The Indian bread industry has come a long way since the 1990s. Bread has evolved from being perceived as a 
basic breakfast food item to being a confectionary item for some customers. Over the years, increasing disposable incomes, urbanization, and changing consumer preferences and lifestyles have given a boost to the bread industry.
The bread industry in India, valued at INR 33 billion (USD 0.51 billion) in FY 2015, has been growing at a CAGR of ~9% over the last three years. The industry is expected to grow at a CAGR of ~10% and reach INR 53 billion (USD 0.82 billion) by FY 2020. Despite Indians becoming more health conscious, white bread continues to dominate the market with a 75% market share. While demand for brown and nutritional breads is expected to grow, this segment currently accounts for a mere 20% of the total share.
India’s bread industry is dominated by unorganized players contributing to about 55% of the total market. However, their share is expected to decrease in the coming years, primarily due to increasing health awareness among consumers and their preferences shifting towards quality food products. In the organized sector, Britannia Industries and Modern Foods Industries are market leaders with nearly 45% share of the organized market.
According to Sujay Waghmare, a research analyst at ValueNotes, “Growing per capita disposable income and changing lifestyles are dictating a clear shift in customers’ buying patterns. They are aware of and prefer nutritional and premium bread compared to white bread. This change will drive India’s premium bread market. Manufacturers are now keen to tap the rising affluent urban population and are introducing premium and healthier variants in the market.”
The bread market is concentrated around tier I and larger tier II cities due to higher disposable incomes and more brand awareness among consumers. Companies are entering the market with concepts such as live bakery-cum-cafés to cater to today’s youth who are looking for a nice ambience and access to wifi, where they can relax and try new products. International players like Au Bon Pain and Le Pain Quotidien, and domestic chains such as Theobrama and La Opera are expanding from their current format to the sit-in café format. Now, players in the organized sector are increasing their focus on tier II and tier III cities as well, given the improving infrastructure and customers’ changing buying patterns in smaller cities.
