Speaking at the Food Ingredients India (FiIndia) exhibition in Mumbai on October 5, Ramesh Mago, president of the All India Bread Manufacturers Association, said that even as Indian consumption of bread has increased in line with the population, so have consumer expectations with regards to hygiene, quality, and safety.
To reach those expectations, bread makers have to use new technology and ingredients, most of which Indian regulations disallow, while others are not cost feasible, he said.
“In the last 15 years, the Indian government has not allowed the use of any new ingredients in bread products, even though they have been allowed for other bakery products like biscuits and cookies,” said Mago, who also heads Kitty Industries Pvt. Ltd.
Mago said that, barring bacterial amylase, no new ingredients have been allowed despite the industry’s repeated requests with India’s Prevention for Food Adulteration (PFA) programme, now the FSSAI (Food Safety and Standards Authority of India).
Cost pressures adding up
According to Mago, making better bread also means investing in new technology and skills, but current consumer price expectations do not permit bakers to do so.
“White bread retail prices have been hovering around 16 rupees [US$0.30] a loaf and have not moved for a while now. It is impossible for bakers to meet this price and increase production quantity and quality at the same time,” he said.
Amongst other pressures, Mago cited rising labour costs even as there is a distinct lack of trained manpower in the India bread bakery sector, adding “new labour laws also make it difficult to make sense of the costs.”
“If we were to go for automation, that would also mean heavy capital costs, which would mean that we would not be able to meet consumer expectations in terms of price,” said Mago.
Solace in brown bread
However, the safety and quality emphasis also means that consumers are more open to products that are healthier, P. Krishnakumar, senior general manager with Indian FMCG conglomerate Hindustan Unilever Ltd. said.
This has opened up the whole wheat and whole grain bread sector in the country, said Krishnakumar, especially for the former, which is more commonly known as ‘brown bread.’
“What we have found is that there is a growing segment of people ready to pay the extra buck for a healthier bread product. Brown bread sales in the country are rising, especially in the urban areas,” he added.
Krishnakumar revealed that whereas five years ago, brown bread accounted for 5% of the sandwich bread market, it currently accounts for around 12%, a substantial jump that has coincided with rising income levels in the country.
“For the bread makers, brown bread is a boon as they can get better margins with it as against white bread. Brown bread currently retails at an average of 24 rupees [US$0.49] a loaf in the country,” he said.