in everything we serve, she said.”
The core consumer base spans 22–45 years, largely urban and aspirational, with rising disposable incomes. That said, bakery consumption is no longer confined to metros — Tier 2 cities are showing remarkable maturity in taste and experimentation. What’s interesting is that age matters less than mindset today; consumers are driven more by lifestyle alignment than demographics alone, according to her.
“Our fastest-moving products have consistently been driven by quality and taste rather than trend alone. Our sourdough-based avocado sandwiches, smoothies, and protein bowls have seen strong traction, particularly among consumers looking for balanced, everyday meals. On the patisserie side, low-sugar offerings such as our cheesecakes, flourless chocolate cakes, and brownies perform exceptionally well. Because we don’t use added gluten, improvers, or artificial enhancers, these products feel lighter while still being indulgent, which has helped build strong repeat demand. Our retail and grab-and-go offerings have also emerged as steady performers, especially with consumers seeking convenience without compromising on quality,” said the Humble Bean co-founder.
There are significant regional differences in product preferences across markets. “In fact, preferences vary not just by region, but by climate, consumption occasion, and cultural habits. Some markets gravitate toward richer, indulgent formats, while others prefer lighter, less sweet offerings. Understanding these nuances has been crucial in avoiding a one-size-fits-all approach,” said Somanna.
Cities with a strong café culture tend to favour experimental flavours and seasonal specials, while others value reliability and comfort. This directly influences how we structure menus — keeping a strong core while allowing flexibility for city-specific favourites. Data helps, but on-ground observation and customer conversations matter just as much, according to her.
“Health-consciousness has definitely reshaped conversations, but we see it more as a push toward balance than restriction. There is growing demand for low-sugar and plant-forward options, but taste remains non-negotiable. Our approach has been to offer mindful alternatives without positioning them as compromises , the product still has to feel indulgent and satisfying,” opined Somanna.
Humble Bean has always been about creating thoughtful coffee-led experiences. “As we evolve, you’ll see us expand deeper into product innovation, retail formats, and education — building an ecosystem rather than just outlets. Bakery will remain a pillar, but the larger vision is to become a lifestyle brand that celebrates craftsmanship, comfort, and everyday rituals around coffee,” said Somanna.
Bakery and confectionery ride on premiumisation and experience-driven consumption:
Major developments in the evolving Indian bakery and confectionery space are premiumisation and experience-driven consumption. There is an artisanal & gourmet focus. Consumers are moving away from traditional, mass-produced items, showing a higher willingness to pay for premium, handcrafted products like sourdough, premium chocolates, and specialty cakes.
“We are seeing bakery cafés as meeting hubs offering an ambiance, blending in-house bakeries with beverages, thus transforming the, "transactional" nature of buying baked goods into an experience. Another is a revolution in the gifting options. Pastries, gourmet cookies, cakes are opted over traditional sweets for parties celebrations, she said.”
Health-Conscious and Functional Indulgence have taken the centre-stage. The motto of Better-for-You Options is preferred with rising lifestyle-related health concerns. There is a surge in demand for gluten-free, sugar-free, and high-protein plant or dairy bakery items.
Greater attention is given to nutrient-rich ingredients like millet, oats, chia seeds, and quinoa that are increasingly incorporated into snacks and bread. Moreover, customers are looking for functional benefits in their treats, such as anti-nausea snacks like savoury shortbread or comforting options.
There is a growing focus for innovation and fusion flavours. Adventurous flavours are a major hit, including cardamom-infused pastries, masala bread, and saffron-infused croissants. The industry is focusing on multi-sensory experiences—combining crispy with soft or creamy fillings—to elevate the sensory appeal of products. Driven by a need for ‘less, but better,’ there is a shift toward, ‘shrink and sharpen’ products, such as filled donut holes and cake truffles, which provide maximum flavour in minimum volume, according to reports.
In an age of digitisation, e-commerce and social media platforms like Instagram and WhatsApp are gaining ground for boutique and home bakers, allowing them to build brands and reach customers directly, often serving customised, theme-based cakes. There is a growing emphasis on eco-friendly packaging, locally sourced ingredients, and reducing food waste.
Clean Label: Consumers are checking labels for shorter, more recognisable ingredient lists, with a preference for, "real" ingredients over preservatives.
Younger, affluent consumers like the gen-z and millennials who are looking for new, exotic flavours dominate the market dynamics and experiences. The specialised patisserie and chocolate segment is growing at a faster rate of 15-18%, compared to the bread segment's 4-5%.
Even as the Indian bakery market is booming, yet challenges like quality consistency, fluctuating ingredient costs, and talent shortages remain. Still, the industry is trending toward a new era of intentional indulgence, where health, premium quality, and immersive experiences redefine consumer expectations—setting the stage for standout brands to lead the way, stated bakery players like Cookie Land, Butter Sponge and Orange Bake House in Bengaluru.
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