BAKED GOODS IN INDIA

Euromonitor International
December 2016
BAKED GOODS IN INDIA Passport I

LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape ................................................................................................................ 1
Prospects ..................................................................................................................................... 2
Category Data .............................................................................................................................. 3
Table 1 Sales of Baked Goods by Category: Volume 2011-2016 ............................. 3
Table 2 Sales of Baked Goods by Category: Value 2011-2016 ................................ 3
Table 3 Sales of Baked Goods by Category: % Volume Growth 2011-2016 ............ 4
Table 4 Sales of Baked Goods by Category: % Value Growth 2011-2016 ............... 4
Table 5 Sales of Pastries by Type: % Value 2011-2016 ........................................... 4
Table 6 NBO Company Shares of Baked Goods: % Value 2012-2016 ..................... 5
Table 7 LBN Brand Shares of Baked Goods: % Value 2013-2016 ........................... 5
Table 8 Distribution of Baked Goods by Format: % Value 2011-2016 ...................... 6
Table 9 Forecast Sales of Baked Goods by Category: Volume 2016-2021 .............. 7
Table 10 Forecast Sales of Baked Goods by Category: Value 2016-2021 ................. 7
Table 11 Forecast Sales of Baked Goods by Category: % Volume Growth
2016-2021 .................................................................................................... 7
Table 12 Forecast Sales of Baked Goods by Category: % Value Growth 2016-
2021 ............................................................................................................. 8

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BAKED GOODS IN INDIA

HEADLINES
Baked goods value sales grow by 8% to reach Rs129 billion, while volumes rise by 2% to 3
million tonnes.
Manufacturers increasingly targeting lower-income consumers and deepening penetration of
rural areas.
Packaged cakes is the fastest growing category in value terms, with sales rising by 13% to
Rs21 billion.
The average unit price of baked goods increases by 5% in current terms in 2016.
Artisanal producers dominate baked goods in 2016, though their share continues to decline.
Baked goods is forecast to see value rise with a 2% CAGR over 2016-2021 to reach Rs142
million.

TRENDS
The acceleration of consumer lifestyles, through factors such as urbanisation, a changing
employment environment and women entering the workforce, is driving demand for
convenient snacks, spurring sales across baked goods categories.
Packaged cakes was the fastest growing baked goods category in value terms in 2016, with a
13% increase in sales, as it benefited from its increasing popularity as a snack choice for
children.
Baked goods saw a 5% rise in the average unit price in 2016, primarily as a result of inflation.
Growing demand for added-value products, such as croissants and wholewheat bread also
made a contribution, though this was largely offset by the increasing availability of lower-
priced products as manufacturers sought to deepen their penetration of rural areas.
Unpackaged bread notably saw marginally faster value growth than packaged bread in India
in 2016 for the first time in the review period. However, packaged bread continued to see
faster volume growth, pointing to the important role of lower-priced products as manufacturers
and retailers look to expand in less affluent rural areas.
Traditional grocery retailers, primarily food/drink/tobacco specialists and independent small
grocers, continued to dominate baked goods in India in 2016, accounting for 90% of value
sales. However, both supermarkets and hypermarkets saw a slight increase in share of baked
goods value sales during the year.

COMPETITIVE LANDSCAPE
Artisanal producers accounted for 49% of baked goods value sales in India in 2016, though
they saw their share fall steadily from 52% over the review period.
Domestic company, Britannia Industries, remained the leading branded player in baked goods
in India in 2016, registering a 9% value share, as it maintained a trend of share expansion
that extended throughout the review period. The company, Indias leading player in both
bread and cakes, benefits from a broad product offer spanning a wide range of price points,
strong distribution, particularly in modern grocery retailing, and a health-orientated innovation
strategy. This health focused approach has also included Britannias claim to be the first zero
trans fat baker in India.

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Modern Food Enterprises became the second largest player in baked goods in 2016, holding
a 4% value share, as private equity firm, Everstone Group, acquired the Modern brand from
Hindustan Unilever. Under its new ownership, Modern is looking to focus on on quality,
affordability and health aspects, as well as entry into new categories.
With a large number of local bakeries catering to local needs, the Indian baked goods market
is very fragmented. The prominence of small, local players means that the market is
dominated by economy and standard brands with a few niche players offering premium
products in metropolitan centres, such as Mumbai, Delhi, Bengaluru, Chennai and Kolkata.
The presence of private label baked goods is also low due to the limited penetration of
modern retail outlets in the country.

PROSPECTS
Manufacturers will drive baked goods growth in India by expanding distribution and product
offers to target rural areas, as well developing sales amongst mid-lower income urban
consumers. This environment will continue to favour domestic players with strong knowledge
of local conditions.
Baked goods value sales are forecast to grow with a 2% CAGR in constant terms over 2016-
2021, slightly slower than the near 3% constant value CAGR of the review period. This
deceleration will result in part from the importance of lower-priced products in expanding the
baked goods consumer base, both within the urban context and in the deepening penetration
of rural areas. Indeed, volumes are set to grow with a 3% CAGR over the review period, a
similar rate of growth to that seen between 2011 and 2016.
Packaged cakes is forecast to be the fastest-growing baked goods category in India over
2016-2021, with a constant value CAGR of 6%. The category is benefiting from the growing
demand for convenience, with packaged cakes increasingly seen as an easy breakfast option,
and the ongoing rise of snacking. Bread is set to be the poorest performer in constant value
terms over the forecast period, with sales stagnating. While both packaged and unpackaged
bread are expected to see volumes rise, increasing purchases of lower-priced products will
constrain value growth.
The average baked goods unit price is forecast to fall with a 1% CAGR in constant terms over
2016-2021. Again, this will derive largely from the rising importance of lower-priced products,
as manufacturers and retailers target lower-income urban consumers and relatively untapped
rural areas. Unit prices are expected to fall across all baked goods categories over the
forecast period.
While supermarkets and hypermarkets are set to continue to expand their geographic
coverage over the forecast period, manufacturers increasing determination to reach rural
consumers will support the continued dominance of traditional grocery retailers in the Indian
baked goods market.
The forecast period is set to see major domestic manufacturers, such as Britannia, look to
consolidate and develop their positions by expanding their consumer bases. While Britannias
expansion into rural areas will focus largely on biscuits (the company is Indias leading player
in sweet biscuits), it is also likely to play a significant role in the development of its baked
goods interests. Recently separated from Hindustan Unilever, Modern Food Enterprises is
also set to expand its geographic coverage within the market.
While targeting mid-lower income consumers with affordable products, the leading baked
goods players are also set to continue to develop added-value baked goods. Britannia and
Modern are amongst the major local players placing a particular emphasis on the rise in
consumer health-consciousness in their innovation strategies.

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Modern Food Enterprises is also looking to expand into adjacent categories both organically
and via acquisitions. Currently, the companys baked goods sales are entirely reliant on
bread. However, there are opportunities for the company to move into other categories via the
acquisition of fellow local players, such as Monginis or Milka Nutriments.

CATEGORY DATA
Table 1 Sales of Baked Goods by Category: Volume 2011-2016

'000 tonnes
2011 2012 2013 2014 2015 2016

Bread 2,235.2 2,280.3 2,338.0 2,383.2 2,446.0 2,494.2

- Flat Bread - - - - - -
-- Packaged Flat Bread - - - - - -
-- Unpackaged Flat Bread - - - - - -
- Leavened Bread 2,235.2 2,280.3 2,338.0 2,383.2 2,446.0 2,494.2
-- Packaged Leavened 777.7 798.7 823.1 838.1 862.6 881.7
Bread
-- Unpackaged Leavened 1,457.5 1,481.6 1,514.9 1,545.1 1,583.4 1,612.6
Bread
Cakes 144.8 154.8 165.8 175.5 187.5 199.0
- Packaged Cakes 60.4 65.2 71.0 75.9 82.1 88.1
- Unpackaged Cakes 84.4 89.5 94.7 99.7 105.4 110.9
Dessert Mixes 18.1 20.2 22.7 25.6 28.7 32.0
Frozen Baked Goods - - - - - -
Pastries 20.3 21.9 23.7 25.5 27.2 28.9
- Packaged Pastries 2.0 2.1 2.3 2.4 2.5 2.6
- Unpackaged Pastries 18.3 19.8 21.4 23.1 24.7 26.4
Baked Goods 2,418.4 2,477.2 2,550.2 2,609.7 2,689.4 2,754.2
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2 Sales of Baked Goods by Category: Value 2011-2016

INR million
2011 2012 2013 2014 2015 2016

Bread 58,882.9 65,012.0 70,384.8 76,072.5 82,401.4 87,724.6

- Flat Bread - - - - - -
-- Packaged Flat Bread - - - - - -
-- Unpackaged Flat Bread - - - - - -
- Leavened Bread 58,882.9 65,012.0 70,384.8 76,072.5 82,401.4 87,724.6
-- Packaged Leavened 25,218.7 28,209.0 30,760.4 33,436.6 36,504.5 38,826.3
Bread
-- Unpackaged Leavened 33,664.3 36,803.0 39,624.4 42,635.9 45,896.9 48,898.3
Bread
Cakes 15,548.2 18,298.8 21,468.0 24,872.3 28,602.8 31,876.7
- Packaged Cakes 9,640.7 11,467.5 13,655.9 16,113.9 18,835.0 21,251.4
- Unpackaged Cakes 5,907.5 6,831.3 7,812.1 8,758.4 9,767.7 10,625.3
Dessert Mixes 3,132.1 3,526.2 4,022.0 4,590.1 5,179.7 5,689.5
Frozen Baked Goods - - - - - -
Pastries 1,915.7 2,278.4 2,583.8 2,912.4 3,258.6 3,547.3
- Packaged Pastries 186.5 219.5 246.6 276.0 305.4 327.7
- Unpackaged Pastries 1,729.2 2,058.9 2,337.2 2,636.4 2,953.2 3,219.6
Baked Goods 79,478.9 89,115.4 98,458.5 108,447.2 119,442.4 128,838.1

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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Sales of Baked Goods by Category: % Volume Growth 2011-2016

% volume growth
2015/16 2011-16 CAGR 2011/16 Total

Bread 2.0 2.2 11.6

- Flat Bread - - -
-- Packaged Flat Bread - - -
-- Unpackaged Flat Bread - - -
- Leavened Bread 2.0 2.2 11.6
-- Packaged Leavened Bread 2.2 2.5 13.4
-- Unpackaged Leavened Bread 1.8 2.0 10.6
Cakes 6.1 6.6 37.4
- Packaged Cakes 7.4 7.8 45.9
- Unpackaged Cakes 5.2 5.6 31.4
Dessert Mixes 11.5 12.1 77.3
Frozen Baked Goods - - -
Pastries 6.3 7.4 42.7
- Packaged Pastries 3.4 5.4 30.0
- Unpackaged Pastries 6.6 7.6 44.0
Baked Goods 2.4 2.6 13.9
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Sales of Baked Goods by Category: % Value Growth 2011-2016

% current value growth

2015/16 2011-16 CAGR 2011/16 Total

Bread 6.5 8.3 49.0

- Flat Bread - - -
-- Packaged Flat Bread - - -
-- Unpackaged Flat Bread - - -
- Leavened Bread 6.5 8.3 49.0
-- Packaged Leavened Bread 6.4 9.0 54.0
-- Unpackaged Leavened Bread 6.5 7.8 45.3
Cakes 11.4 15.4 105.0
- Packaged Cakes 12.8 17.1 120.4
- Unpackaged Cakes 8.8 12.5 79.9
Dessert Mixes 9.8 12.7 81.7
Frozen Baked Goods - - -
Pastries 8.9 13.1 85.2
- Packaged Pastries 7.3 11.9 75.7
- Unpackaged Pastries 9.0 13.2 86.2
Baked Goods 7.9 10.1 62.1
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 Sales of Pastries by Type: % Value 2011-2016

% retail value rsp

2011 2012 2013 2014 2015 2016

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Apple turnovers 7.0 6.8 6.8 6.5 6.2 6.2

Chocolate-Coated Buns 2.0 2.3 2.3 2.3 2.3 2.3
Cinnamon Rolls 2.0 2.3 2.3 2.3 3.2 3.2
Cream Rolls 11.0 11.2 11.3 11.3 11.3 11.3
Croissants 16.0 17.0 17.5 17.8 17.9 18.0
Doughnuts 4.2 4.3 4.3 4.5 4.8 4.9
clairs 5.0 5.3 5.3 5.3 5.3 5.3
Muffins 9.5 9.8 9.8 9.9 10.0 10.0
Puff Pastries 23.5 23.8 23.8 23.9 24.0 24.0
Savoury Buns 9.0 9.3 9.3 9.3 9.2 9.0
Others 10.8 8.1 7.4 6.9 5.8 5.8
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 6 NBO Company Shares of Baked Goods: % Value 2012-2016

% retail value rsp

Company 2012 2013 2014 2015 2016

Britannia Industries Ltd 8.8 9.0 9.2 9.4 9.5

Modern Food Enterprises - - - - 4.0
Pvt Ltd
Monginis Foods Ltd 2.6 2.8 3.1 3.4 3.5
Weikfield Products Co 0.9 0.9 0.9 1.0 1.0
(India) Pvt Ltd
Gits Food Products Pvt 0.8 0.8 0.9 0.9 0.9
Ltd
Spencer's Retail Ltd 0.8 0.8 0.9 0.8 0.8
MTR Foods Ltd 0.7 0.7 0.8 0.7 0.8
Milka Nutriments Pvt Ltd 0.5 0.5 0.5 0.5 0.5
Farinni Ltd 0.3 0.4 0.4 0.4 0.4
Hindustan Unilever Ltd 4.8 4.7 4.5 4.5 0.4
United Trading Corp 0.3 0.3 0.3 0.2 0.2
Bambino Agro Industries 0.2 0.2 0.2 0.2 0.2
Ltd
General Mills India Pvt 0.1 0.1 0.1 0.1 0.1
Ltd
Orkay Instant Foods Pvt 0.1 0.1 0.1 0.1 0.1
Ltd
Artisanal 51.3 50.6 49.8 49.1 48.7
Others 27.9 28.1 28.3 28.6 28.8
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7 LBN Brand Shares of Baked Goods: % Value 2013-2016

% retail value rsp

Brand (GBO) Company (NBO) 2013 2014 2015 2016

Britannia Britannia Industries Ltd 9.0 9.2 9.4 9.5

Modern Modern Food Enterprises - - - 4.0
Pvt Ltd
Monginis Monginis Foods Ltd 2.8 3.1 3.4 3.5
Weikfield Weikfield Products Co 0.9 0.9 1.0 1.0
(India) Pvt Ltd

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Gits Gits Food Products Pvt Ltd 0.8 0.9 0.9 0.9
Spencer's (Private Spencer's Retail Ltd 0.8 0.9 0.8 0.8
Label)
MTR (Orkla Group) MTR Foods Ltd 0.7 0.8 0.7 0.8
Milka Milka Nutriments Pvt Ltd 0.5 0.5 0.5 0.5
Farinni Farinni Ltd 0.4 0.4 0.4 0.4
Brown & Polson Hindustan Unilever Ltd 0.3 0.3 0.3 0.3
(Premier Foods Plc)
Bluebird United Trading Corp 0.3 0.3 0.2 0.2
Bambino Bambino Agro Industries 0.2 0.2 0.2 0.2
Ltd
Orkay Orkay Instant Foods Pvt 0.1 0.1 0.1 0.1
Ltd
Rex (Unilever Group) Hindustan Unilever Ltd 0.1 0.0 0.0 0.0
Modern (Unilever Hindustan Unilever Ltd 4.4 4.2 4.1 -
Group)
Artisanal Artisanal 50.6 49.8 49.1 48.7
Other Private Label Other Private Label 0.8 0.8 0.9 0.9
(Private Label)
Others Others 27.4 27.6 27.9 28.0
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 8 Distribution of Baked Goods by Format: % Value 2011-2016

% retail value rsp

2011 2012 2013 2014 2015 2016

Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0

- Grocery Retailers 100.0 100.0 100.0 100.0 100.0 100.0
-- Modern Grocery 9.0 9.4 9.6 9.6 9.7 9.8
Retailers
--- Convenience Stores 0.2 0.2 0.2 - - -
--- Discounters - - - - - -
--- Forecourt Retailers 0.0 0.0 0.0 - - -
--- Hypermarkets 5.2 5.3 5.4 5.7 5.8 5.9
--- Supermarkets 3.6 3.8 3.9 3.9 3.9 4.0
-- Traditional Grocery 91.0 90.6 90.4 90.4 90.3 90.2
Retailers
--- Food/drink/tobacco 58.3 58.3 58.2 58.2 58.2 58.2
specialists
--- Independent Small 31.2 30.8 30.7 30.7 30.7 30.6
Grocers
--- Other Grocery 1.5 1.5 1.5 1.5 1.4 1.4
Retailers
- Non-Grocery Specialists - - - - - -
-- Health and Beauty - - - - - -
Specialist Retailers
-- Other Foods Non- - - - - - -
Grocery Specialists
- Mixed Retailers - - - - - -
Non-Store Retailing - - 0.0 0.0 0.0 0.0
- Vending - - - - - -
- Homeshopping - - - - - -
- Internet Retailing - - - - - -
- Direct Selling - - 0.0 0.0 0.0 0.0
Total 100.0 100.0 100.0 100.0 100.0 100.0

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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 9 Forecast Sales of Baked Goods by Category: Volume 2016-2021

'000 tonnes
2016 2017 2018 2019 2020 2021

Bread 2,494.2 2,527.4 2,574.7 2,632.3 2,700.0 2,772.4

- Flat Bread - - - - - -
-- Packaged Flat Bread - - - - - -
-- Unpackaged Flat Bread - - - - - -
- Leavened Bread 2,494.2 2,527.4 2,574.7 2,632.3 2,700.0 2,772.4
-- Packaged Leavened 881.7 895.0 915.3 940.3 970.2 1,002.4
Bread
-- Unpackaged Leavened 1,612.6 1,632.3 1,659.4 1,692.1 1,729.9 1,770.0
Bread
Cakes 199.0 210.4 222.2 234.5 247.3 260.6
- Packaged Cakes 88.1 94.3 100.7 107.2 114.0 121.1
- Unpackaged Cakes 110.9 116.1 121.6 127.3 133.3 139.5
Dessert Mixes 32.0 35.5 39.1 42.9 46.8 51.0
Frozen Baked Goods - - - - - -
Pastries 28.9 30.6 32.3 34.2 36.1 38.1
- Packaged Pastries 2.6 2.6 2.7 2.8 2.9 3.0
- Unpackaged Pastries 26.4 27.9 29.6 31.3 33.2 35.1
Baked Goods 2,754.2 2,803.8 2,868.4 2,943.9 3,030.3 3,122.1
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 10 Forecast Sales of Baked Goods by Category: Value 2016-2021

INR million
2016 2017 2018 2019 2020 2021

Bread 87,724.6 88,194.3 88,831.4 89,609.9 90,361.1 90,948.4

- Flat Bread - - - - - -
-- Packaged Flat Bread - - - - - -
-- Unpackaged Flat Bread - - - - - -
- Leavened Bread 87,724.6 88,194.3 88,831.4 89,609.9 90,361.1 90,948.4
-- Packaged Leavened 38,826.3 39,062.4 39,652.8 40,463.3 41,321.7 42,171.2
Bread
-- Unpackaged Leavened 48,898.3 49,131.9 49,178.6 49,146.6 49,039.4 48,777.2
Bread
Cakes 31,876.7 33,541.2 35,091.3 36,644.9 38,217.1 39,793.2
- Packaged Cakes 21,251.4 22,621.6 23,910.4 25,212.1 26,537.5 27,874.1
- Unpackaged Cakes 10,625.3 10,919.6 11,180.9 11,432.9 11,679.6 11,919.1
Dessert Mixes 5,689.5 5,934.6 6,186.7 6,427.1 6,658.2 6,882.4
Frozen Baked Goods - - - - - -
Pastries 3,547.3 3,653.4 3,767.1 3,886.7 4,003.4 4,117.9
- Packaged Pastries 327.7 332.0 337.8 344.6 351.8 359.4
- Unpackaged Pastries 3,219.6 3,321.4 3,429.3 3,542.1 3,651.6 3,758.5
Baked Goods 128,838.1 131,323.6 133,876.5 136,568.6 139,239.8 141,742.0
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 11 Forecast Sales of Baked Goods by Category: % Volume Growth 2016-2021

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% volume growth
2016/17 2016-21 CAGR 2016/21 Total

Bread 1.3 2.1 11.2

- Flat Bread - - -
-- Packaged Flat Bread - - -
-- Unpackaged Flat Bread - - -
- Leavened Bread 1.3 2.1 11.2
-- Packaged Leavened Bread 1.5 2.6 13.7
-- Unpackaged Leavened Bread 1.2 1.9 9.8
Cakes 5.7 5.5 30.9
- Packaged Cakes 7.0 6.6 37.4
- Unpackaged Cakes 4.7 4.7 25.8
Dessert Mixes 10.8 9.7 59.1
Frozen Baked Goods - - -
Pastries 5.7 5.7 31.9
- Packaged Pastries 2.6 3.3 17.9
- Unpackaged Pastries 6.0 5.9 33.2
Baked Goods 1.8 2.5 13.4
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 12 Forecast Sales of Baked Goods by Category: % Value Growth 2016-2021

% constant value growth

2016/2017 2016-21 CAGR 2016/21 TOTAL

Bread 0.5 0.7 3.7

- Flat Bread - - -
-- Packaged Flat Bread - - -
-- Unpackaged Flat Bread - - -
- Leavened Bread 0.5 0.7 3.7
-- Packaged Leavened Bread 0.6 1.7 8.6
-- Unpackaged Leavened Bread 0.5 0.0 -0.2
Cakes 5.2 4.5 24.8
- Packaged Cakes 6.4 5.6 31.2
- Unpackaged Cakes 2.8 2.3 12.2
Dessert Mixes 4.3 3.9 21.0
Frozen Baked Goods - - -
Pastries 3.0 3.0 16.1
- Packaged Pastries 1.3 1.9 9.7
- Unpackaged Pastries 3.2 3.1 16.7
Baked Goods 1.9 1.9 10.0
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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