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Thursday, November 7, 2013

Functional Food based Bakery Products (Bread, Cookies and Biscuits)

Typically, a food marketed as functional contains added, technologically developed ingredients with a specific health benefit. Most early developments of functional food were those of fortified with vitamins and/or minerals such as vitamin C, vitamin E, folic acid, zinc, iron, and calcium. Subsequently, the focus shifted to foods fortified with various micronutrients such as omega-3 fatty acid, phytosterol, and soluble fiber to promote good health. Functional food products are not homogeneously scattered over all segments of the food and drink market and consumer health concerns and product preferences may vary between markets. These products have been mainly launched in the dairy, confectionery, soft-drinks, bakery and baby-food market.

Bread, baked goods and cereals are increasingly stepping into the functional food arena, with consumers increasing leaning towards more nutritious products even in the staple food categories. Bakery products can be biscuit, cookies and bread. These products can functional food after enrichment with nutrients, vitamins and proteins.

Raw Material Requirement


·         Wheat Flour

·         Multigrain Flour

·         Functional Flour

·         Leavening Agent

·         Water

·         Yeast

·         Salt

·         Bread Improvers

·         Shortenings/Fats

·         Flour Treatment Agents

·         Emulsifiers

·         Preservatives

·         Honey

·         Butter

·         Oats

·         Flavor for Cream


Preservatives and Storage

·         Leavening Agents

·         Fully Saturated Mono and Diglycerides

·         Cookie Storage

·         Whey-Based Ingredients


Benefits of Functional Food


·         Energy enhancement

·         Weight management

·         Bolster gut

·         Bone or heart health

·         Disease risk reduction

·         Memory improvement


Factors for Growth


Greater health awareness by consumers and the potential for premium pricing are helping to fuel growth in the functional food market. Sustaining this growth will hinge on manufacturers’ ability to focus on food qualities, market effectively, and target the appropriate segments, ideally aligning with the wider public and consumer health and wellness agenda.

Recently, a lot of bakers have entered into three dimensional cakes and theme cakes. Cutting off from the regularity, bakers are now looking at experimenting with many more ingredients like rice treats, and inculcating them into cake designs. Some bakers even make use of wooden planks for support. There is also something as sugar crystal sculptures; where they try and use them as per the theme of the cake. The biscuit category is expected to continue its growth trajectory of 15 per cent going ahead. Growth in bread would be relatively slower.

Market structure

Bakery industry in India today has an important place in the industrial map of the country. Bakery products are an item of mass consumption in view of its low price and high nutrient value. With rapid growth and changing eating habits of people, bakery products have gained popularity among masses. The sector, typically, constitutes cakes, breads and biscuits. About 1.3 million tonnes of the bakery products industry in India is in the organized sector out of 3 million tonnes, while the balance comprises of unorganized, small-scale local manufacturers.

Bakery and cereals account for almost 23% of the global functional food market with sales worth $5.5 bn between 2006 and 2010.The unorganized sector accounts for about half of the total biscuit production estimated at 1.5 million tonnes.  It also accounts for 85 per cent of the total bread production and around 90 per cent of the other bakery products estimated at 0.6 million tonnes. The last includes pastries, cakes, buns, rusks and others.

The Indian bakery sector consists of some of the large food categories like breads, biscuits, cakes etc. The branded packaged segment in this sector had a size of Rs. 17,000 crore in last financial year and is expected to grow at phenomenal rate of 13-15 per cent in the next 3-4 years. Within biscuits, 3-4 large-sized players viz. Britannia, Parle, ITC, Cadburys comprise about 75 per cent of the market. The breads and cakes market is much more fragmented with multiple regional and local players. International players like United Biscuits, Unibic have gained prominence in the last few years in their specific product segments.

The bakery industry has achieved third position in generating revenue among the processed food sector. The market size for the industry is pegged at US$ 4.7 billion in 2010 and is expected reach US$7.6 billion by 2015. It also mentions that the shining star of the sector remains the biscuits industry, which is expected to outperform the growth of the sector overall.

Britannia Industries Ltdis a leading player in the Indian organized biscuit market with nearly 30 per cent value share. The Nusli Wadia group, one of the oldest business houses in India and Groupe Danone, French multi-products food company, equally share the 48.5 per cent promoter holding in Britannia. Britannia achieved sales of Rs. 18.18 billion in the financial year.

Parle Agro Private Ltd is leading player in the fruit based beverages segment and the bottled water segment. Its flagship product is the fruit based drink Frooti Mango, which has 75 per cent market share. It is also present in the mineral water segment.

ITC is a listed company with British American Tobacco (BAT) holding 33 per cent stake and Institutions holding 50 per cent stake. ITC made its entry into the branded & packaged foods business in August 2001 with the launch of the Kitchens of India brand.

MTR Foods Ltd is an ISO 9002 and HACCP certified company is amongst the top five processed food manufacturers in India. They manufacture, market and export a wide range of packaged foods to global markets that include USA, UK, Australia, New Zealand, Malaysia, Singapore, UAE and Oman. The turnover is estimated at US$ 261 million (Rs12 billion), with the export market accounting for approximately 10 per cent of MTR’s total sales.

With the global market of functional food and beverages on track to reach $ 176.7 billion this year, this booming category now accounts for 5 % of the overall food market and is driving growth for the food industry as a whole, according to Euromoniter.

How Niir Project Consultancy Services (NPCS) can be helpful:-

NPCS can provide project consultancy services to any budding entrepreneur, who wants to get knowledge on Manufacturing of Functional Food based Bakery Products. Our Consultancy can provide the complete report covering topics like Plant Economics, Production Schedule, Land & Building, Site Development Expenses, and Working Capital Requirement etc.

NPCShelps in establishing business prospective in the Manufacturing of Functional Food based Bakery Products. Our detailed project report can be modified as per requirement of cost and capacity of the project. We have a state-of-the-art experience in preparing projects report on different subjects as per need.

Detailed project report contains:

·         Introduction

·         Properties

·         BIS (Bureau of Indian Standard) Specifications & Requirements

·         Uses & Applications

·         Present Indian Market Position

·         Expected Future Demand

·         Export & Import Statistics Data

·         Names and Addresses of Existing Units (Present Manufactures)

·         List of Plant & Machineries

·         Miscellaneous Items and Accessories

·         Instruments, Laboratory Equipments and Accessories

·         Electrification, Electric Load and Water

·         Maintenance, Suppliers/Manufacturers of Plant and Machineries

·         Process of Manufacture

·         Flow Sheet Diagram

·         List of Raw Materials

·         Availability of Raw Materials

·         Requirement of Staff & labour

·         Personnel Management

·         Skilled & Unskilled labour

·         Requirement of Land Area

·         Built up Area

·         Plant Layout.


Along with financial details as under:

•        Assumptions for Profitability workings

•        Plant Economics

•        Production Schedule

•        Land & Building

Factory Land & Building

Site Development Expenses


•        Plant & Machinery

Indigenous Machineries

Other Machineries (Miscellaneous, Laboratory etc.)


•        Other Fixed Assets

Furniture & Fixtures

Pre-operative and Preliminary Expenses

Technical Knowhow

Provision of Contingencies


•        Working Capital Requirement Per Month

Raw Material

Packing Material

Lab & ETP Chemical Cost

Consumable Store


•        Overheads Required Per Month and Per Annum

Utilities & Overheads (Power, Water and Fuel Expenses etc.)

Royalty and Other Charges

Selling and Distribution Expenses


•        Salary and Wages

•        Turnover Per Annum

•        Share Capital


Equity Capital

Preference Share Capital


•        Annexure 1          ::        Cost of Project and Means of Finance

•        Annexure 2          ::        Profitability and Net Cash Accruals


Expenses/Cost of Products/Services/Items

Gross Profit

Financial Charges    

Total Cost of Sales

Net Profit After Taxes

Net Cash Accruals


•        Annexure 3                    ::        Assessment of Working Capital requirements

Current Assets

Gross Working. Capital

Current Liabilities

Net Working Capital

Working Note for Calculation of Work-in-process


•        Annexure 4                    ::        Sources and Disposition of Funds

•        Annexure 5                    ::        Projected Balance Sheets

ROI (Average of Fixed Assets)

RONW (Average of Share Capital)

ROI (Average of Total Assets)


•        Annexure 6                    ::        Profitability ratios


Earnings Per Share (EPS)

Debt Equity Ratio


•        Annexure 7                    ::        Break-Even Analysis

Variable Cost & Expenses

Semi-Var./Semi-Fixed Exp.

Profit Volume Ratio (PVR)

Fixed Expenses / Cost 



•        Annexure 8 to 11 ::        Sensitivity Analysis-Price/Volume

Resultant N.P.B.T

Resultant D.S.C.R

Resultant PV Ratio

Resultant DER

Resultant ROI

Resultant BEP


•        Annexure 12        ::        Shareholding Pattern and Stake Status

Equity Capital

Preference Share Capital


•        Annexure 13        ::        Quantitative Details-Output/Sales/Stocks

Determined Capacity P.A of Products/Services

Achievable Efficiency/Yield % of Products/Services/Items 

Net Usable Load/Capacity of Products/Services/Items   

Expected Sales/ Revenue/ Income of Products/ Services/ Items   


•        Annexure 14        ::        Product wise domestic Sales Realization

•        Annexure 15        ::        Total Raw Material Cost

•        Annexure 16        ::        Raw Material Cost per unit

•        Annexure 17        ::        Total Lab & ETP Chemical Cost

•        Annexure 18        ::        Consumables, Store etc.,

•        Annexure 19        ::        Packing Material Cost

•        Annexure 20        ::        Packing Material Cost Per Unit

•        Annexure 21        ::        Employees Expenses

•        Annexure 22        ::        Fuel Expenses

•        Annexure 23        ::        Power/Electricity Expenses

•        Annexure 24        ::        Royalty & Other Charges

•        Annexure 25        ::        Repairs & Maintenance Exp.

•        Annexure 26        ::        Other Mfg. Expenses

•        Annexure 27        ::        Administration Expenses

•        Annexure 28        ::        Selling Expenses

•        Annexure 29        ::        Depreciation Charges – as per Books (Total)

•        Annexure 30        ::        Depreciation Charges – as per Books (P & M)

•        Annexure 31        ::        Depreciation Charges - As per IT Act WDV (Total)

•        Annexure 32        ::        Depreciation Charges - As per IT Act WDV (P & M)

•        Annexure 33        ::        Interest and Repayment - Term Loans

•        Annexure 34        ::        Tax on Profits

•        Annexure 35        ::        Projected Pay-Back Period And IRR


In order to get consultancy services for Manufacturing of Functional Food based Bakery Products, you may visit:   to know every bit of information regarding manufacturing and market structure of the Functional Food based Bakery Products.

Source: NPCS Team

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