Political factors
The political factors affecting the bakery industry in India include government regulations and policies, taxes, and trade agreements. The government sets food safety and sanitation standards that bakeries must comply with. The industry may also be impacted by taxes and tariffs on imported ingredients and machinery, as well as trade agreements that affect the import and export of goods. The GST implemented by the government affects the prices of the final goods and also the cost of raw materials. Government’s FDI policies also impact the growth of the industry.
Economic factors
The bakery industry in India is a rapidly growing market, driven by factors such as increasing disposable incomes, urbanization, and changing consumer preferences. The industry is expected to benefit from the growing demand for convenience foods, as well as the increasing popularity of Western-style baked goods.
One major economic factor affecting the bakery industry in India is the cost of raw materials. Wheat and sugar, two of the main ingredients used in baking, are subject to price fluctuations due to weather conditions, government policies, and other factors.
Another important factor is the cost of labor, which is relatively high in India compared to other countries. This can make it more difficult for small and medium-sized enterprises to compete with larger companies.
The Indian bakery market is also highly competitive, with a large number of domestic and international players vying for market share. This can lead to price wars and other forms of competition that can affect the profitability of companies in the industry.
Overall, the Bakery industry in India is showing a positive trend as it is growing at a CAGR of 5% and is expected to reach INR 730 Billion by 2026.
Social factors
The bakery industry in India is affected by various social factors, including consumer preferences and tastes, cultural practices and beliefs, and economic factors such as income levels and purchasing power. Additionally, the rise of health consciousness and increased awareness of dietary restrictions and allergies has also had an impact on the industry. The growing trend of snacking has also increased the demand for convenience food products such as baked goods. These social factors can affect both the demand for and the types of products offered by the bakery industry in India.
Technology factors
The technology factors that are impacting the bakery industry in India include:
Automation of baking processes: Automation of baking processes such as dough mixing, shaping, and proofing is increasing efficiency and reducing labor costs.
Advancements in packaging and preservation: New packaging and preservation methods are allowing bakeries to increase the shelf life of their products and reduce food waste.
Use of temperature and humidity control systems: Temperature and humidity control systems are being used to ensure that the baking environment is optimal for producing high-quality products.
Use of advanced ingredients and formulations: Advanced ingredients and formulations are being used to improve the taste, texture, and nutritional value of bakery products.
Data analytics and traceability: Data analytics and traceability systems are being used to track and analyze production data, and ensure food safety and quality.
E-commerce and digital marketing: Bakeries in India are also using e-commerce platforms and digital marketing techniques to reach a wider customer base and increase sales.
Legal Factors
In India, the bakery industry is regulated by the Food Safety and Standards Authority of India (FSSAI). The FSSAI sets standards for food products, including those for bakeries, and enforces compliance through inspections and penalties for non-compliance. Additionally, bakeries must obtain licenses and permits to operate, such as a Food Business Operator (FBO) license. There may also be local regulations and zoning laws that bakeries must comply with. It is also important for bakeries to comply with labor laws and regulations regarding worker safety and health.
Environmental Factors
The bakery industry in India is affected by various environmental factors such as:
Climate: The baking process and the preservation of baked goods are affected by the temperature and humidity levels.
Water availability and quality: The availability and quality of water is crucial for the production of baked goods.
Energy costs: The cost of energy, particularly electricity, can have a significant impact on the overall cost of production.
Regulations: The industry is subject to various regulations related to food safety, sanitation, and environmental protection.
Competition: There is intense competition in the bakery industry, both from domestic and foreign players.
Market demand: The demand for baked goods can vary based on consumer preferences and economic conditions.
Food safety concerns: The industry must ensure that the baked goods produced are safe for consumption.
Pollution: The industry may also contribute to pollution through waste disposal and energy usage.
Packaging and waste management: The industry needs to manage the waste generated in the production process, particularly packaging materials
