Bakery Industry Came Out Stronger Despite Challenges Including Pandemic

Gaurav Kukreja
Gaurav Kukreja Aug 02 2022 - 5 min read
Bakery Industry Came Out Stronger Despite Challenges Including Pandemic
No matter what part of India you go to, you will find iconic bakeries like Kayani Bakery, Pune, Wengers, Delhi & Ellora’s, Dehradun to name a few, making the Bakery Industry vibrant and widespread.

India is a country that loves its food, the diversity of cultures is visible in the plethora of cuisines you find here. The European occupation of India be it the British, French or Portuguese also left a huge impact on the culture of India and among the many things they brought with them, baked goods are one thing that has touched every household in India. Breads, Paos, Cakes, Biscuits, Khari & Rusks have been Indian foods for a while now and now the new trends of cookies, croissants, donuts and cupcakes are also on people’s plates.

No matter what part of India you go to, you will find iconic bakeries like Kayani Bakery, Pune, Wengers, Delhi & Ellora’s, Dehradun to name a few, making the Bakery Industry vibrant and widespread.

The bakery industry comprises different players that run the market. Huge FMCG manufacturers to small home bakers meeting the increasing demand. As per the data collected by Expert Market Research, The Indian bakery market 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.

India presents tremendous prospects for expansion & innovation in this sector as there is a trend change that has happened over the years, people are now open to new tastes and experiences and also have a higher disposable income, this new mindset has helped them broaden their horizons. A large trend also indicates a shift from people gifting regular Indian sweets to gifting confectionery items.

There is an ease of entry and accessibility in this market which leads to healthy competition and creates numerous opportunities, Be it a commercial bakery, home chefs, event caterers or wholesale players adding value. With these factors in mind and sheer talent, the growth possibilities are endless.

However, there are many challenges in the industry which are as follow:

High Cost Of Infrastructure: You must first select whether you want to create a retail bakery or a wholesale bakery before you can begin arranging the specifications of your bakery. Deciding this is crucial because it will influence how you engage with your clients and how much money you need to invest.

Customers can buy baked goods directly from a retail bakery. You can establish them in various shapes and sizes, but they all need at least one employee to manage the cash register and assist customers.

Perishable goods, Low shelf Life, Careful planning of production to avoid wastage:

All the baked goods are perishable and have low shelf life so it becomes a challenge to produce a good that could get encash as soon as possible. Preparing goods while avoiding wastage, is also a major challenge in this sector.

Logistical Challenges To Delivery Fragile and Perishable Goods:

When it comes to deliver what you have produced, logistic is the most challenging part in this sector as all the items are fragile in nature and require great care and handling. Supplying cakes and cookies is a work of great care as they tend to ruin with even slightest hit. The vehicle in which all these items are supplied should be of a unique structure with proper support so that the items do not move from their place and remain the shape. However, sometimes despite all the measures taken care of, things go out of hand and producer has to suffer loss.

Fluctuating Raw Materials Pricing Due To Natural, Political Or Economical Unrest:

Price fluctuations exist for any good that is seasonal, coming in abundance during some months and becoming rare in other months. As it turns out, this is exactly the nature of many of the raw materials that are used by a bakery. They tend to experience price fluctuations from one season to the next, and also from one year to the next, with some of these price fluctuations being quite extreme.

For example, the price of wheat is known to fluctuate from one year to the next. The same goes for vegetable oil that bakeries use. Natural gas, which is often used to bake the products, can see price fluctuations of by as much as 25 percent.

Survival Challenge During COVID-19: The COVID-19 pandemic has significantly impacted the whole food and beverages industry among which bakery industry is one of them. This pandemic has resulted into mass production shutdowns and supply chain disruptions which has also affected the economy as well.

Due to lockdown, during the start of 2020, sales of non-edible products such as disinfectants, toilet paper, paper goods, and hand sanitiser were high in demand and the sales of edible products such as bakery, meat products, and many others were up to the mark as the supply of bakery was insufficient as many of the bakers have shut operations due to shortage of labours.

Along with this, disruption in logistics facilities due to the lockdown has created more issues in the market as consumers were not getting products as per their requirement which ultimately affected the market.

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