If you’re into baking and want to know the prospect, growth, reach, etc. of the bakery industry in India shortly then you’re at the right place as today we’ll answer all the questions you might have in your mind. Some commonly asked questions are:

What are the trends and challenges of the bakery industry in India?

Is bakery business profitable in India?

What type of industry is the bakery?

Is the bakery industry growing?

What’s the future of the bakery industry?

We’ll answer all these questions for you one by one so let’s get started!

As per the website of Expert Market Research, Bakery Industry in India stood at a value of nearly USD 7.60 billion in 2020. The market is further estimated to grow at a CAGR of 8.5% between 2021 and 2026 to reach a value of USD 12.39 billion by 2026. The Bakery Industry in India is being supported by the thriving biscuits and cookies industry in the region. Now you may ask

what are the trends and challenges of the bakery industry in India?

Due to the rapid population rise, the rising foreign influence, the emergence of a female working population, and the fluctuating eating habits of people, Bakery Industry in India hasgained immense popularity. Bakery products are also famous nowadays due to their high nutrient value and affordability, are an item of huge consumption. Concerning bakery products, consumers are demanding newer options, and the industry has been experiencing fortification of bakery products to satiate the burgeoning appetite of the health-conscious Indian men, women, and children.Bakery Industry in India holds an important place in the food processing industry and is a traditional activity. Several healthy wheat-based products have been launched in the Bakery Industry in India, and are gaining popularity at a high rate. The mounting presence of bakery chains has further triggered the growth in the sector.

India is the world’s second-largest producer of food next to China and has the potential of being the biggest with its food and agricultural sector. So the trends and challenges of the bakery industry in India are large as well. The Bakery Industry in India is one of the biggest sections of the country’s processed food industry. Bakery products, which include bread and biscuits, form the major baked foods accounting for over 82 percent of the total bakery products produced in the country.  The Bakery Industry in India enjoys a competitive advantage in manufacturing, with an abundant supply of primary ingredients required by the industry, and is the third-largest biscuit manufacturing country (after the United States and China). The trends and challenges can be classified as:

Trends

E-retailing of bakery products;

Expanding foothold;

Improved packaging, and

Innovation in ingredients and replacing unhealthy ingredients with their healthy counterparts.

The trends that have been gaining ground in the Bakery Industry in India are e-retailing of the bakery products, aggressive expansion plans of the incumbents, and technological and ingredient advancements.Despite a slight slowdown in India’s economy, bakeries continued to perform strongly driving sales of baked goods over 2013.Baked goods registered double-digit value growth of 10 percent in 2013.The growth of baked goods was driven mainly by the rapid expansion of modern retail outlets across the country.

Challenges are:

Bakers also face a few challenges, such as:

  • Government regulations;
  • Demand-supply chain;

Rising prices of flour (maida), or the rising price of wheat the major ingredient, and other raw materials such as oil, fat, and eggs, and The price-sensitivity of the market  

The challenges would be category-specific. The biscuit category has seen rapid growth in the last few years.The implementation of packaging standardization norms appears to be a big challenge. Volatility in input costs is expected to remain, and this would add to the woes.In bread, profitability has remained the point of focus for some time. Players have been looking to increase the share of value-added products while focusing on operational efficiencies linked to daily distribution.The challenge for cakes would be to expand the consumption of packaged cakes. This challenge is also a significant opportunity for this particular segment. With the right enablers from the product and supply chain, this is a category waiting to explode or boom.To overcome the challenge of rising production costs, many national and international companies have come forward with solutions to reduce the production costs by offering on-site trial demonstrations, which would reduce the percentage of gluten, fat, eggs, and oil used in the recipe thus making it healthier in a way of making it as an edible option available to vegetarians and vegans.

Apart from this, it would also help to improve the nutritional value ofthe end-product by reducing the usage of harmful chemicals and preservatives to make it last longer on the shelves of supermarkets, grocery, and department stores which in turn would reduce the nutritional value of the said product.

Is bakery business profitable in India?

Yes, the Bakery Industry in India is profitable as backed up by several facts and figures. The Bakery Industry in India reached a value of US $7.22 Billion in 2018and further, the market value is projected to exceed US12 Billion by 2024. When done right without compromising on quality or quantity, the bakery business is easy to scale from your first location or home-setup to multiple outlets. First, you must select what type of bakery you want to run if it’s a bakery café, home-bakery, or delivery kitchen which is popularly known as cloud-kitchen. You need a strong business plan and market analysis before you step into the Bakery Industry in India.

Is the bakery industry growing?

As per the website of Expert Market Research, The global bakery products market reached a value of almost USD 507.38 billion in the year 2020. The bakery products industry is further expected to grow at a CAGR of 2.5% between 2021 and 2026 to reach a value of almost USD 574.05 billion by 2026. The United States is followed by China, which holds 7% of the global bakery market share. The United States is a major or rather say a significant region in the industry, which accounts for 20% of the global bakery market share. China and Brazil are the rapidly growing markets for bakery products, with an approximate growth rate of 10% in the past four years. Europe currently represents the largest bakery products market. Within Europe, Germany dominates the bread and rolls segment. 

The Bakery Industry in India is one of the largest segments in the food processing sector in India, the bakery industry offers huge opportunities for growth, innovation, and job generation. The Bakery Industry in India is separated into 3 categories namely,bread, biscuits, and cakes and pastries, the Bakery Industry in India reached a market value of USD 7.22 billion in 2018. As the second-largest producer of biscuits after the USA and China, India is a key player internationally, and with the entrepreneurial spirit of Indian companies and individuals, it is one of the most exciting regions for the bakery sector. Changing consumer taste, preferences, and lifestyle changing habits are shaping the Bakery Industry in India. As part of a global trend, there is a greater demand for healthier products and alternatives, particularly when it comes to bakery goods which are now more commonly consumed daily as opposed to being a treat. With high consumption rates, customers want baked goods that are guilt-free, lower on calories, sugars and are increasingly seeking gluten-free products or goods made with alternative ingredients such as multigrain and whole-wheat. Alongside healthier options, millennials, in particular, are always seeking new flavors and experiences, making flavor innovation key.With hectic lifestyles, Indian consumers are prioritizing convenience, and as loaves of bread and biscuits are fast-moving consumer goods (FMCG), bakeries are a go-to option. While Indian consumers have their demand and appetite for baked products, the Bakery Industry in India faces certain challenges. The industry is generally divided into organized and unorganized, with more than 2,000 organized or semi-organized bakeries, and 1,000,000 unorganized bakeries. Operational efficiency is a major issue in the industry, as is the lack of technology and skilled workers.Organized bakeries in India are also utilizing social media marketing and social media engagement to provide targeted and cost-effective marketing. Lacking the large budget of resources of international chains, local bakery-cafes are eschewing traditional marketing to rely on word-of-mouth recommendations rather than social media marketing and social media engagement. Tapping into the artisanal market, smaller bakeries can concentrate on quality over quantity, while larger Indian chains such as Barista and Mad Over Donuts rely on creating larger quantities but with strong branding and associated trust. Although there are obstacles that are causing losses like a lot of other industries which lack the proper use of types of machinery and other resources, there has been a boom in entrepreneurial endeavors in the bakery industry in India. Home baking has always been a popular pursuit, but with new technological innovations, individuals have been able to monetize their efforts.

What’s the future of the bakery industry?

Irrespective of certain difficulties, the forecast for the Bakery Industry in India is positive with a projected market value likely to exceed USD 12 billion by 2024 expanding at a CARG of 9.3% from 2019 to 2024. Along with these predictions, India occupies a unique position in the market as flavor innovation continues to grow in importance on a global scale. Indian traditions and access to interesting and unusual flavor combinations will allow them to continue to excel and innovate in this market.

Conclusion

The Bakery Industry in India is an industry that is only expected to grow and boom shortly because of the hectic and fast-paced life of a majority of people living in urban India along with the undying hunger with healthy gluten-free alternatives again provides enough area for the bakery industry in India to explore.