Market Potential for Bakery Ovens in India

7/28/2019 Market Potential for Bakery Ovens in India

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Market Potential for Bakery Ovens in India


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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 FORBAKERY OVENS ........................................................................................ 26

RECOMMENDATIONS............................................................................................................................29

ANNEXURE................................................................................................................................................32


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Scope of study

1. Identify trends in consumption of bakery products and plannedinvestments by large producers in India.

2. Define the market based on identification of product line, customergroup, geography, sales channel.

3. Competitor analysis - assess strengths/ weaknesses of thecompetition, including imports.

4. Derive high level estimates of market size, current and potential, forbakery products. This will include the major segments of the market

industrial, wholesale and retail producers of bakery products. Datawill be gathered from bakery associations SIB, NABI

5. Obtain estimates of market potential for bakery equipment in MiddleEast and Asia Pacific from secondary sources.

6. Recommend suitable market research plan, if more refined estimatesof market size are required.

Description of the bakery industry

The bakery industry consists of three broad product lines

i) Bread and rollsii) Cakes and pastriesiii)Biscuits and cookiesThis 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 inthe 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 hencereliable information on the industry and market structure is hard to

come by. Major industry associations do provide some estimates on thecurrent size of the market and its growth rate. These are summarizedbelow

i) Source: All India Bread Manufacturers Association (AIBMA)Large scale manufacturers 2

Medium scale manufacturers 25Small scale manufacturers 1,800

Unorganized single store bakers 75,000

Organized sector production bread 1,500,000 MT

Organized sector production cakes andpastries

424,000 MT

Total organized sector production 1,924,000 MT

Estimated unorganized sector production 2,352,000 MT

Total production of bread, cakes andpastries

4,276,000 MT

Per capita consumption of bread 2.3 kg / year

Growth rate in production 3 % p.a.

ii) Source: Central Statistical Organization (CSO)No of factories 970

Productive Capital Rs 871 cr

Employees 41530

Gross output Rs 4343 cr

Net value add Rs 597 cr

CSO data corresponds to the NIC industry code 1541 which includesbread, biscuits and other bakery product manufacturing units registeredunder the Factories Act, 1948.


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ANALYSIS

Demand drivers

Higher income levels, increasing urbanization and favourabledemographics are the key drivers of higher bakery product consumptionin India.

A trend towards higher urbanization is clearly visible. The percentage ofurban population has increased from 23.3% in 1981 to 27.8% in 2001.At the 1991 census, there were 23 urban agglomerations with apopulation of a million. This figure has risen to 35 in the 2001 census.Stagnant growth in the agricultural economy and considerably betteremployment prospects in the urban centric manufacturing and service

economies is driving increasing migration to urban areas. Sales of bakeryproducts which are considered convenience foods is expected to benefitconsiderably 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 ofbakery products.


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Market Potential for Bakery Ovens in India

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