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Retail bakery industry in India- Current scenario
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Thursday, 12 August, 2021, 13 : 00 PM [IST]
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Norina Fernandes
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The bakery industry in India is the largest of the food processing segments with an estimated annual turnover of about billions in 2020. The growth and spread of the bakery market is largely driven by a thriving biscuits and cookies industry.
The biscuits and cookies industry accounts for nearly 70-75% of the sales in the Indian bakery market. The penetration of cookies and biscuits in both the urban and the rural market is increasing owing to their affordable price and ready to eat nature. India is the second largest producer of biscuits in the world.
However, it is the world's largest biscuit consuming nation with an estimated turnover of $4-5 billion in 2020. Bread and biscuits form the major baked foods accounting for over four-fifths of total bakery products produced in the country.
India enjoys a comparative advantage in manufacturing, with an abundant supply of primary ingredients and cheap workforce, which support the growth of the industry.
In addition to this, the growth of the fast food chains in recent years has further boosted the demand for breads as they are used for sandwiches, burgers, snacks. Introduction of value added bakery products too has expanded its market base. A large part of this market is accounted for by bread and biscuits which are items of mass consumption.
Major players in this sector, like Parle, Britannia and ITC Foods, have captured the markets to a great extent, with Britannia holding the leadership position. In terms of value, Britannia and Parle account for more than a third of the total volume of branded biscuits marketed in India.
Organised bakeries in India are utilising social media to provide targeted and cost-effective marketing. The small local bakery cafes are eschewing traditional marketing to rely on word-of-mouth recommendations and social media engagement. Tapping into the artisanal market, smaller bakeries can concentrate on quality over quantity, while larger Indian chains such as Barista and Mad Over Donuts rely on creating larger quantities but with strong branding and associated trust.
Properties and Applications
Baking refers to the process of cooking food by dry heat in an oven, hot ashes or on hot stones. Baked goods or bakery products include items such as, bread, cookies, biscuits, rolls, cakes, cupcakes, pies, tarts, sweet rolls, coffeecakes, doughnuts, and refrigerated bakery products. Baked goods, such as bread, provide many nutrients that are vital for health. Bread and biscuits are some of the popular products among other baked goods.
On the basis of products, the Indian bakery market is divided into:
- Cookies, Cream Biscuits, Marie Biscuits, Glucose Biscuits, Non-Salt Cracker Biscuits, Salt Cracker Biscuits, Milk Biscuits
- Bread - Sandwich Breads, Hamburgers, Croissants and other products
- Cakes and Pastries - Pastries, Muffins, Layer Cakes, Donuts, Swiss roll
Current Scenario
The pandemic led to a rise in demand for healthy and functional bakery items like those which consist of multigrain, nuts and other healthy ingredients. Consumers are purchasing a variety of bakery products that are high on the health quotient, as it has been seen that people suffering from lifestyle diseases such as diabetes, high blood pressure and obesity are more prone to the deadly infection.
At the other end, the pandemic has paved the way for a clean and hygienic environment inside the factories, too. Proper maintenance of the machines and hygiene control are important factors in the production of bakery products.
The report gives a detailed analysis of the following key players in the Indian bakery market, covering their competitive landscape, capacity, and latest developments like mergers, acquisitions, and investments, expansions of capacity, and plant turnarounds:
- Britannia Industries Ltd.
- Parle Products Pvt. Ltd.
- Surya Food & Agro Ltd.
- ITC Limited
Due to the rapid population rise, the rising foreign influence, the emergence of a female working population, and the fluctuating eating habits of people, bakery industry in India has gained immense popularity. Bakery products are also famous nowadays due to their high nutrient value and affordability, are an item of huge consumption.
Concerning bakery products, consumers are demanding newer options, and the industry has been experiencing fortification of bakery products to satiate the burgeoning appetite of the health-conscious Indian men, women, and children. The bakery industry in India holds an important place in the food processing industry and is a traditional activity. Several healthy wheat-based products have been launched in the bakery industry in India, and are gaining popularity at a high rate. The mounting presence of bakery chains has further triggered the growth in the sector.
India is the world’s second-largest producer of food next to China and has the potential of being the biggest with its food and agricultural sector. So the trends and challenges of the bakery industry in India are large as well. The bakery industry in India is one of the biggest sections of the country’s processed food industry.
Bakery products, which include bread and biscuits, form the major baked foods accounting for over 82 per cent of the total bakery products produced in the country. The bakery industry in India enjoys a competitive advantage in manufacturing, with an abundant supply of primary ingredients required by the industry, and is the third-largest biscuit manufacturing country after United States and China.
The trends and challenges can be classified as:
Challenges - Government regulations and Demand-supply chain;
Trends : E-retailing of bakery products; Expanding foothold;
Improved packaging, and Innovation in ingredients and replacing unhealthy ingredients with their healthy counterparts.
The trends that have been gaining ground in the Bakery Industry are e-retailing of the bakery products, aggressive expansion plans of the incumbents, and technological and ingredient advancements. Despite a slight slowdown in India’s economy, bakeries continued to perform strongly, driving sales of baked goods over 2013. Baked goods registered double-digit value growth of 10 percent in 2013.The growth of baked goods was driven mainly by the rapid expansion of modern retail outlets across the country.
Irrespective of certain difficulties, the forecast for the bakery industry is positive with a projected market value likely to exceed by 2024. Along with these predictions, India occupies a unique position in the market as flavour innovation continues to grow in importance on a global scale. Indian traditions and access to interesting and unusual flavour combinations will allow them to continue to excel and innovate in this market.
The bakery industry in India is an industry that is only expected to grow and boom shortly because of the hectic and fast-paced life of a majority of people living in urban India along with the undying hunger with healthy gluten-free alternatives again provides enough area for the bakery industry in India to explore.
(The author is senior quality assurance executive, food and beverage at Cafe Coffee Day Global, Mumbai. She can be contacted at norinafernz1004@gmail.com)
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