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“Bakery industry to grow 16% CAGR over next 5 years”
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Monday, 11 May, 2015, 08 : 00 AM [IST]
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fiogf49gjkf0d  Calpro Foods Pvt. Ltd began making preservatives for the baking industry around mid-80s and is now one of the largest suppliers of specialty ingredients like preservatives, emulsifiers and enzymes to Indian industrial bakeries. Now, Calpro Foods, together with its sister company Calpro Food Essentials Pvt. Ltd, comprises Calpro Foods Group. Ayush Agrawal, director, Calpro Foods Pvt. Ltd, in an email interaction with F&B News, spoke about bakery industry in India. Excerpts:
How big is the bakery industry in India? At what rate is it growing?
Bakery industry including the bread, biscuit and cake segment is estimated at approx Rs 30,000 crore in 2014. A large portion of this is still under unorganised sector. The industry is poised to grow over 16 per cent on CAGR basis over next 5 years.
Tell us something about demand and supply of bakery products.
There is a huge underlying demand for bakery goods at affordable, indulgence and aspirational level. This is especially true for the time-pressed urban-dwelling consumers seeking convenience food. Though the market at the bottom end of pyramid for low value products is shrinking, it is growing rapidly much larger rate for newer varieties and product categories.
What are the emerging trends in the industry?
The emerging trends are the healthy options and products targeted towards a niche consumer base like gluten-free, high fibre, low fat options and others. Also frozen baked goods has started to do well. Overall the market is moving towards higher value products especially true in categories like cake and cookies. Today consumers are willing to spend more and experiment.
Brief us about products offered by Calpro foods.
Calpro Foods works very closely with both the industrial consumers and premix companies who then work with retail and artisan bakers. Our range of ingredients offer remarkable flexibility and quality to bakers in developing innovative bakery solutions like egg-free cakes & donuts, complete and convenient dessert range options amongst others.
What makes you different from other players?
We offer bakers complete solutions including a wide variety of ingredients backed by technical support. With a full inhouse bakery set-up and international coverage and support partners, we study the global bakery trends against needs and aspirations of Indian consumers. Based on our analysis we offer complete solutions to the industry and pre-mix companies. Customers can come to our lab and do trials based on their process and requirements.
How do you see the potential of bakery industry in India?
Currently the modern retail outlets such as hypermarkets and supermarkets continued to remain low compared to the overall retail scenario in India. This is bound to change mostly so for the premium goods offered by these retail markets. Furthermore, globalisation factor, the increasing number of women expected to join the work force and the concept of bakery as a convenience food will each drive sales of baked goods, growth of baked goods across various product categories.
Tell us something about fortification of bakery products.
A lot of companies are now in the process of offering products to target niche health-conscious market. Products like gluten-free, high fibre, multi-grain and high vitamin are visible across all product categories. As food laws become clearer, bakery products would be the best way to fortify and satiate the health-conscious needs of the vast population. The fortification will also be the leveraging and differentiating factor for the bakery companies.
What are the challenges and opportunities for the industry?
The major challenge in this industry is the shelf life and the complexities of the distribution market. Because of the hot and humid weather in most India, bakery products have low shelf life leading to spoilages and losses. Second is that majority of the products are still sold by mom & pop type stores which makes the cost of sales highly detrimental for innovating products. Lastly the fluctuation in the quality of wheat, the major raw material will always have an impact on the finished product quality.
How are government regulations for the industry?
Government regulations are in fact one of the major setback for the industry. Current FSSAI rules on ingredient usage are not at level to the global innovations in ingredients technology. This limits the ability for the sector to innovate and improve quality. Secondly the high tax structure also affects the cost to consumers making the most affordable and convenient food out of the reach of millions of Indians.
How do you see the sector in next five years?
Analysts say the market would be over Rs 50,000 crore by 2020 backed by evolving perception of bakery products in India, consumption boom in the nation and changing consumer preferences. Most of this growth will come from urban and semi-urban India in premium product categories.
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