Daikisoft Bakery

Business Plan
 Business Plan

Table of Contents
Executive Summary..........................................................................................................4

The Market Opportunity...............................................................................................4

Our Solution/Competitive Edge....................................................................................4

Financial Highlights........................................................................................................4

The Market Growth.......................................................................................................4

Business Overview...........................................................................................................4

Introduction................................................................................................................... 4

Brief Description............................................................................................................4

Use Of Proceeds............................................................................................................4

The Team........................................................................................................................ 4

Products And Services......................................................................................................4

Market Analysis Summary...............................................................................................5

Industrial Analysis..........................................................................................................5

Market Needs And Trends.............................................................................................5

Target Market Description............................................................................................6

Competitive Analysis......................................................................................................7

SWOT Analysis.................................................................................................................. 8

Strengths........................................................................................................................ 8

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Weaknesses...................................................................................................................8

Opportunities................................................................................................................. 8

Threats........................................................................................................................... 8

Financial Plan.................................................................................................................... 9

Income Statement.........................................................................................................9

Balance Sheet................................................................................................................9

Break Even Analysis.......................................................................................................9

Cash Flow Statement.....................................................................................................9

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EXECUTIVE SUMMARY
Purpose of the Plan: We have set the following objectives to be achieved through this
document:

 To show the demand for bakeries in the United Kingdom;

 To present the potential of our business to the potential investor(s)/lender(s); and
 To secure the funding of £75,000 to start and run the operations.

THE MARKET OPPORTUNITY

 The UK’s bakery industry has opened up untapped opportunities for the market
players. Consumers are increasingly opting for baked products that are low in
calories, and yet, are as tasty as their traditional counterparts.
 In addition, in bakery products, bread is bought by 99.8% of British households,
and the equivalent of nearly 11 million loaves are sold each day. Approximately,
average bread purchases are the equivalent of 60.3 loaves per person per year.
 Furthermore, among popular bakery items consumption, cookies rank first at 89
percent, followed by cakes at 79 percent, cupcakes 73 percent, muffins/scones 68
percent, and cinnamon rolls 65 percent.

Based on the above mentioned facts, there are immense opportunities of bread
production and distribution companies in the market to meet the raising demand and
changing preferences of consumers.

OUR SOLUTION/COMPETITIVE EDGE

We will run a bakery brand in the UK with the following competitive advantages:

 Being a one-stop-shop for a complete range of bakery items;

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 Offering excellent-looking, delicious, and healthy products;

 Using premium and fresh ingredients only;
 Charging reasonable prices; and
 Providing every customer with a service that leaves a lasting impression.

THE MARKET GROWTH

 The United Kingdom foodservice market is projected to register a CAGR of 3.02%

during 2021-2026.
 UK bread and bakery goods production industry is set to reach £8.70 billion by
2022, growing at a growth rate of 3.7%.
 Similarly, the market size of the bakery product retailing industry is £2.9bn and is
expected to increase 37.6% in 2022.
 The economic impact of the hospitality and foodservice industry in the UK will
eventually increase to £108bn by 2030.

https://www.mordorintelligence.com/industry-reports/united-kingdom-foodservice-market
https://www.ibisworld.com/united-kingdom/market-size/bread-bakery-goods-production/
https://www.ibisworld.com/united-kingdom/market-size/bakery-product-retailing/
https://pelicancommunications.co.uk/food/paradigm-shift-predicted-for-the-uk-hospitality-and-foodservice-
industry/

BUSINESS OVERVIEW

INTRODUCTION

Business (Legal) Name TBD (to be decided) LLC

Doing Business As TBD

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Country of United Kingdom

Incorporation
Year of Incorporation 2022
Legal Status Limited Liability Company
Total No. of Owners 1
Office/Bakery Address TBD
Open Hours TBD
Phone TBC (to be confirmed)
Email TBD
Website TBD

BRIEF DESCRIPTION

We will offer the following:

 Sandwiches
 Pastries
 Cakes
 Bread
 Cookies
 Other related products

USE OF PROCEEDS

PRODUCTS AND SERVICES

TBD is a new bakery brand based in the United Kingdom. The brand has planned to
open its first bakery in the country. The facility will attract B2B and B2C customers

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and offer them top-quality food and related items. These products will meet all the
baked items’ needs of consumers perfectly.

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MARKET ANALYSIS SUMMARY

INDUSTRIAL ANALYSIS

UK Bakery Industry

The UK retail bakery market is worth £3.9 billion and is a large sector of the UK food
industry. Total volume at present is approximately just under 4 billion units; the
equivalent of almost 11 million loaves and packs sold every single day. There are three
principal sectors that make up the UK baking industry. The larger (plant) baking
companies produce around 80% of bread sold in the UK. In-store bakeries (ISBs)
within supermarkets produce about 17% and high street retail (craft) bakers produce
the rest.

The bakery product retailing industry in the UK is the 53rd ranked wholesale and
retail trade industry by market size and the 242nd largest in the UK. The market size
of the bakery product retailing industry in the UK increased faster than the wholesale
and retail trade sector overall.

In common with other food markets, an increasing amount of bread is being sold for
consumption outside the home. In contrast to the UK, craft bakeries still dominate
the market in many European countries which means that exports of bread and
bakery products currently account for only a very small proportion of the total
market. However there is increased interest on the continent in importing fresh
sliced and wrapped bread from Britain, mainly for the growing sandwich market. A
number of UK plant bakers also export part-baked and frozen bakery products to
retailers and the foodservice industry in Europe and elsewhere.

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Rising Demand for Bakery Item Distributors

Downstream demand from supermarkets is a primary determinant of the bakery item
distribution segment’s success because many consumers purchase their bread and
bakery goods from these establishments. Demand from supermarkets is expected to
increase in 2021-22 as supermarkets continue to benefit from increased footfall
during the COVID-19 (coronavirus) pandemic. This presents an opportunity for
industry growth.

Market share of UK bread production by value and volume

% by value % by volume

Large Plant Bakers 75 85

In-Store Bakeries 20 12

High Street Bakers 5 3

Total 100 100

Market Segmentation

 Plant bakeries produce mainly wrapped bread on a large scale. Three quarters of
all the bread consumed in the UK is wrapped and sliced – for convenience, for
keeping qualities and value for money. Most (but not all) plant manufacturers
produce bread for sale under retailer labels including convenience stores and
major multiple retailers as well as their own branded breads.

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 Craft bakers bake bread and bakery products on their own premises and this
sector has been declining for many years, squeezed by competition both from
plant bakers and multiple retailers. Many craft bakers have now diversified into
catering and takeaway food, and some are now also supplying supermarkets with
craft-baked bread.
 Traditional Bread performance is flat, with shoppers instead looking for variety,
leading to strong growth in Specialty Bread. While volume is down in Rolls,
premiumization has driven value growth.
 Rolls continue to have the largest share in ISB, however this is down from 35.2%
last year. Specialty Bread, the best performing sector, is least reliant on ISB.
 Cakes represent the largest portion of total bakery sales at 24 percent, followed
by cookies 12 percent, breads/rolls 11 percent, cupcakes 8 percent,
sandwiches/wraps 6 percent, and yeast-raised donuts and beverages tied at 5
percent.

Market Share of Bread by Type

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70.1
84.7 86 88.4 91.1

29.9
15.3 14 11.6 8.9

Total Bread MG Traditional Ambient Morning plus snack Traditional rolls Speciality Bread
Bread bakery

ISB Pre-packed

Most poplar Bakery Products

7%
7%

8% 34%
Cakes
Cookies
Bread rools
11%
Cup Cakes
Sandwich/ Raps
Yeast Raise Donuts
15% 17% Beverages

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UK Bakery Products Production Market

Household expenditure on food and non-alcoholic beverages is a useful indicator of
how much money people have to spend on bread and bakery products. Although
bread is generally a household necessity, many of the industry's products are
discretionary, so consumers can forgo them when cutting their spending. Over 2021-
22, household expenditure on food and non-alcoholic beverages is forecasted to
increase, presenting an opportunity for industry operators.

 The market size of the bread and bakery goods production industry in the UK
increased faster than the manufacturing sector and the economy overall.
 The Bread & Bakery Goods Production industry in the UK is the 10th ranked
Manufacturing industry by market size and the 115th largest in the UK.
 The market size of the Bread & Bakery Goods Production industry in the UK has
grown 0.9% per year on average between 2016 and 2021.

Popularity of Bread
In the United Kingdom, bread is a staple food and routinely gets eaten in significant
quantities by a large part of the population. While it was even more relevant for
people's diets a decade ago, consumers still buy over half a kilogram of bread every
week.

The revenue of UK companies manufacturing bread, fresh pastry goods, and cake amounted
to over seven billion British pounds. Over 2,500 enterprises manufacture bread and fresh
baked goods in the country, a figure which has increased year-on-year.”

The most popular type of bread in Britain is still white bread, although its popularity
has suffered a bit in recent years due to the trend towards gluten free products.

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Brown or whole-meal bread was the second most popular type of bread in Britain.
Many forms of bread are consumed in Britain, however, sliced bread comes out on
top. Even taken together, bagels, baguettes, rolls, and croissants reach let Brits than
simple, sliced bread Over 25.6 million British consumers eat sliced bread and more
than half of them eat sliced bread every day.

Moreover, the bakery & cereals market in the UK is led by the bread & rolls category
in terms of both value and volume, while Cereal Bars are forecasted to register the
fastest growth among all categories. Hypermarkets & Supermarkets represent the
largest distribution channel for bakery & cereals in the country. Driven by hectic
lifestyles, Britons seek products aligned that are time-saving and convenient.
Furthermore, audacious consumers drive demand for novel and exciting variants of
bakery & cereal products.
Impact of COVID-19
There has been a definite impact of the coronavirus outbreak on the overall
foodservice business, with various segments being affected in varying degrees in the
United Kingdom. To address the lockdown hit to the industry, the UK government
implemented an initiative to help the restaurant industry, the Eat Out to Help Out
scheme, in August 2020, following the first COVID-19 lockdown. During the month of
August, diners in participating restaurants received a 50% discount on food items, up
to GBP 10, purchased in restaurants, pubs, and cafes. Such factors are likely to
change the market scenario in the coming years. In addition, the government's stay-
at-home orders in March and again in November increased demand for groceries,
including bread and other bakery goods. Industry operators have responded by
boosting production as demand has surged.

Sources
https://www.ukflourmillers.org/flourbreadconsumption

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https://www.ibisworld.com/united-kingdom/market-size/bread-bakery-goods-production/
https://www.fob.uk.com/about-the-bread-industry/
https://www.fob.uk.com/wp-content/uploads/2021/07/Bread-and-Morning-Goods-June-2021.pdf
https://www.ibisworld.com/united-kingdom/market-size/bakery-product-retailing/
https://www.mordorintelligence.com/industry-reports/united-kingdom-foodservice-market
https://www.ibisworld.com/united-kingdom/number-of-businesses/bakery-product-retailing/2945/
https://www.tastetomorrow.com/inspiration/uk-consumer-expectations-for-bakery-in-the-new-
normal/473/
https://www.statista.com/topics/7306/bread-and-bakery-products-in-the-uk/#dossierKeyfigures
https://www.marketresearchfuture.com/reports/artisan-bakery-market-3143

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MARKET NEEDS AND TRENDS

 Consumers are increasingly looking for food (bread) that bolsters their health and
immunity.
 In contrast to other countries surveyed so far, British consumers prefer packed
bakery products with 4 to 7 days shelf life.
 Price is among the top 3 priorities of Brits when it comes to purchase bakery
items.
 The importance of healthiness is growing, especially for breads, with consumers
increasingly looking for food that bolsters their health and immunity.
 Consumers want breads that deliver on taste, health and convenience without
breaking the bank.
 When purchasing bakery items, taste and freshness remain the most important
selection criteria for British consumers, confirming the results of the latest Taste
Tomorrow research.
 Using local and authentic ingredients has become a booming market trend in the
UK.
 Consumers prefer bakery providers that offer a large variety of bakery items.
 In response to changing trends, manufacturers have focused on reformulating
their current selections with healthier ingredients, experimenting with new flavor
combinations, and launching single-serving varieties with a broader appeal.
 Increased digitalization of food service is among the primary factors driving the
market, as consumers find it comfortable to book prior and make payments
online.
 More plant-based products are making their way to the shelves.
 Many bakery retailers are tend to offer a variety of breads including bran,
multigrain, plain, vegan, gluten free etc to cater the a large number of customers.

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TARGET MARKET DESCRIPTION

Target Market Segmentation

For Retail Sales:
Our target market includes individuals and tourists who consume bakery products.
For Wholesale Distribution:
Our target market includes supermarkets, grocery stores, coffee shops, restaurants
and bars.

Statistics of Potential Target Customers for Retail Sales

United Kingdom
Population 68,434,456
Median Age 40.5 Years
Median Household Income £29,900
Average Monthly Salary £5,920
Average Yearly Salary £71,000

Distribution of Total Weekly Gross Household Income, UK

£1000 or more 27%

£900-£999 5%

£800-£899 6%

£700-£799 7%

£600-£699 7%

£500-£599 9%

£400-£499 11%

£300-£399 11%

£200-£299 10%

£100-£199 5%

Less than £100 2%

0% 5% 10% 15% 20% 25% 30%

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Statistics of Tourists in UK

 The United Kingdom ranked seventh in the UNWTO international arrivals league
and accounted for 2.8% of global arrivals.
 The United Kingdom ranked fifth place in the UNWTO international tourism
earnings league.
 There were 37.9 million visits to the UK in 2018.
 Travelers from the US contribute most to the travel industry in the United
Kingdom. 3.9 million American tourists visited in 2018 and spent a collective £3.4
billion. The USA, France, and Germany were the top markets in terms of the
number of visits to the UK, accounting for 29% of visits in 2018.
 4 million people visited the UK in July 2019.

Consumption of Bakery Items in UK

 An average 378 million bagels consume each year in the UK.

 Over half a kilo of bread is consumed per person per week in UK households.
 About 151 grams of cakes, buns and pastries are consumed per person per week in
the UK households.
 Data from the latest National Diet and Nutrition Survey (NDNS), indicates that
white bread remains the most commonly consumed bread in the UK with 70-87%
of all consumers, across all age groups consuming it. Outside of that, 20-38% eat
wholemeal bread; 33-37% eat brown, granary and wheatgerm breads and 5-11%
consume other breads respectively.

Consumption of Bread in the UK

Each year 99 bread products are purchased per household. Men eat bread more
frequently than women: 44% of men eat bread twice a day compared with 25% of

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women. In 2020, an estimated 26.5 million people used packaged sliced bread in
Great Britain and 6.4 million people consumed Bagels.

No. of People Using Bread in Great Britain, by Bread Type (in 1,000)

Others 2028
2076

Packed Slice and 25648 26466

Bread

Bloomers & Loaves 8865 8532

Buns & Rolls 13256 13876

Bagels 5794 6441

2019 2020

Quantity of Bread Consumed Per Day in UK, By Age (In Grams)

57
52

44
42 42

26

17 16
14 15
12
10 9
8 8

1.5-3 years 4-10 years 11-18 years 19-64 years 65 years and over

White Bread Wholemeal Bread Brown,Granary, Wheatgerm Bread

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Spending on Bakery Items

 In 2018/19, an average of 1.18 British pounds (GBP) per person per week was spent
on bread.
 In 2020, over 373 million British pounds was spent by UK consumers on
sandwiches, rolls, and baguettes (SRB).
 Britain loves cake so much so that they spend over £1.3 billion on it each year.
 In 2018/19, an average of 78 pence per person per week was spent on cakes, buns
and pastries in the UK.

Average Expenditure per Person per Week on Bakery Products in UK (in Pence)

78
77

73

70

2015/16 2016/17 2017/18 2018/19

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Statistics of Customers for Wholesale Distribution

Leading Supermarkets in UK
Tesco had by far the highest number of stores in the United Kingdom, with a total of
2,653. This was almost double the amount of Sainbury's who had the second highest
number of stores open.
Number of stores of leading supermarkets in the United Kingdom (UK)

2,653

1,412

750 700 646

491
353
Tesco Sainsbury's Aldi Lidl Asda Morrisons Waitrose

Number of Stores

Statistics of Grocery Stores in UK

There were 87,141 grocery stores in the UK in 2020.

Statistics of Coffee Shops in UK

In 2019, there were 25,892 coffee shops in the UK, up from the previous year's total
of 25,486. Coffee shop outlets include branded coffee chains, independent operators
and non-specialists.

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Statistics of Restaurants in UK
 As of January 2022, there are 108,927 restaurants and cafes in the UK. This
includes all types of restaurants.
 In 2019 there were 88,130 businesses operating in the restaurant and mobile food
service industry in the UK.

Statistics of Bars in UK
The number of pubs operating in the UK was approximately 47,200 in 2019.

Sources
https://www.worldometers.info/world-population/uk-population/#:~:text=The%20median%20age%20in%20the%20United
%20Kingdom%20is%2040.5%20years
https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/
householddisposableincomeandinequality/financialyear2020
http://www.salaryexplorer.com/salary-survey.php?loc=228&loctype=1
https://www.statista.com/statistics/676083/distribution-by-total-weekly-gross-household-income-united-kingdom-uk/
https://www.condorferries.co.uk/uk-tourism-statistics#:~:text=UK%20INBOUND%20TOURISM%20STATISTICS&text=The
%20United%20Kingdom%20ranked%20seventh,the%20population%20of%20the%20UK.
https://fabflour.co.uk/fab-bread/facts-about-bread/
https://www.statista.com/statistics/301770/bread-usage-frequency-in-the-uk/
https://www.statista.com/statistics/284264/bread-weekly-uk-household-expenditure-per-person/
https://www.statista.com/statistics/301839/soup-usage-by-soup-type-in-the-uk/
https://www.dailymail.co.uk/femail/article-2120462/The-best-thing-sliced-bread-Brits-embrace-bagel-sales-soar.html
https://www.statista.com/statistics/284434/weekly-household-consumption-of-bread-in-the-united-kingdom-uk/
#:~:text=Weekly%20household%20consumption%20of%20bread,Kingdom%20(UK)%202006%2D2019&text=In%202018%2F19%2C
%20an%20average,per%20week%20in%20UK%20households.
https://www.statista.com/statistics/284464/weekly-uk-household-consumption-of-cakes-buns-and-pastries/
https://www.newfoodmagazine.com/news/111679/health-review-launched-to-reaffirm-beneficial-role-of-bread-in-uk-diet/
#:~:text=Data%20from%20a%20recent%20National,all%20age%20groups%2C%20consuming%20it.
https://www.statista.com/statistics/281823/market-value-of-sandwiches-and-baguettes-in-the-uk-from-2007/
https://www.finder.com/uk/save-money-baking-cakes
https://www.statista.com/statistics/284274/weekly-uk-household-expenditure-cakes-buns-and-pastries/#:~:text=In
%202018%2F19%2C%20an%20average,and%20pastries%20in%20the%20UK
https://www.statista.com/statistics/436553/quantity-bread-consumed-in-the-united-kingdom/

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https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Retail%20Foods_London_United
%20Kingdom_7-11-2019.pdf
https://www.statista.com/statistics/920074/number-of-stores-of-supermarkets-united-kingdom-uk/
https://www.statista.com/statistics/978010/coffee-shop-numbers-united-kingdom-uk/#:~:text=In%202019%2C%20there%20were
%2025%2C892,independent%20operators%20and%20non%2Dspecialists.
https://www.statista.com/statistics/298871/number-of-restaurants-in-the-united-kingdom/
https://www.foodhygienecompany.co.uk/blog/food-hygiene/how-many-restaurants-and-cafes-are-there-in-the-uk/#:~:text=As
%20of%2016%20January%202022,restaurant%2C%20for%20example%20staff%20canteens.
https://www.statista.com/topics/6222/pubs-in-the-united-kingdom-uk/

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COMPETITIVE ANALYSIS

Galeta Bakery The Free from Bakehouse De Baere

Introductio It is a wholesale bakery in It is an independent bakery. It is an award-winning

n the UK. bakery.
 Bread  Cakes, Cup Cakes  Bread
 Pastries  Brownies  Cookies
 Cakes  Bread  Breakfast Pastries
 Doughnuts  Loaf  Patisserie
Offerings  Cookies  Crackers  Cakes
 Muffins  Porridge  Cupcakes
 Cup Cakes  Patries  Doughnuts
 Snack Bars, Frozen,  Cookies  Macarons
Tarts  Gift Boxes  Scones and Muffins
 It has been named as  It has a small team of skilled  It offers extensive range
East London’s Baking bakers. including gluten free and
Heroes by The  With many years wholesale vegan products.
Independent. experience, it provides a fast  It is accredited by
Strengths  It has won multiple and reliable friendly service. “Coeliac UK”.
Great Taste Awards for  It offers gluten free, dairy  It has served London and
many of its creations. free and vegan choices. its surrounding areas for
 It uses 100% natural over twenty years.
ingredients.
Social
Media High Moderate Moderate
Focus
Google
4.8* 4.2* 4.4*
Rating

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www.thefreefrombakehouse.co
Website www.galeta.co.uk www.debaere.co.uk
m

SWOT ANALYSIS

STRENGTHS

 We have a passionate and dedicated business owner.

 We will always maintain an unmatched level of customer support.

WEAKNESSES

 Lack of funds to start and run the business operations.

 Need to deploy multiple marketing strategies to create solid awareness of our
bakery brand.

OPPORTUNITIES

 Increasing health awareness has also encouraged the introduction of a number of

new products, including wholegrain, seeded and functional varieties. Health
consciousness is anticipated to have risen in 2022, presenting an opportunity to
industry operators.
 Rising demand for quality bakery products.
 Growing consumer spending on discretionary items urges them to spend on
celebrations that creates demand for hi-end cakes and pastries.
 Increasing consumption of bakery items in the UK

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THREATS

 The United Kingdom foodservice market is highly competitive, owing to the

number of small and giant players dominating the market.
 The market has low barriers to entry.

FINANCIAL PLAN

INCOME STATEMENT

BALANCE SHEET

BREAK EVEN ANALYSIS

CASH FLOW STATEMENT

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