How promising is bakery franchising in India?
How promising is bakery franchising in India?

Over the last few years we have seen that bakery industry in India is rising at a CAGR of 12-15 per cent. With this growth, the segment has created an opportunity not only for men but also for women. And to get a closer picture of what’s trending in the bakery segment, Restaurant India presents a broader picture, have a look!

Current Scenario

The bakery industry is one such industry in India, which is growing as never before. With market size of Rs 1500 billion in 2014-2015, the industry is growing at CAGR of around 12-15 per cent. Bakery industry is widely dominated by unorganised players which accounts for  90 percent of the total share.

Being backed by the local as well as the global players in the market, states like Andhra Pradesh, Maharashtra, West Bengal, Karnataka, Tamil Nadu, Kerala and parts of Chandigarh and Delhi-NCR dominates the bakery segment in India.

Not only individual players, hotels and restaurants are organising regular festivals and include bakery items in their menu, where they have the best of desserts and savouries lined up. Unorganised segment which comprises of the small bakery units are catering to the demands of individuals. These units are usually cottage and household type manufacturing, mostly owned by women entrepreneurs.

Where was India in 2010?

The bakery India in India was valued at Rs 69 billion in 2010 that too when the industry dominated by unorganised segment. Earlier, only a few players including Monginis and Britannia used to hold a small percentage in the market. Despite of the fact that India ranked third in global bakery industry and second in biscuits, the industry could not do much progress as people were not interested in experimenting with the western culture. But as time passed by, with transformation taking place at present, the industry has seen a wide number of organised as well as unorganised players entering into the market.

Bakery Market has seen a fairly sophisticated growth in last few years. Earlier there were only few players in the segment but with people becoming aware of the global market, today the quality of the bakery product is same in India as it used to be in US,” says Chetan Khurana, Owner, Lucky’s Bakery.

Women in the biz

Bakery industry has given an edge to the entrepreneurial skills of the women in India. In last two years places like Gurgaon, Chandigarh and Coimbatore have seen a growing number of women entrepreneurs entering into the Bakery industry.

According to a media report, Divya Gopinathan, who has worked with IBM for nine years in England and Holland when came back to Gurgaon office as a SAP Payroll consultant. But her love for bakery was persistent.

"I wanted to get out of the rat race and do something on my own to make use of my creative abilities. That's when I decided to go for it," says Divya, who launched De Cakery in 2011.

Meanwhile, for skills development among women in the bakery industry, The National Skill Development Corporation (NSDC) has signed a MoU with Assocom India Pvt Ltd (one of India’s premier food consulting and skill education companies) to create employment opportunities for women. They provide quality training in baking, milling and food technology sectors.

The training programme focuses on fresh students, unskilled workers, to-be entrepreneurs and entrepreneurs without formal training.  They also provide on-site training to working professionals in the targeted sector.

Industry mix

The baking industry is majorly dominated by bread, biscuits and Cakes & Pastry. The volume of organised bread industry is estimated Rs 50 billion and is growing at the rate of 15 per cent annually.

Cakes and Pastry has Rs 500-600 billion market and this segment growing at 20 per cent annually.  Meanwhile, Biscuit which is dominated by players like Britannia and Parle has a ticket size of Rs 100 billion which is only 60 per cent of organised biscuit units and rest of the market covered by unorganised units.

“We serve handmade, preservative free and natural products. We started our business two years back and starting selling our product on social made platform. Getting huge responses from the customers, we opened our first outlet in October 2013,” says, Apeksha Jain, Chief Confiturier, The Gourmet Jar.

Way Ahead

With people becoming more open to eating out and more women taking up entrepreneurial journey, bakery industry is growing at CAGR 12-15 per cent. And it will constitute a considerable size in the F&B segment in the years to come.

As the segment offers great opportunities for budding entrepreneurs, it is becoming an ideal place for doing something that involves creativity and Franchise India at its biggest retail and franchising show has brought some promosing brand like The Chocolate Room, Bombay Brasserie and more who are ready to expand their portfolio.

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