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Retail boom drives growth of bakery chains
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Saturday, 30 June, 2007, 08 : 00 AM [IST]
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Dhwani Pandya, Mumbai
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ng though some exciting transformation. The growing economy, increasing disposable income and retail boom have lured number of domestic and international bakery chains to expand their presence in the country. These bakery chains are primarily serving variety of breads, buns, cakes, pastries, cookies, croissants and other bakery delicacies.
In India we have umpteen number of stand-alone and small bakeries, which primarily cater to the local requirements. Virendra Ghole, marketing manager, Monginis Foods Pvt Ltd, says, "The smaller bakeries have the obvious advantage of supplying "just baked" products as against the chains wherein there is a centralised bakery with uniform quality as their forte." Because of this basic difference in operation, there has been clear-cut division in the product folio of both. Kohli adds, "The small time bakeries specialise in khari, toast and savouries whereas the chains specialise in value added products like cakes and pastries which require a certain level of craftsmanship."
Monginis currently has no plans to expand its outlets but is now targeting to have presence across all segments of society. So far Monginis was catering to the middle class segment with its low priced bakery varieties against the other premium bakery chains like Birdy's and Croissants. It is now aspiring to target people with higher disposable income with its new range of "Super Premium Cakes and Pastries."
Monginis represents the successful model of expansion through franchisee network. Kohli said, "The franchisees bring in their working capital along with their infrastructure like shop equipments furniture, fixtures etc. They also lend their entrepreneurship thus helping the business grow. We have a set of quality auditors who keep check on the quality of the products sold through our franchisees."
However Arun Pinto, assistant brand manager, Birdy's begs to differ, he says, "I particularly would not favour a franchise model because you may not be able to control the quality by 100%. Though we have franchisee shops, the operations and management is looked after by us." For Cookie Man India president, Pattabhi Rama Rao, "The best method to ensure rapid expansion is through a well-managed franchise model. It is also equally important to have a strong process framework in place to ensure standardisation and quality across the operation. At Cookie Man we train all store personnel as well as the franchisee in the entire store management process on a regular basis."
Promoted by Mars Restaurants Pvt Ltd, the flagship company of The Mars Group, Birdy's is Mumbai's popular chain of 'cake and savory' shops. Birdy's is currently operating 24 outlets in the city and plans to open two to three outlets in Mumbai by year-end, besides expanding its presence to Bangalore and Delhi.
Australian bakery chain Cookie Man entered India in January 2000 with its first store in Chennai. Cookie Man is present in nine cities and is looking to enter 16 cities across the country by the end of this fiscal.
The entire retail market in India has evolved in the past few years to create a robust environment where food retail has thrived. Rama Rao said, "One of the key deterrents of a faster food retail revolution is the lack of well-developed cold chain logistics solutions providers."
The high transportation cost is a concern for bakery chains. Pinto says, "The bakery items has to be transported to outlets in cold vans and vehicles, twice or thrice in day, which becomes a costly affair."
Retail has been the real growth driver for bakery chains. Rama Rao says, "The Indian food retail sector is growing at 30%. The baked product industry has been dominated by the unorganised sector but with the evolution of the retail landscape this segment too is undergoing change. We believe that the Indian baked foods segment will grow rapidly."
Pinto seconded, "The retail industry is booming and the industries linked to it are also booming.There has been lot of innovation in terms of machinery and equipments. Because of automisation there is a faster produce resulting in quick service and better products."
Kohli believes that shift from home cooked food to ready made food on account of hectic lifestyle and rising aspirations will also benefit the bakery industry.
Marketing, advertising and promotional festivals has been the prime activity of these bakery chains to lure consumers. While Monginis is planning to organise Corn festival, which will offer various bakery delicacies using corn, Birdy's is planning to enter print medium for advertisement. Birdy's will organise a 'Made for Muffins' festivals in the month of July, which will provide 25 to 30 different varieties of Muffins to its customers. Cookie Man has also recently launched Munchies, Muffins, Brownies and Slices in select markets.
Apart from Monginis and Birdy's, Croissants from Ambassador group, and Ovenpick from Jain bakers are doing well in Mumbai. Bangalore also has been the favourite location for bakery chains due to its young and high spending crowd. Retail and dairy major Nilgiris recently announced plans to promote two new bakery formats: Masala Bread, a mass-market bakery chain and Blue Oven offering premium range of breads and patisserie. While all the above chains are making their mark in domestic market, Chennai based Hot Bread is the only Indian bakery chain, which has already hoisted its flag in UAE, Bangladesh, Nepal Paris, South Africa and USA. Singapore based Bread Talk plans to open a total of 40 outlets across the country by 2010.
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