INTRODUCTION

Bakery is a traditional activity and occupies an important place in food processing industry.
Despite the advent of fully automatic and semi-automatic bread as well as biscuit making plants,
a sizeable number of people still prefer fresh bread and other products from bakery.With
growing population and preference for fresh and ready-to-eat convenient food items, demand for
bakery products is steadily increasing.
There are many bakery products like bread and its different variants, biscuits, cakes & pastries,
cookies, puffs etc. having ready market round the year. Each product enjoys a very wide range in
terms of size or weight, flavours, end-use and so on. There is a tremendous scope to introduce
new varieties every year. However, this note deals only with bread and biscuits. This project can
be started anywhere in the country and there is no preferred location as such. This note considers
Meghalaya as the contemplated location in view of good market prospects.
A bakery can be set up in urban as well as rural areas. Depending upon its location, a suitable
product mix can be worked out. This profile primarily considers semi-urban location from where
nearby rural centres can also be catered to. In view of this consideration, thesuggested products
are bread and biscuits. These products are very well accepted in the market and have gained
consumer acceptance.

Industry and market information - The Bakery Industry

The Bakery Industry is a mature market and dependant on population growth and product
innovation with a focus on healthy options. Other key variables which may impact upon industry
growth and trends are consumer tastes and perceptions, competition, fluctuations in input costs,
packaging and technological advancements in manufacturing equipment. Export provides new
growth opportunities

Key success factors to the industry

These are internal factors that are within the control of the operator and should be observed in
order to be successful in the industry.

Supply chain management to maintain product quality

Contracts to guarantee raw materials at established prices to assist cost of supply and
production
Aim at two or more distinct consumer groups with different retail approaches and
products
Ability to pass on increasing input costs maintains profits
Cost advantages can be obtained due to expansion especially where price competition is
high

Key sensitivities of the industry

These are external factors which are beyond the direct control of the operator that influence each
company operating in the industry.
 High competition from similar products on the shelf
Fluctuations in domestic goods prices (primarily sugar and flour) contribute to the
higher/lower production costs and therefore impact the overall product cost.
The change in consumer taste affects demand
Retail demand affects end consumer demand

Basis of competition in the industry

These factors include internal competition between industry participants and external
competition from other related industries.

Competition stems from price, quantity, product differentiation and distribution networks
Competition also stem from bakeries and hot bread shops as they have successfully
catered to the consumers increasing need for quality and freshlybaked breads
Product perception conversely affects price and high-brand recognition and minor
techniques employed such as updating packaging and the introduction of functional
qualities e.g. bread enriched with fibre and vitamins has helped product differentiation
and stimulated consumer interest
Centralised distribution networks and systems has allowed quicker response to managing
stock levels

Barriers to entry of the industry

These are factors which can prevent a new company from entering the industry.

Initial substantial capital investment and the existence of major players are important
considerations
Wholesale bakeries need to establish relationships with retail outlets to affect sales
The bread loaf segment is hugely competitive and entrants may need to consider other
segments
Major players have aggressively promoted their products and entrants may need to carve
out market niches to be a considered player
Awareness of high quality baked goods is on the rise. Good bread is a rare combination of
nutrition, convenience, and luxury. Today's consumer has less time to create wholesome,
handmade bread, but increasingly appreciates the nutritional and sensory benefits it provides.
Good bread provides fiber and carbohydrates in a convenient, low fat form that is portable and
delicious. Good bread never goes out of style.
So, Starting up a new Bakery business will give rise to new avenue towards development as well
as growth to this sector for both rural & urban areas. Location like Meghalaya is mostly feasible
for planting up such kind of agro-business industries.