Rising loaves: India’s bakery industry goes beyond bread

Rising incomes, cloud kitchens drive bakeries’ rapid growth

With a projected market size of over USD 31 billion by 2033, India’s bakery industry is not just rising, it is reinventing itself. From indulgent gifting trends to health-focussed innovations, this boom is being powered by increased preference for premium products, growing disposable income, rise of cloud kitchens and e-commerce platforms.

Once limited to baking bread loaves, tea-time biscuits and the occasional cakes, India’s bakery industry has transformed into a vibrant, multi-billion-dollar sector. According to the IMARC Group, a market research firm, the market is expected to grow from USD 13.8 billion in 2024 to a massive USD 31.5 billion by 2033, at a CAGR of 9.12 pc.

From global café chains to solo home bakers on Instagram, the surge is being powered by a growing appetite for convenient, high-quality, and increasingly premium products.

“Post-Covid, people are eating more at home, ordering custom cakes online, and trying new-age bakes like sourdoughs and entremets. Even gifting patterns have changed, cookies and Korean bento cakes are replacing traditional mithai in many households,” Jahnvi Khanna, founder of Charlotte Cakes, a cloud kitchen service provider in Delhi for five years , tells Media India Group.

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The rise of e-commerce platforms and cloud kitchens, coupled with growing disposable incomes and Western culinary influence, has contributed significantly to the upward curve.

“There is a clear shift toward ready-to-eat, convenient foods, especially in urban households where both partners are working,” Muskan Zaveri, home baker and founder of Divine Delights in Mumbai, tells Media India Group.

The consumer craving: Customisation, aesthetics & health

Today’s bakery consumer is no longer just looking for a loaf of bread or a plain chocolate birthday cake. They want a beautifully piped, hand-painted, gluten-free mini cake, ideally, one that arrives in a pastel-themed dessert box just in time for a birthday brunch.

According to both Khanna and Zaveri, customisation and presentation are now at the heart of consumer demand.

“People want products that make them feel as if they were made just for them. Our bestsellers include floral cakes, theme-based gifting boxes, and festive specials like heart-shaped cakes for Valentine’s Day or Diwali cookie jars,” adds Khanna.

Meanwhile, health-conscious bakes, vegan, eggless, millet-based, or sugar-free, are also on the rise, especially among parents looking for safer treats for children.

“Freshness, quality, and dietary adaptability are top priorities,” adds Zaveri.

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Artisanal to Aspirational

With over 200 product launches in 2023 alone, many infused with oats, chia seeds and protein powders, the industry is clearly responding to a health-aware and trend-savvy consumer base. According to market researchers, this shift toward artisanal and functional bakery products is likely to become even more mainstream.

The baking industry is undergoing a dynamic transformation, shaped by several emerging trends. Fusion flavours are gaining popularity, with innovative combinations like masala croissants and cardamom cookies capturing the imagination of adventurous consumers.

Premiumisation is also on the rise, as customers show a growing willingness to spend more on gourmet-quality baked goods. Simultaneously, regional adaptations are making a strong comeback, with traditional ingredients such as jaggery and coarse grains like ragi being reintroduced into modern recipes.

Digitisation is another key trend, with bakers, both professional and home-based, embracing tools like POS systems, inventory management apps and social commerce platforms like WhatsApp and Instagram to streamline operations and reach customers.

Additionally, there is a noticeable gifting boom, where theme-based and occasion-driven bakery boxes are increasingly replacing traditional sweets during festivals like Rakhi and Diwali and even at weddings.

“In many households, mithai is being replaced by jars of biscotti or cake pops. It feels more modern and more personal,” adds Khanna.

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India’s global bite: Export surge & global appeal

India is already the second-largest biscuit producer globally, and its bread and rusk segments continue to expand rapidly, mainly for domestic consumption, with limited exports, primarily aimed at the Indian diaspora living overseas.

According to the Ministry of Commerce & Industry, Indian bakery exports grew from USD 346.7 million in 2019 to USD 557.6 million in 2024.

Sweet biscuits alone account for 60 pc of these exports, followed by rusks and wafers. The top destinations include the United States, the United Arab Emirates, the United Kingdom and Canada, all countries with over 2 million-strong Indian diaspora, each.

“Indian products, from glucose biscuits to rusks, have nostalgic value for many Non Resident Indian families. There is also demand for millet cookies and eggless cake premixes,” adds Zaveri.

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Crumbs of concern

But despite its rapid growth, the Indian bakery sector still faces several hurdles that could impact long-term sustainability. Key among them are supply chain constraints, high ingredient costs, and a lack of skilled labour.

“Prices of essentials like flour, chocolate, and butter keep fluctuating, which directly affects pricing and profit margins,” says Zaveri.

“There is also a shortage of trained staff, it is hard to find pastry chefs or bakers who understand artisanal baking techniques, especially outside metro cities,” adds Khanna.

Additionally, perishability and shelf-life issues make logistics a constant challenge, particularly for premium or cream-based products. For home bakers and smaller outfits, regulatory compliance, licensing, and platform commissions often create operational strain.

“The bakery business is still very unorganised. From raw material sourcing to navigating Food Safety Standards Authority of India (FSSAI) rules, there is a lack of structure and support, especially for small players who are trying to scale,” adds Khanna.

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A slice of the future: What lies ahead

But with continued urbanisation, expanding e-commerce, and an increasing focus on clean-label, health-forward products, the Indian bakery sector seems poised for continued growth. Yet, as it scales, the road ahead will depend heavily on innovation, skilled workforce development, and better regulatory frameworks.

There is also scope for public-private collaboration to support artisanal bakers through training, access to credit, and infrastructure.

“If there is better support shared kitchens, ingredient subsidies, cold storage hubs, it could help thousands of women-led micro businesses thrive,” adds Zaveri.

But as consumer tastes evolve from simple sponge cakes to gourmet, health-conscious, and visually stunning bakes, the industry seems ready to meet the moment.

“As long as there are birthdays, weddings, and celebrations, there will be cake,” adds Khanna with a smile. “Only now, it might be gluten-free, themed, and delivered straight to your door,” adds Khanna with a smile. And perhaps with a little extra frosting on the side.