OMEGA ANALYTICS

Market Potential for Bakery Ovens in India

OMEGA ANALYTICS

TABLE OF CONTENTS

SCOPE OF STUDY ...................................................................................................................................... 3

DESCRIPTION OF THE BAKERY INDUSTRY ..................................................................................... 3
METHODOLOGY ....................................................................................................................................... 3
FINDINGS..................................................................................................................................................... 5
INDUSTRY STRUCTURE ................................................................................................................................ 5
INDUSTRY / MARKET TRENDS ...................................................................................................................... 6
ANALYSIS .................................................................................................................................................. 14
DEMAND DRIVERS..................................................................................................................................... 14
BAKERY PRODUCTION............................................................................................................................... 17
INDUSTRY STRUCTURE .............................................................................................................................. 21
ESTIMATION OF DEMAND FOR BAKERY OVENS ........................................................................................ 26
RECOMMENDATIONS............................................................................................................................ 29
ANNEXURE................................................................................................................................................ 32

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Scope of study
1. Identify trends in consumption of bakery products and planned
investments by large producers in India.
2. Define the market based on identification of product line, customer
group, geography, sales channel.
3. Competitor analysis - assess strengths/ weaknesses of the
competition, including imports.
4. Derive high level estimates of market size, current and potential, for
bakery products. This will include the major segments of the market
industrial, wholesale and retail producers of bakery products. Data
will be gathered from bakery associations SIB, NABI
5. Obtain estimates of market potential for bakery equipment in Middle
East and Asia Pacific from secondary sources.
6. Recommend suitable market research plan, if more refined estimates
of market size are required.

Description of the bakery industry

The bakery industry consists of three broad product lines
i) Bread and rolls
ii) Cakes and pastries
iii) Biscuits and cookies
This study deals with trends and potential for bread, cakes and pastries
target market for bakery equipment.

Methodology
The following information sources were tapped to understand trends in
the bakery industry.
a) Survey of about 100 bakery counters in central Bangalore,
discussions with about 35 larger bakery counters (200 kgs sales per
day and above)
b) Industry associations

All India Bread Manufacturers Association

Society of Indian Bakers
Federation of Indian Chambers of Commerce and Industry
Karnataka Roller Flour Mills Association

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c) Government sources

Department of Industries and Commerce Karnataka & Kerala

Commercial Taxes Department Karnataka
Central Statistical Organization, Kolkata
Director General of Commercial Intelligence & Statistics

d) Industry experts from

Nilgiris
Sweet Chariot
Institute of Baking & Cake Art
McRennet
Bunge
SAF Yeast

e) Business newspapers Economic Times and Business Line

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FINDINGS
Industry structure
The bakery industry in India has not been well studied and hence
reliable information on the industry and market structure is hard to
come by. Major industry associations do provide some estimates on the
current size of the market and its growth rate. These are summarized
below
i) Source: All India Bread Manufacturers Association (AIBMA)
Large scale manufacturers
Medium scale manufacturers
Small scale manufacturers
Unorganized single store bakers
Organized sector production bread
Organized sector production cakes and
pastries
Total organized sector production
Estimated unorganized sector production
Total production of bread, cakes and
pastries
Per capita consumption of bread
Growth rate in production

2
25
1,800
75,000
1,500,000 MT
424,000 MT
1,924,000 MT
2,352,000 MT
4,276,000 MT
2.3 kg / year
3 % p.a.

ii) Source: Central Statistical Organization (CSO)

No of factories
Productive Capital
Employees
Gross output
Net value add

970
Rs 871 cr
41530
Rs 4343 cr
Rs 597 cr

CSO data corresponds to the NIC industry code 1541 which includes
bread, biscuits and other bakery product manufacturing units registered
under the Factories Act, 1948.

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ANALYSIS
Demand drivers
Higher income levels, increasing urbanization and favourable
demographics are the key drivers of higher bakery product consumption
in India.
A trend towards higher urbanization is clearly visible. The percentage of
urban population has increased from 23.3% in 1981 to 27.8% in 2001.
At the 1991 census, there were 23 urban agglomerations with a
population of a million. This figure has risen to 35 in the 2001 census.
Stagnant growth in the agricultural economy and considerably better
employment prospects in the urban centric manufacturing and service
economies is driving increasing migration to urban areas. Sales of bakery
products which are considered convenience foods is expected to benefit
considerably from this trend.
Census of India projections shown in Figs 2 and 3 indicate that the
population profile will shift towards a higher working age group (15-60)
which is also the segment with the highest per capita consumption of
bakery products.

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