Bakery products, due to their mouthwatering taste and affordability, are an item of huge consumption. There has been a trend of fortifying bakery products to meet demands of health-conscious consumers. The bakery industry consists of four segments: retail, wholesale, in-store, and food services. The wholesale bakery industry sector consists of three segments: cake, bread, and related products, frozen bakery products, crackers, and cookies.
Basic trends in this industry pertain to Health, Pleasure, and Convenience. Bakery products are preferred by customers who chose to go for ‘healthy and light’ food. It always gives immense pleasure to eat delicious bakery products. With the latest trends of celebrating every moment & occasion, this industry has seen a huge hike in business. The bakery industry has moved from offline to online stores, offering varieties in their products to attract more customers.
Cupcakes, Doughnuts, croissants, pizza rolls, and many more products can be customized with cheese and vegetables for taking during lunch, dinner, and snack times. Bakery products are 24×7 eatery items, as they can be taken anytime and anywhere. You don’t need a proper place or a chair and table to eat it. You can eat it while you are walking or taking a quick break from work.
Bakery products have many advantages such as they are healthy because of the low-fat content, rich taste, management of weight, visual appeal, and increased appetite and the takeaway.
Market size of the Bakery Industry in India
India’s organized bakery sector produces about 1.3 million tons of bakery products (out of three million tons) Biscuits, Bread, Cakes, Pastries, Indian Rusks are some of the most common bakery products in India. Convenience stores, Supermarkets, Hypermarkets, and Online platforms are the medium to sell these products. Mostly preferred in breakfasts and evening snacks, the bakery industry has a wider scope in every region of India.
The Indian bakery market reached US$ 7.7 billion in 2020. The bakery market is projected to grow at a CAGR of 8.5% from 2021 to 2026 and is expected to touch US$ 12.39 billion by 2026. India is the world’s largest biscuit-consuming nation, which was worth around USD 4.65 billion in FY 2020. With the rapid advancements in technology and increase in population, the bakery industry has always shown a positive market graph. There are some modifications done on the products, to make sure that the products are nutritious for people who are health conscious.
Recent Trends and Innovations in the Bakery Industry
1. Gluten-Free Bakery Products
Gluten-free bakery products are creating a massive sensation in the bakery industry due to increase in health awareness among consumers. Wheat flour is undoubtedly the main ingredient of most of the bakery products such as bread, biscuits, and cakes, contains gluten network forming proteins which is responsible for wheat flour dough’s elasticity. Chemical structure of gluten is very complex, and it triggers allergies in people.
The gluten free bakery products market is expected to touch US$ 5,900 Mn by 2026 globally. Gluten free doughnuts, biscuits, brownies, and Gluten free pasta are gaining massive popularity recently and have found a place on the shelves of supermarkets already.
2. Packaged Cakes:
Due to the rise in supermarket and convenience stores, there is an exponential increase in sales of packaged cakes as these cakes can be found on the shelves of supermarkets easily. Packaged cakes are also called as industrial cakes. Other reasons for its increase in demand are: it provides quick snack time indulgence and their mouthwatering flavors and textures. There are a variety of packaged cakes available such as plain sponge cakes, muffins, Swiss rolls, etc.
3. Chemical Free Preservatives:
Consumers are showing reluctance to artificial additives and preservatives. Hence natural preservatives are gaining momentum. Some of the most popular natural preservatives are:
- Vitamin C
- Plant extracts such as thyme, rosemary, cinnamon and lemongrass
- Cultured starches
Essential oils are used extensively by the bakery industry due to their ability in delaying microbiological spoilage. Rosemary extracts prevent oils and fats from going rancid.
4. Whole Grain or Multigrain Bakery Products:
Realizing the adverse effect of refined products, consumers are now preferring whole grain bakery products. As whole grains contain all parts of the grain kernel — the bran, germ, and endosperm, they are highly nutritious and hence preferred by people. Consumption of whole grains reduce the risk of diabetes, heart disease and high blood pressure.
5. Indian Ethnic Flavors:
India is a land of rich food heritage. Indian flavors change according to demography. Infusion of western cuisine with traditional ethnic flavors will offer a multi-sensory and flavorful experience. Kesar(saffron), elaichi, turmeric and coconut go well with most of the bakery products. Addition of bhringraj to chocolates increases the functionality of the brain. Usage of lemon, hibiscus, curry leaf and honey in bakery products boosts immunity.
Opportunities in the Bakery Industry in India
Bakery Industry in India is profitable. When done right without compromising on quality or quantity, the revenues can be increased significantly without much stress. Consumption of Biscuits and Cookies have increased exponentially in both urban and rural areas owing to their affordable price and ready-to-eat nature.
The biscuits and cookies industry accounts for nearly 72% of the sales in the Indian bakery market. After the pandemic, there have been many start-ups of fast-food chains and this has intensified the demand for the bread used in sandwiches, burgers, etc. The bakery industry is experiencing a robust growth at around 9%. Bakeries are using social media and other online ways to advertise their products and increase their customer base.
The bakery industry in India has witnessed an annual growth rate of more than 15 percent during the past years. The rising trend of “natural nutrition”, “healthy living” and “organic products” has significantly raised the consumers’ demand for whole wheat, light, natural and additive-free products. The preferences of people are changing, and bakeries operate accordingly with new dimensions.
It is expected that the bakery industry in India will only grow and boom in the very near future due to the busy and fast-paced lifestyles of most of the people living in urban areas of India as well as the undying appetite for gluten-free alternatives. People are opting for variations in everything. As one of the largest segments in the food processing sector in India, the bakery industry offers huge opportunities for growth, innovation, and job generation.
At every level in the bakery industry in India, there are challenges and opportunities. While the rise of local home bakers is encouraging, there are issues of hygiene practices and standards, and organized bakeries are also incurring losses due to a lack of operational efficiency and skilled workers. Bakery products are common in every household, and hence it has a vast market.
Challenges in the Bakery Industry
Being so diversified and widely spread across India, many aspects sometimes act as a stumbling block to the progress of the Bakery Industry. With more people shifting towards a healthy life, the demand for nutritious food is growing. To satisfy the need, bakeries need to invest in making the facilities more hygienic.
It also opens up the vacancy for people who are familiar with and experienced the same. The workplace should be the clean and up-to mark. To cope with the taste of customers, modifications of the products need to be done, and only a skilled person is eligible to do that. The right kind of ingredient, process, and changes in equipment are mandatory for modifying the original product formula.
Government regulations have been changed with time. The input cost volatility is expected to continue, and this would exacerbate the situation. Another challenge is the price rise of flour, which leads to the price rise of bakery products. Other raw materials such as oil, fat, and eggs have also seen a high price rise in the past couple of years. Good Infrastructure along with high-quality products is the requirement of customers. The bakery industry is competitive, and this reduces the sale of the products if innovation is not put in place. Something unique is always appreciated by consumers.
Minimum Investment required to Start Bakery Industry
Various factors such as location, space, employees, equipment, etc. are very important to start a bakery business. A minimum starting investment of around 15 lakhs INR is necessary. While it may vary, depending on the factors previously mentioned.
Paperwork, license, interior designing, and most importantly the marketing of the bakery requires investment. However, everything is done right the bakery industry is profitable. From Cakes to donuts to various sweets, you can select one or multiple products for your business start-up. Based on your vision you should decide the investment. Every investment should be more focused on making the customer happy and making sure that every preference of consumers is well taken care of.
Get Assistance from SolutionBuggy
SolutionBuggy being a leader in food industry, has more than 1500 food consultants to assist you to start and scale up bakery industry. Food consultants of SolutionBuggy having more than 15 years of industry experience solve all your technical challenges and business challenges in running a bakery industry. SolutionBuggy assists you in choosing right strategies to accelerate your industrial growth. Food consultants of SolutionBuggy handhold you in each and every step from product conceptualization to complete industry set up.