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

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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.

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

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 -owned , , 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 percent annum revenue growth of the sub-segment.

“The current pandemic has led to some profound shifts in buying patterns and consumer preferences,” said , Practice Leader – Consumer and Retail, .

“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 ITC 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 percent 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, ITC.

“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 , Partner and National Leader, Consumer Products and Retail, : “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 US$ 12 billion by 2024, growing at a CAGR of 9.3 percent between 2019 and 2024.”