The Indian bakery and snack market is a combination of western baked goods and traditional items. Indians are very inquisitive people, but they have a deep culture of consumption of ethnic snacks during fiestas and tea breaks. Since India is a country of diversity, the snacks vary not only with the festivals but also with the geographies. The choice and preference of not only snacks but all foods differ from state to state and region to region. But at the same time, they can’t do without bakery items, and with inset western artisanal bakery items and snacks, they are spoilt for choice.
In this article “Beverage and Food Times,” we explore the amalgamation of bakery products into ethnic snacks as both segments share a common consumer.
The introduction to bakery and ethnic snack
Indians by and large prefer sweet, savoury, and spicy flavours and even blends like sweet and spicy, sweet and salty, etc. Most of the bakery products are consumed as evening snacks. Sweet foods like biscuits, sweet buns, and cream rolls, as well as savoury foods like crackers, puffs, and rusks, are snacked on along with milk and tea. Indian urbanites often buy cakes to celebrate birthdays, anniversaries, and other occasions. Millennials frequently visit cafés that serve sweet bakery foods like doughnuts, cookies, and pastry delicacies. Consumers’ favourite spicy snacks like vada-pav and kacchi dabeli are typically served with slider buns (pav) as a base.
Biscuits are the largest consumer product segment in India, worth USD4.9 billion. Other popular items among consumers would be savoury foods like rusks, kharis (puffs), and crackers. Sweet bakery products like cakes, cookies, and muffins are available in cake shops, retail stores, and cafés. Pastries, doughnuts, sliced breads, and burger buns also sell well in urban areas. Slider buns have a sizable market in India, followed by sweet buns, Nankhatai, and cream rolls. Traditional savoury foods like litti (popular in Bihar, Jharkhand, and Uttar Pradesh), baati (popular in Rajasthan, Gujarat, and Madhya Pradesh), and baked pithas (popular in the eastern and north-eastern states of India) are sold at food outlets and under local brands.
Biscuits, rusks, and puffs are the top three traditional Indian bakery items. Rising concerns for health drove the bakery market to come up with innovative products like what bread, multi-grain/all-grain bread, semolina rusk, multi-grain rusk, herb-flavoured rusk, brown khari, diet wheat khari, oat biscuits, ragi biscuits, millet biscuits, digestive biscuits, whole wheat nankhatais, etc. An innovative approach towards consumer safety has been established by several Indian manufacturers by adopting accurate labelling practises, thereby informing the Indian consumer regarding nutrition, ingredients, allergens, and claims.
Recently, however, there has been a noticeable addition of a different kind of bakery—the artisanal bakery. By definition, these are bakeries that produce handcrafted baked goods in small batches, largely using natural ingredients, without the addition of chemicals or preservatives. India’s fast-changing landscape of the kind of food it consumes has led these homegrown bakeries to introduce novel flavours and techniques—a far cry from our everyday white bread and sweet buns.
A curious local population and some scrumptious, trustworthy baked goods are clearly a match made in heaven. While artisanal bakeries do have a growing market in metropolises across India, their unprecedented expansion into smaller towns and cities is a slightly surprising yet welcome sight.
In India, the bakery industry is thriving. The year 2022 witnessed the Indian bakery market reach US$ 11.3 billion. Going further, it is expected to reach US$ 21.2 billion by 2028, with a growth rate (CAGR) of 10.8% during 2023–2028. This can be a result of consumers being drawn to convenient foods like bakery products due to their hectic lifestyles.
The bakery sector in India is going to see many trends coming up. Healthy bingeing, along with power flavours, is the one major change the industry is currently going through. For Indians to inspect the sector thoroughly, there is still a huge scope in the market, especially with this new major trend, as the diversity of India provides variety in both flavours and business skills that Indians possess.
But people who love to eat spicy food prefer to eat namkeen, or ethnic snacks, accompanied by a cup of coffee or tea. Namkeen is a pure Indian form of snack. When the matter zeroes in on legume snacks, Indian namkeen leads the way in flavour and variations. Namkeen is a broader term that symbolises salty snacks that all the cultures of India consume. Indian traditional snacks have had a long and elaborate history filled with vibrant spices and tasty flavours. India has been through flavorful adventures, resulting in the creation of new snacks like dry samosa, dry kachori, vegetable chips, flavouring makhanas, etc., and the recreation of many old ones such as murukku and papad using different flour bases, etc.
While processed Indian traditional snacks can be defined as snacks that are produced using the traditional formulation (flavours, ingredients) to match the traditional taste and traditional recipe and packed in such a way that the shelf life of the product is increased.
The Indian snack market is classified into organised and unorganised; currently, the unorganised sector is dominating with nearly 60% market share. The organised Indian savoury snack market was valued at nearly INR 41,000 crore in 2021 and is expected to reach INR 69000 crore in 2027 at a CAGR of nearly 7.3%. The savoury snack market is broadly classified into Indian traditional snacks and Western snacks. Both snack categories hold a good position in the market, and each contributes to nearly 50% of the total snack market.
The organised traditional snack market comprises Namkeen ethnics, Bhujia/sev, Dals, nuts, and mixes, and organised western snacks include chips, extruded snacks, nachos, and related products.
Snacks are typically designed to be portable, nutritious, and satisfying and are usually considered ‘in-between meals.” These snacks are a form of convenience food and are designed to be less perishable, tastier, and more portable than prepared foods. Western and processed Indian traditional snacks often contain substantial amounts of sweeteners, preservatives, and appealing ingredients like nuts and flavours.
An amalgamation of the bakery and snacks
Bakery products have been a part of human life for centuries. Products like bread are consumed around the world as a staple food. In ancient times, baked products were made from mixed seeds with barley as a dominant ingredient. However, when wheat flour showed a better response to fermentation, it gradually became the preferred cereal to make leavened bread using advanced techniques. The baking process involves cooking with dry heat in different types of ovens to get the perfect baked product that enchants all with its heavenly aroma.
The term “baked products” refers to products that are based on the use of wheat flour or meal derived from some other grain. They are mostly made using flour, milk, eggs, and butter as key ingredients. Baked goodness is available around the world in the form of bread, buns, rolls, cookies, croissants, pies, pastries, doughnuts, biscuits, brownies, crackers, cupcakes, and muffins, among others. Such products may be leavened by yeast (bread, sweet dough), chemicals (biscuits and doughnuts), or air (cakes).
Over the coming years, the bakery market is anticipated to keep expanding thanks to advancements in technology, product packaging, and the lifestyles of consumers. New flavours, textures, forms, sizes, and ingredients are being introduced by producers, and items that are sugar-free, vegan, and gluten-free are gaining popularity.
The growing popularity of bakeries is leading to a manifold increase in demand for raw material traders, equipment makers, food courts in malls, and franchise chain models, among others. The development of the global tourism and hospitality industries has spurred this demand further.
In this new world, consumers are more aware and knowledgeable. They are intelligent, they judge and form opinions quickly, and they are not shy of declaring their love or angst in person, socially, to a friend or family member, both offline and online! The average Indian today is more aware; he knows more about what should be in his or her diet and knows his or her proteins from the carbohydrates. They have a desire to eat healthy and to ensure that their family eats healthy too. Words such as “bake,” “baked,” and “bakery” are not new words in their dictionary.
How India has changed in the last 30 years has truly been remarkable. The population has exploded, as have the economy, income, food prices, individual preferences, and beliefs. Interestingly, most surveys identify the bakery segment as one of the biggest gainers from this change in lifestyle. Bakery is touted to be the fastest-growing food segment, expanding at a rate of 20–25% annually. Industry players put the size of the market at almost INR 1,000 crore in the organized HoReCa (hotels, restaurants, and catering) segment, and the size of the premium cookies market is projected to be approx. 1 billion USD now. A large share of the growth also comes from ethnic snacks, which are turning healthy, and instead of going for the frying process for products, they are using the flexibility of their business model to bake namkeens. There are many reasons contributing to the increasing popularity of the bakery industry alongside the snack industry in India.
After all, it’s baked, not fried
Even the most quintessential Indian snacks are getting a “baked” makeover. Be it the ubiquitous samosa, Gujiya, or mathri, they all have had their ‘much-anticipated’ baked makeover in a bid to reconnect with the modern consumer mindset. The new generation realises the difference between baked and fried foods. And it’s not just the young, the middle-aged, or even the old; everyone is looking to get fitter, lead healthier lives, and indulge too, but responsibly. More and more people are turning vegetarian nowadays; going vegan is trending, and the number of people demanding eggless and gluten-free products is on the rise.
The best example of the progressive consumer mindset is the nation’s march towards awakening to the benefits of superfoods such as quinoa, ragi, multigrain, and many more. Consumers want their old favourites to be healthier. They not only want their classic product but also want it with a twist. The consumers of today know that their fast-paced lifestyles lack proper nutrition, and thus there is an increase in the demand for fortified products. Even breads, biscuits, and other baked products now come packed with proteins and vitamins to increase their nutritional quality. More than ever, manufacturers and marketers have to be on their toes, keep in step with trends, innovate aggressively, and give consumers what they demand! Not just a cafe, but a cafe bakery
With a generation growing up on 4G, Google, and Netflix, today’s consumers have a new list of demands. Indian consumers are demanding more places to go out. This has given rise to the Café Bakery, a cafe with an all-day tag. Earlier, a café was restricted in its food offerings, but in its new avatar, whether it’s breakfast, lunch, dinner, tea-time, break-time, or let’s just relax time, all roads lead to a bakery café. As the world is waking up to the great Indian retail market, every brand, retailer channel, and product under the sun is trying to connect with the right audience. The result is a consumer set well-versed in products and food concepts from around the world and spoilt for choice with competitive pricing and lucrative offers. And there’s plenty out there to choose from! From tight pockets to deep pockets, there’s variety for everyone. This sort of variety can be seen in a typical Café Bakery menu with bits of Indian, Italian, Mexican, Continental, fast food, salads, and appetisers, as well as a buffet of beverages from classical cappuccino to modern Oreo shakes to tea, fresh juices, power drinks, and health drinks (and the list goes on). The mainstay, though, has always been the classical international nibble variety of croissants, patties, puffs, muffins, tarts, sandwiches, rolls, and others. The icing on the cake is the sweets’ indulgence options. From theme-based cakes to day-to-day cakes, pastries, cheesecakes, mousse, chocolates, frozen desserts, and much more! With so many mouthwatering food options, add a dash of great ambience, bits of fresh ideas, and energy, and you have the perfect place to relax, chill, unwind, and spend quality time with your loved ones.
The snack industry is ever-evolving
Consumer tastes and health preferences change constantly. Things are going to happen segment-wise now. For instance, there are different segments for healthy foods for young children aged zero to five, mothers, those undergoing extensive health training, and people with hypertension and diabetes.
The snack and namkeen industry have seen huge growth in recent times, with many new entrants and established brands vying for a share of the market. With changing lifestyles and increasing health consciousness, consumers are looking for healthier snack options that do not compromise taste. At the same time, they are also looking for innovative and unique flavours that can satisfy their taste buds. Consumers nowadays prefer products low in calories, fat, and sugar, while at the same time looking for convenient snacks that can be consumed on the go. As a result, there is a growing demand for single-serve and ready-to-eat snacks.
Moreover, consumers are constantly looking for unique and homely flavours, and a growing trend has been observed for ethnic flavours in the snack and namkeen industries. Also, there seems to be a focus on reducing the oil content of the snacks wherever possible. The major demand is coming from traditional Indian namkeen. The baked extruded snacks category also seems to be growing, with a focus on low-bulk-density products.
Ethnic snacks have become increasingly popular due to their easy availability, convenience, and affordability, making them an attractive option for people who want a quick snack. The major factors boosting the growth of the snack industry are convenience, health consciousness, and affordability. Convenience has been key to the industry’s success as more people seek quick and easy snacks. Health consciousness is another factor as consumers become increasingly aware of the nutritional value of snacks and their impact on health. Affordability is also important, with more people looking for snacks that are not too expensive yet satisfying.
Entering the small towns
The small towns are ready for a big change, and it’s a win-win for everyone. Widespread general awareness, digital and mobile connectivity, education, professionalism, and other significant advancements have helped small towns slowly but steadily make their way up. Needless to say, Delhi, Mumbai, Bengaluru, Kochi, Chennai, and Hyderabad are still the biggest markets, but the smaller cities are where the real growth potential lies. Surveys over the years tell us that smaller towns are aspiring for more. Today, the sales growth of cheese, bathing gel, and air fresheners is on the rise, especially in the smaller towns. The truth of the matter is that smaller towns want to shop like the metros, and marketers are taking notice! Baked products are the most natural fit in such an environment. A place that offers new products with attributes such as health, baking, and healthier choices will surely be a winner!
At the same time, Tier-III cities were always in favour of traditional snacks, but in recent years, the taste preferences of Tier-II and Tier-I cities have evolved and are shifting towards processed Indian traditional snacks. Increasing demand for healthy snacks and exploring different traditional snacks, along with a greater emphasis on hygiene, are driving the traditional snacks market in India. The high economic development in India has resulted in changing preferences among Indian consumers. People have become more value-oriented than price-oriented.
Branded players in processed traditional snacks are capturing most of the regions in India and introducing various products. The shelf life of namkeens and ethnic snacks has been made longer because of easy pouch packaging; hence, they can be consumed while travelling and stored for a longer number of days. In the traditional snacks sector, namkeen mixtures and dals have a higher CAGR compared to bhujia and sev. Traditional snacks that are famous in particular regions have also been captured by the local key players, who have expanded the production so that the product can be enjoyed in all parts of India. The online selling of the snacks to different states, advertisements on social media, and introducing a snack famous in a particular area to other parts of the country through advertisements are encouraging people to try out hygienically packed snack products and are gaining much popularity.
Everyone can bake, and the pie is growing fast
Even the local mithai shops that once used to sell mithais and ethnic snacks today boast a whole range of baked items, and vice versa, you can see modern bakeries having a range of traditional snacks. This is happening because the consumers for both segments tend to be the same.
It’s all happening now as the new generation is very comfortable with international cuisines and flavours and patronises established brands as much as home-grown namkeens and snacks.
With the rise of bakery and snack segments that also depend on eating, gifting, and even hobbies, this is becoming an increasingly popular preference when it comes to the festive season (mainly from October to March) is the busiest for both industries; there is also a host of festivals, weddings, and corporate events that are all becoming bakery-snack products’ occasions. Around the year, birthdays, anniversaries, bachelor parties, fun parties, office parties, and the trend of Indians celebrating special or big moments of life are also fueling their demand throughout the year. And in the end, it’s a sweet story for everyone, from international brands to national bakeries to traditional snacks. There’s a share of the pie for everyone!
The end words
The development of global tourism and hospitality industries has spurred further demand. Today, trained professionals are getting high-paying jobs in India as well as abroad. India’s export of bakery products has also risen, which is helping the country’s economic growth. Increased demand has also helped the primary sector of the country, i.e., agriculture. Almost all bakery products are made from wheat and dairy products. Farming has become more commercial. Farmers grow the produce and sell it at competitive prices in national as well as international markets, bringing prosperity. Prosperity brings along better technology, equipment, and infrastructure, which, in turn, not only helps the baking industry but benefits the nation as a whole.
Moving ahead, both sectors will see a fair share of ‘made in India’ brands that will offer immense competition to the international favourites.
The market for home bakers will also grow enough to make their presence felt. Bakery products, outlets, and interactive spaces will become more accessible for the common man. The year-on-year growth and the big figures are indeed encouraging, but there is a flip side too. As the business and the industry grow, the challenges accruing from them will also grow at a faster pace. Admittedly, the Indian bakery industry is not 100% geared up—be it infrastructure, manpower management, or affordable technology—but it is definitely taking the right steps to get there.
Like many industries, retail bakeries will see rising costs in fuel, health care, and other expenditures, which will cut into their bottom line and increase the cost of doing business. However, there has been an uptick in the demand for categories such as value-added eggless and gluten-free baked goods. Driven by the evolving perception of bakery products in India and changing consumer preferences, I see exciting times ahead for Indian bakeries.
The snack industry is also facing some issues in terms of lack of storage infrastructure, low availability of raw materials for certain seasonal crops, and poor connectivity in certain rural areas with food processing units situated far away. This results in a lot of waste. There is an urgent need to incorporate the latest technologies in order to maintain the quality of produce and enable farmers to compete in the global market. When it comes to branded and traditional snack products, regional preferences also play a role.
The competition in the snack market is about to become fierce as we can expect a whole range of activities pertaining to innovations in products and tastes, consumer convenience, as well as the entry of new players over the years. The trick will lie in maintaining the good taste of the product regardless of the technological innovations. People don’t want healthy food at the expense of good taste.
Also, the trend of snacking came from the West; however, the Indian touch is a must and a constant in the available varieties. The manufacturers will have to find the right balance and cater to the rising demands.
Lastly, for snacks, the quality standards laid down by the Food Safety and Standards Authority of India (FSSAI) must be followed by the industry players. Different government policies that have been put together for the food processing sector, such as tax benefits, FDI, and export promotions, are applicable to the snack industry as well.