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With proliferation of brands, bakery retail industry booming in India
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Tuesday, 18 April, 2017, 08 : 00 AM [IST]
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Abhishek Saareen
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The stature of bakery as an industry is huge within the food processing sector. The bakery retail industry is seeing the biggest boom right now. With more and more retail brands coming up, this trend is going to go upwards.
Bakery products were once considered a poor man’s food. A very positive change in the entire bakery sector in our country has been noticed, which is majorly due to the evolving consumer tastes and changing perception of the bakery products.
In the early days, the Indian bakery industry would comprise breads, cakes, biscuits and pastries.
But due to globalisation and the rise in disposable incomes, the consumer has become more aware about different bakery items prevailing in different corners of the world, and has also become more open-minded enough to experiment with his/her tastebuds.
Urbanisation too acted as a catalyst in the phenomenal growth of bakeries. Due to that, the Indian consumer has also become more quality-conscious. Furthermore, this has become challenging for the bakery retail players in India.
But this has also opened up more doors for them to come up with innovative bakery products and improve their variety and quality due to better acceptability of the Indian consumer.
This has attracted many foreign multinational companies in the Indian bakery sector, which have opened their outlets in India. There is also a growing number of local brands that are into the bakery business.
The entire approach to retail bakery has changed. Now Indian players are not only looking for ideas to improve their product quality, but they are also laying equal emphasis on other important aspects like packaging, innovation, interiors of the showroom/retail space, etc.
It is quite interesting to note that the bakery industry has become one of the top five revenue generating industries within the food processing sectors globally. This is, indeed, very encouraging for the Indian bakery retail industry.
There are innumerable cafes, lounges and casual diners which have bakery items like puddings, pastries, sandwiches, cakes, mousses, etc. on their menus due to the rising demand of the customers.
In urban areas, as more and more people are getting health-conscious, we have seen a rise in the consumption of multi-grain bread, brown bread, whole-wheat bread, etc.
Moreover, people are getting more inclined towards the trend of baked, not fried snacks, which is again a boon for the entire bakery industry.
Recent studies have shown that the retail bakery industry in India is expected to grow at 18 to 20 per cent in the next five years.
Now, bakery products in India have found their takers among all age groups. It is interesting to note that India is the second largest manufacturer of biscuits in the world, after the United States.
Our previous generation used to prepare bakery items at home, but now people, due to their busy lifestyles and/or simply unwillingness to cook/bake, have found their solutions in packaged food, which has again proved to be a boon for the bakery industry.
Factors like the increasing number of bakery and confectionery outlets and overall growth in the bakery sector have given enough encouragement to promoters to enter into e-tail.
This is a surely an emerging trend in the Indian bakery sector. The policy makers sitting in government should look into the matters and offer tax rebates to the retail segment, which, if happens, can be considered as a big relief to the retailers.
? Spurt in organised retail gives big opportunities to bakery products
There are more than two million unorganised bakeries operational in India. Recent statistics show a healthy increase in the retail sector, thanks to the sudden spurt in the organised sector in recent past.
Studies conducted by our company, Trident F&B Consultants Pvt Ltd, have shown that less than half of the entire bakery production in India is by the organised sector and the rest is done by the unorganised sector.
Therefore, there is a lot of potential for the organised sector to increase their production and improve their supply chain system. As more and more consumers are becoming brand-conscious, and a large number of people from the unorganised sector are planning to become organised players, the gap in the bakery production between the organised and unorganised sectors is either going to become narrower or not expected to widen.
Not just in the bakery production scenario, there is also a boom in the organised retail sector, which is becoming a great opportunity for the entire bakery fraternity. There are upward trends in demand, and promoters must grab the opportunity.
Chefs are also coming up with nouvelle ideas and concepts. It is not only swanky malls, but high-street, stand-alone outlets are making good margins too.
Be it breads, cakes, pastries and biscuits, there is a huge demand for bakery products everywhere. The overall growth in the organised retail sector is expected to increase due to the entry of international chains in the bakery sector in our country.
? Cake is most promising sector in retail baking (wedding cake)
The ratio and the graph show a handsome take-off in the sales of cakes and gateaux. The study conducted by Trident F&B Consultants Pvt Ltd shows a drastic increase in wedding cakes. These days, wedding cakes are selling like hot cakes.
On an average, wedding cakes vary between eight pounds and 20 pounds. Wedding cakes are jointly cut by the couple and distributed among the invitees, giving a feeling of togetherness and attachment.
The rising trend of wedding cakes in place of the traditional Indian sweets is bound to receive another thought by the leading mithai makers. Many of them have already planned or are planning to introduce eggless bakery products in their retail showrooms.
These days, the best ingredients for icing, flavours and fillings are available in the market for making cakes. Thus, the end result is also good.
There is a huge demand for themed and three-dimensional cakes, apart from the regular ones. A few bakeries have even bought photo printing machines to print images directly onto the cakes for decoration.
? Proliferation of modern supermarket chains helps in leveraging innovation in the bakery products
The rapid growth or proliferation of the supermarket chains are helping in the innovation in the bakery products.
People of all categories and capacities throng the supermarkets. Hence, the demand increases. Due to the globalisation and rise in disposable incomes, now people are more open to experiencing different food items than they were earlier.
On top of that, they also want more variety, and there is no better place for a consumer to look for variety than in a hypermarket or supermarket.
Also it becomes very convenient for them to buy everything related to, but not limited to, bakery items under one roof.
Young chefs are coming up with fresh ideas as far as the yeast-based products and confectionery items are concerned.
A few products, namely croissants, cupcakes, puddings and tiramisu, have already created a stir in the market. This trend is going to go upwards in the days to come.
Supermarkets and hypermarkets in religious towns are offering eggless and gelatin-free products due to the religious beliefs of people.
These days, many supermarkets/hypermarkets have set up a dedicated space for a bakery within their premises.
Many have tied up with local bakery brands or suppliers, and others have in-house production. Some have set up a base kitchen, where the bakery items are produced and transported to their retail spaces.
There are some supermarkets, which have realised the huge potential of the upward graph of bakery and confectionery products that are cherished by the general masses here in India.
Not only do the promoters/investors see this as a high demand or need to upgrade their bakery products in terms of their texture, taste, consistency, finish, etc., but are also looking for innovative ideas/ways to lure customers.
Keeping that in mind, there are many things which one can notice in these supermarkets or hypermarkets.
Many have set up a live icing room, which is visible by the visitors/customers by a see-through glass. This is where the pastry chef decorates the cakes, makes puddings, etc.
Then there are many such retail places that offer bakery classes, lessons, live demonstrations on how to make cakes, pastries, puddings, pies, pralines, etc.
Some have been inspired by the concept of fusion cuisine, blending popular Indian desserts with continental bakery items. They are succeeding in making innovative items like Gulab Jamun cheesecake and Rasmalai Tiramisu.
? Modern stores selling private label bakery products
Modern stores find it easy to get a reputed private label bakery product manufacturer on board and work with him to do the product selection as per their requirements and then get the products packed according to their specifications.
Moreover, the private label bakery product manufacturers are flexible to generate an innovative range of bakery and confectionery products, according to the demands of the senior management of modern stores and retailers, that too with the desired shelf life and pricing.
This is a win-win situation for both the parties involved as the manufacturer gets regular business and the modern stores save the cost of the infrastructure in setting up the entire bakery production and the packaging unit.
As international chains have come up in the Indian bakery market, the share of private labels is expected to increase.
Other than the pre-established brands, newly-launched labels are also in huge demand. Non-branded labels are offering good margins to the retailers/modern stores directly, since they do not have the supply chain system. They approach the stores directly and do not appoint C&F and distributors. Their overheads are minimal, so they grow rapidly.
(The author is executive director, Trident F&B Consultants Pvt Ltd. He can be contacted at Abhishek@tridentfb.com.)
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