You are here: Home » Companies » News
Business Standard

Piece of cake: Pandemic sweetens cake sub-segment, attracts bigwigs

Major food segment players have entered the niche category recently

retail food sector | Cadbury | ITC

IANS  |  New Delhi 

Piece of cake: Pandemic sweetens cake sub-segment, attracts bigwigs
ITC Sunfeast forayed into the cake segment in 2018

Pandemic-induced acceleration in consumption of bakery items has attracted food majors to venture into the "sweet and convenient" sub-category of packaged cake segment.

At present, the industry estimates the sub-segment's revenue generation capacity of over Rs 2,500 crore per annum.

In the recent past, major food segment players such as Mondelez-owned Cadbury, Sunfeast, and others have entered into this niche category.

Accordingly, market observers cited food safety, in-house consumption and differentiated product offerings as the prime factors for the over 20 per cent annum revenue growth of the sub-segment.

"The current pandemic has led to some profound shifts in buying patterns and consumer preferences," said Madhur Singhal, Practice Leader - Consumer and Retail, Praxis Global Alliance.

"Cakes also produce a higher price realisation per unit of raw material consumed. Therefore, it is not surprising that packaged food brands are looking at doubling down on this product category," he added.

A case in point is the Sunfeast, which had forayed into the cake segment in 2018.

"Within two years after leading category growth in the layered cakes segment, with a 22 per cent market share, Sunfeast decided to expand its cakes portfolio and consolidate it under a new sub-brand 'Sunfeast Caker', which we have just launched," said Ali Harris Shere, Chief Operating Officer, Biscuits & Cakes Cluster, Foods Division,

"The cake category in India has been growing at a very promising pace. Given that it is a large category, and with our experienced play in the biscuits segment, we believe it is the right time to expand our foothold in the segment."

According to Pinakiranjan Mishra, Partner and National Leader, Consumer Products and Retail, EY India: "The bakery industry in India is driven by changing customer preferences and lifestyles. There is higher demand for healthier products and alternatives post Covid-19 as bakery products are now frequently consumed daily as compared with being a treat."

"The outlook for the Indian bakery industry seems quite optimistic, with the projected market value likely to surpass $12 billion by 2024, growing at a CAGR of 9.3 per cent between 2019 and 2024."

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, November 20 2020. 12:50 IST