MARKETING MANAGEMENT

REPORT
ON

CHANGING
CONSUMER
TRENDS IN BAKERY
INTRODUCTION
The report revolves around understanding the change in consumer trends in the bakery industry with the help
of market research in the same segment. The report also extends a suggestion to any new entrepreneur who is
willing to start a new business in the bakery industry limited to selling only bread.

OVERVIEW OF BAKERY INDUSTRY

The bakery industry in India is one of the largest segments of the food processing sector with over a million
unorganized bakeries and over 2000 bakeries in the organized and semi-organized sector. India is the 2nd
largest producer of biscuits next to US. The India Bakery Market was valued at US$ 7.22 Billion in 2018 which
grew to US$ 8 Billion in 2019. This robust growth can be attributed to the convenience and affordability of the
products. On the basis of distribution channel, convenience stores represent the largest segment, followed by
supermarkets, independent retailers and personal bakeries. Some of the key players in the bakery industry
include – Britannia, English Oven, ITC, etc. While bakery Industry in India seems promising, it has its own
challenges to face. To continue growing and meet the increasing consumer demand, bakeries need to invest in
making the facilities more hygienic and hire people with sufficient knowledge and skills. Despite the
challenges, the forecast of this industry is positive in India.

TRENDS
The ease of availability and convenience of bakery items have made them the most sought-after consumer
goods these days. With increasing awareness among people regarding health, a variety of different types of
breads have been introduced in the market like Brown bread, multigrain bread, gluten-free bread, etc. The
growing trend for lighter and healthier food has also led to increase in demand for sugar free and healthy
bakery products. Another trend is the increasing preference for homemade products. The advent of social
media has helped home bakers and others in the unorganized sector to reach a wider market. The Indian
bakery industry is expected to surpass USD 12 billion by 2024 with a CAGR of 9.3% during 2019 to 2024. One of
the major reasons for this being the extraordinary situation in the Indian market as people continue to
experiment with new flavours and combinations. Admittance to intriguing and uncommon flavour blends are
gaining wide traction in the global market and this will provide an edge to Indians to excel and innovate.

RESEARCH METHODOLOGY
To understand the bread consumption as well as selling
pattern, we floated two google forms dedicated to each cause
respectively. We floated the first form amongst our peers from
different age groups to understand demands and choices of
each class. The second form was circulated among local
Bakeries and Kirana stores to get insights on the purchase
behaviour of consumers. The survey had some important
questions like, “Do you have any issues with the bread you get
in store?” and “Which Bread brand do you deal in?” After going
through the responses, we performed data cleaning to remove
responses which seemed dishonest and unmindful. We then
organized the data collected into different graphs and charts
and analysed the responses received to makes it easy to
understand.
 THROUGH CONSUMER ANALYSIS
STORE PREFERENCE
Analysis:

From the pie chart we have analysed that

majority of the bread consumers prefer
buying their breads from grocery stores
that contributes around 36.84% followed
by bakery 19.8% and local small Kirana
stores 12.8% of the total contribution
whereas supermarkets and online grocery
stores are the least preferred medium at
4.95% and 2.97% respectively, as grocery
stores, bakeries and local Kirana stores are
easily accessible but supermarkets are
generally located at a remote distance and
online grocery stores doesn’t fulfil consumer needs instantly.

Suggestions to the entrepreneur

 Distribution of the bakery products should be mainly focused on the grocery stores and other bakery
shops who are willing to outsource bread. This can be made possible by providing incentives to the
grocery store owners.
 Bakers should majorly focus on the quality as breads and other bakery products are perishable
goods and majority of consumers are brand loyal.

AGE AND TYPE OF BREAD THEY LOOK FOR AT STORES

Analysis:

We can observe from the analysis that

the most common bread type consumers
look in the stores are maida, malai and
multigrain bread. Maida with 4% of
records, Multigrain with 13.9% of records
and Malai Bread with 8.9% of records ,
among others affects the most in the
distribution. Even from the horizontal bar
graph we can analyse that young
consumers aged from upto 32 are
becoming more health conscious so they
prefer brown bread.

Suggestions to the entrepreneur:

 Main reason for the consumers not able to find their preferred bread is input cost. As these breads
are comparatively high in cost.
 Demand is not homogeneous, so shopkeepers do not find it profitable to keep these costly breads.
Bakery should arrange specialized on demand service and only supply these variety of breads when
 customers specifically demand. So that there will not be any unnecessary storage and shopkeeper won’t
incur higher expenses.

SIZE AND PRICE

Analysis:

From the graph, we understand that 35% of the sample population purchases large Bread packet sizes by
paying approximately Rs. 35, 18% purchases Family size by paying Rs. 45 approximately, and about 33%
of the sample size purchases medium size by paying approximately Rs. 25. From this, we understand that
Family size, large size, and Medium-sized bread packets are most popular among the sample population
and the price range for the same is in the range of approx. Rs. 25 to Rs. 45.

Suggestions to the Entrepreneur:

 The ideal packet size that the

Entrepreneur should produce in his
bakery should be Large and
Medium initially.
 Once the company starts
gaining the Market share, it should
start producing Small and Family
sizes later on. We have picked up
the large and medium size because
their combined Market share is
approximately 52% in the sample
population that we are studying.
 From the analysis, we
understand that the pricing for the
Large size Bread packet should be
Rs. 33 and for the Medium size, it should be Rs. 23.This pricing would give the company an edge over its
competitors in the same size range. At the same time, it will also help the company to meet its cost and
fulfil market demands of large and medium size packets.

NO. OF BREAD CONSUMED IN A WEEK (NO. OF PACKETS)

Analysis:

Around 50% of the sample population

buys 1 packet of bread weekly, 30%
buys 2 packets of bread every week,
and around 10% buys 3 packets
weekly, and the remaining population
buys more than 3 packets weekly. We
understand that the buying pattern
for this sample population is around 2
packets of bread per family on an
average per week. Now considering a
population of 10 lacs in a tier 2 city
 and assuming that 1 family consists of 4 members. Total no. of families in this city is coming around 2.5
lacs. And for the same no. of families, the total demand of families weekly would be 5 lacs. With size of
the packet falling between family to small size packets. While the price range falls between Rs. 15 to Rs.
45.

Suggestions to the entrepreneur:

 The demand is that of 5 lacs on an average per week as per the assumed data, and out of this 50%,
which is around 2.5 lacs, bread packets are medium and large. The entrepreneur should start with a 20%
Market share target in the first 1 month of the 2.5 bread packet market per week.
 Once the entrepreneur has captured this percent of the market share, he should target 40%, and
within a year, he should be able to capture 60% of this market share. This can be achieved by proper
distribution channel, quality, and comparatively better price range. To attract customers, the
entrepreneur can also try a unique bread packaging style.

REASONS FOR CONSUMER DISCONTENTMENT

Analysis

Through the survey conducted

among the bread consumers we
have found from the derived
chart, that there are certain
reasons for the dissatisfaction
among the bread buyers. This
subset of consumers is mostly
found among the people who
prefer buying breads from the
Local Kirana shops and grocery
stores and there were certain
problems that were stated by the
consumers and they were related to:

Quality Shortage Lack of Variety

1. Damage during 1. Improper channel 1. Lack of awareness among the
transportation 2. Problem at supplier’s consumers regarding the bread
2. Product expiration side varieties.
3. Foul smell and 3. Incapability in 2. Location is also a concern as shops
development of matching consumer in tier-2 or tier-3 cities can not
fungus demand based on avail all these varieties due to
4. Excessive sugar preference logistics and accessibility issue.
content

THROUGH SHOPKEEPER ANALYSIS

Product Specifications
Analysis:
 From the pie chart we understand that maximum costumers when they make a purchase of bread, they
look for the quality, brand along with softness and expiration date.

Suggestions to the entrepreneur:

 The entrepreneur should

ensure that the quality of bread
should that be of the highest
market standards at every given
point of time. This will be in turn
help him create a brand image for
his bakery.
 The distribution channel and
number of units produced should
be such that the bread is soft and
well within the expiry period. The
number of units produced should be
in alignment with number of breads consumed in a week.

MARKET TRENDS
Analysis:

From the responses of the

shopkeepers, we have a clear
understanding that there has been
a slight increase or no change in
the number of bread buyers in this
pandemic scenario. We also see
from the responses that, there is a
significant increase in the number
of buyers if the shop is located
near an institution with youth as
its majority population and when
the shop is centrally located.

Suggestions to the entrepreneur:

 He should have a presence of his brand in the grocery shops which are centrally located and in
locations where there are institutions vis a vis there are youths in
 He should manufacture more units in weekends in comparison to normal weekdays as it is evident
from the responses that there is a slight increase in purchases of bread during the pandemic.

CREATING MARKET SHARE

Analysis:

One of the biggest challenges that the entrepreneur

will face is creating market share for his brand because
of the existing players and customer loyalty.

Suggestions to the entrepreneur:

 Incentivising the shopkeeper so that he can

give a word of mouth in order to influence a
customer’s purchase
 Unique packaging style so as to differentiate
 MARKETING SUGGESTIONS FOR AN ENTREPREUNER
 It would be quite hard to make profit in the bread business without having unique and high-quality
products. This should be the most important factor in the value proposition offered to customers.
 To improve profits, it is imperative to develop meaningful relationships with customers. It is important to
figure out who frequently visits the shop, get to know them better, and find out where their interest lie.
 Over the past few years, organic products have been gaining popularity and people have started to follow
healthier lifestyles. Considering the high demand for healthier stuffs, entrepreneurs should try to attract lovers
of health eating by introducing some of these stuffs in the menu. Entrepreneurs plying their business in a small
town will have a good chance to stand out from their competitors.
 Offer different portion by offering Small, Regular and Large sizes but shouldn’t be afraid to experiment if
entrepreneurs believe there’s demand for even more variety.
 It is imperative to have a grand opening and welcome customers to business. Advertising the grand
opening would create interest and ensure that customers know when the shop is opening. One great way to
get customers in the shop is to offer discounts and specials.
 Social media marketing is a great way to interact with customers, create buzz and advertise opening with
other events. Many people would look out for the shop’s website and social media accounts before deciding
whether they want visit. It is important to have a strong online presence.
 The entrepreneur should conduct market research to know about the preferences of the people.

 Business Plan:

o Decide on a theme for the launch.

o Develop a story and brand collaterals to be
shared with everyone.
o Involve influencers and invite them for a
launch dessert party.
o Run a few giveaways on your social media
profile.
o Partner with local musicians and pop-up
shop owners to plan a great week of activities .
o Host a baking workshop to give people Image Description: Major competition is from established players like
a behind-the-scenes view. Britannia, Modern and Harvest Gold who have been in the bakery
Do an Instagram/Facebook live during it. industry for quite some time. Local customers look for high quality
bread with nice taste and reasonable price. So, in order to open new
CONCLUSION: bakery an entrepreneur should diligently look into consumer
behaviour and try to differentiate its product to gain market share.
From the survey conducted we have found that
people have become more health conscious so,
they preference and taste has shifted towards brown and multigrain bread.

REFERENCE:
o https://limetray.com/blog/start-bakery-business-india
o CONSUMER RESPONSE:
https://docs.google.com/spreadsheets/d/1RsLpX3oOmy4Mwk_9fKNFaEUgQEzk7EMhi-
F0w7HAN6g/edit#gid=1416793118
o SHOPKEEPER RESPONSE:
https://docs.google.com/spreadsheets/d/1S4GR4pX18fhYEkImGtlBekxXduQ_dR1CrBPFm-F-O-
U/edit#gid=1382449302