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"Bakery market worth Rs 16500 cr, growing at 7.5% pa"
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Monday, 07 November, 2016, 08 : 00 AM [IST]
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fiogf49gjkf0d  Calpro Food Essentials Pvt. Ltd is a New Delhi-based company engaged in manufacturing and marketing of premium and specialty bakery ingredients and ingredient-related baking technologies to the Indian industrial, retail and artisan bakeries. In an email interaction with f&b news, Amit Agrawal, director, Calpro Food Essentials Pvt. Ltd, spoke about bakery ingredients market in India. Excerpts:
How big is bakery market in India? At what rate is it growing?
The Indian bakery market is estimated to be worth Rs 16,500 cr, growing at a healthy 7.5% per annum. It is one of the largest food industries consisting various product categories like breads, biscuits, pastries, cakes, buns and rusks. These bakery products are fast catching up with the popularity trend as lifestyle of Indians are rapidly changing. The major categories are breads and biscuits, cornering about 82% of the Indian bakery market. Another product segment worth mentioning is cakes and pastries. This segment is estimated to be worth Rs 1,250 crore of which significant 65% is accounted for by the unorganised sector.
The good part is that both, branded as well as unbranded sectors are growing together. Interestingly, baking industry is probably the third largest contributor to the food processing industry in India. In terms of volumes, it is estimated by Food Processing Bazaar that about 1.3 million tonne baked foods are processed in the organised sector per year, while about 1.7 million tonne are processed by unorganised sector. With three million tonne, bakery is still considered a sunrise industry ! This itself should give you the idea of the industry.
Tell us about your share in the market in specialty breads.
Calpro possibly has the largest product range in India for the baking industry. Within the bakery mixes and ingredients sector, it is probably the largest player in specialty bread products and mixes, with a market share of above 50%. Besides importing specialty bread mixes from Germany, Calpro manufactures bread mixes at its plant in Delhi. It is also perhaps the largest producer of multigrains in the country. Calpro will also start exports of its bread mixes and products this year.
Brief us about products offered by Calpro for bakery industry, more specifically your bread range.
Calpro’s main business is to enable bakers in producing innovative and standard products with ease and consistency. This we do through providing ready solutions in form of mixes and ready to use products by bakers. Our product range can be accordingly divided into – bread products, cake products, fruit fillings & glazes, and the fine baking products.
In breads, Calpro does mixes ranging from German Pumpernickle Mix to Italian Foccacia Mix, and from Multigrain to Gluten Free Mix. In popular Indianised versions, we do a 100% Atta Bread Mix as well as a Chatpata Masala Bread mix, which contains garlic, tamrind, chilli and coriander.
In cake products, we do sponges, muffins, brownies, donuts and other similar mixes, both egg and egg free versions. We import fruit fillings from Aldia which not only have high percentage of whole fruits or chunks but maintains original taste of the fruits. Out of the 12 major flavours, our most important flavours are, blueberry, strawberry, cherry and raspberry.
In fine baking products, we have assortments of products. This includes praline, marzipan, macaroon mixes, Passion fruit glazes etc. imported from Europe.
What makes you different from other players?
What makes us different is our large range, ability to make products as per the customer's need and also our all India bakery distribution system.
When it comes to ‘new products’ instead of being ‘copy cats’ we follow the customer/ consumer preferences and accordingly introduce new products. This is the reason, you will find that most of our brands are well accepted with most customers as that perfectly fits to their palate needs for example Masala bread, Whole-wheat atta bread etc. First of all our bread mix selection is unique and no other suppliers in the country can supply with the variety and flavours that we can. In fruit fillings range, we have been supplying consistently the Indian market for the last 15 years. It is a little wonder that we are growing every year.
What problems are faced by bakery ingredients players?
The biggest problem being faced today are the frequently changing rules and regulations of FSSAI, wherein they keep on changing new rules almost on a daily basis on labelling or ingredients allowed. This makes it impossible to standardise the recipes and labelling. An example for this would be removal of potassium bromate from all the ingredients of bread based on a single article which said that potassium bromate could probably cause cancer as per the findings in laboratory on rats. FSSAI disallowed the usage of bromate from the allowed list of ingredients. It is uncertain that what could made FSSAI to make such a decision based on a study done on rats and why had it allowed the usage from 1950 onwards. Maggie is another example of this issue.
How are the players coping with the problems?
Large companies can easily employ consultants to help them. Smaller players are the ones that end up facing the brunt of FSSAI. Even companies like Nestle got stuck with it.
What impact will GST have on your business?
Introduction of GST will certainly help the industry since it will help in reducing not just taxes but help faster movements of goods from one place to another making the consumer the king. Since a common tax structure would be implemented for all states, it would also ensure strengthening in reach and penetration.
Any plans to launch new products?
We have plans to introduce 1-3 new products every quarter. We are a growing company, instead of depending heavily into ‘cash cows’ we invest more in ‘growth boosters’ which give us an edge over the competition and at the same time ensure vibrancy and dynamism in operations. We also focus on innovations and innovative ideas which are originated from consumer preferences. Some of the recent introductions from Calpro:
- Calpro has just introduced a range specially packed for Home Bakers. This range is available in 1 kg an 5 kg pack sizes.
- Some products focussed towards ‘Industrial market’.
- In the recent past we have launched eggless macrons and expanded our gluten-free products range.
Brief us about your expansion plans. How much you will be investing for the same?
To abreast ourselves with the current market growth, we have chalked out our growth strategies which will give us clear lead in specific segments (rather than focussing into an already cluttered market) including niche segments like for example:
- Healthy breads options
- Multigrain options
- Gluten-free products
- Sugar-free options
We have devised our expansion plans accordingly which includes:
- Increasing the production capacity,
- Expansion in our technical team including R&D staff, technical chefs,
- Expanding in marketing and sales team
- Projected expansion in channel partners in tune with our projected increase in penetration,
- R&D facility
- Sales promotion activities including advertising (print media),
- Participation in all major bakery exhibitions,
We have devised our strategies which will give us a growth which would be around double the market growth, this would ensure us among the top three players and increase our market share in specific market segments.
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