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Cost Reduction Strategies for Bakeries

With economic slow down and low spending by consumer has forced big bakery manufacturer to implement cost reduction strategies in their plants and operations . Cost reduction programs should be ongoing program rather than Knee jerk program. One should continuous strive for innovation , modification or automation for savings in factory operations .


We can get substantial cost savings in following areas .

Procurement or purchase

Around 60 - 65% cost of product is raw material . Hence savings in raw material purchase can add on to profits.Main raw material s are flour , fat , sugar,Additives .Apart from raw material other materials are engineering items and packaging. Few of the ideas are

Bulk purchasing

Forward buying

Buying from sales tax,excise duty free area

E procurement

Reverse Auctions

Imports or sourcing from across the globe eg Palm oil ,Sugar ,flour etc



Logistics

Cost of transportation inbound and outbound are very high to have efficient logistics management definitely helps reducing cost. Few are listed below


Freight or transport management
Inventory management
Warehouse design and location
Type of transportation



Energy

Energy also contributes to cost of manufacturing hence to reduce cost of energy should be a priority for manufacturers . Few Ideas are mentioned below.

Get an Energy Audit done . Implement their suggestions
Fuel savings through energy efficient burners
Power energy savings through energy efficient motors
Install screw compressors
Alternate fuels -Sourcing cheaper fuel like CNG , LPG , RFO ,LDO etc
Heat recovery from ovens
FRP fans for cooling tower



Packaging
Packaging material also a major factor in cost of manufacturing hence selection of packaging material should be done with care . Few ideas are

Reducing or Modifying shape and size of product.
Reducing Packaging waste through thickness or gauge reduction .


Automation to increase productivity and reduce manpower
Automating bakery processes can result in substantial savings in cost .Areas where we can go autoamtion are
Raw material and finished product handling and storage.
Add Radio frequency dryer to increase the oven productivity .
Packaging processes can be automated from feeding to cartoning and palletizing .

Outsourcing
Few of the processes can be outsourced like
Biscuit Grinding
Sugar Grinding
Promotion packing




Cost Reduction Strategies

Bakery Equipment -Biscuit manufacturing


Biscuit manufacturing requires certain machinery and equipments for the process . These could be listed as per the different process.

Premixing Stage
Sifter
Sugar grinder
Biscuit grinder
Emulsifier
Bulk handling system for flour , sugar and fat
Bulk handling system for liquid

Mixing Stage
Mixer

Forming Stage
Dough Elevators
Laminators
Dough Distributors
Cutters or Moulders
Metal Detectors
Swivel Panner

Baking Stage
Ovens

Packaging Stage
Magnetic Stacker
Metal detectors
Packing machines
Printing machines
Taping machines

Other equipments are needed for material handling , Pneumatic applications and Food safety in Bakery : Details on bakerybazar.com


Popular Pizza Chain 's in India


Another bakery product which is fast becoming popular is Pizza . It is some what similar to our own chapatis , parantha , naan , tandoori roti and flavours or toppings like garlic ,mustard are now available as toppings on these pizza which makes pizza more acceptable to Indian palate.
With eating habit changing with times . Urbanisation , increase in purchasing power, working couples , western influence  all have contributed  in  making  pizza hot favorites for residents of  major metros  in India .Market is estimated to be worth Rs400- Rs 450 crores .

Popular pizza chains which are popular  are

Domino's Pizza
Pizza Hut
Nirulas
Pizza Corners
Macdonalds
Wimpys
Papa John
Pizza Pizza Express
Slice of Italy

Pizza King
Pizza Square
Chicago Pizza
Spaghetti Kitchen


Britannia see s Gulf expansion as platform for African Market


Britannia has been busy with restructuring its operations and marketing in Middle East after it bought two companies Strategic Food International Co , Dubai and Al Sallan Food Industries , Sohar Oman .from one of the well established groups Khimji Ramdas $ Co . Two major programs has been capacity enhancement with cost reduction and secondly brand building in Gulf . In respect of Cost reduction in manufacturing cost they moved their major operations to Oman from Dubai .

There has been total overhaul of NUTRO LOGO britannia has launched recently a revised logo with elegant look ( see pic )

Britannia aims to use Gulf markets as Springboard to African countries like Morocco , Ghana , Nigeria and South Africa .

Read Complete article on Khaleej Times

http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2009/June/business_June1060.xml&section=business

Britannia to dominate UAE market

Read Article on http://www.zawya.com/story.cfm/sidZAWYA20090628125006

Glaxo Smithkline Launches Junior Horlicks Biscuit

Manufacturer of Horlicks biscuit has decided to enter into toddler biscuit market with brand Junior Horlicks. Its a new segment for bakery market which is untapped . GSCH expects Rs 50 crore sale turnover from this segment


http://economictimes.indiatimes.com/News/News-By-Industry/Cons-Products/Food/GlaxoSmithKline-to-expand-its-Horlicks-brand/articleshow/4648307.cms

Daily Bread ties up with Franchise India for exploring more franchise options

Daily Bread a fully owned retail bread speciality manufacturer of Britannia industries based at Banglore has tied up with Franchise India Holding Ltd to expand its retail business to all across major cities of India.

Read Article
http://www.newdesignworld.com/press/story/14864

Surya foods puts up Wafer and Chocolate plant in Haridwar

Surya foods manufacturer of major biscuit brand like "'Priya Gold "" and Fruit Juice has plan to commission a Wafer and chocolate plant in Haridwar .With investment of $6.2 million and of 20 ton per day capacity.http://www.food-business-review.com/news/surya_food_plans_62m_investment_to_manufacture_confectionery_products_in_india_090623

Read Article on

Harvest Gold -Success story retold

It  all began  1993  In capital  city  of  Delhi  . A brand  called  Harvest Gold  was created  with  objective  to provide  quality  bread  to  consumers . Earlier  we had monopoly of two bread manufacturers  Britannia  and Modern . Demand was high  and  supply  short   hence  what ever was produced was bought without  any choice .Bread  where  sold in wax  papers .People used  to  stand in line for hours  for  delivery vans to get  their loaves  such was the  dominance  of  Britannia  and Modern  breads.Other  competitors  like Bakeman  and Tazza Bread  were non -existent .

The team of  Adil  Hassan  and Taab Siddiqui   then  commissioned  their plant at Bhiwadi  in Year 1993  with  the name  of  Harvest gold foods  India pvt ltd. The product  was instant  hit . This was a case  where  a local player  has  taken on  Big brand  and  was leader  in the market  within span of one - two  year of  launch .


What  differentiated  Harvest  gold from other  brands  was

1. Quality  of Bread  : All varieties  from 400gm  to 800gm pack  had uniform ,well sliced  bread neatly packed in  transparent packaging .With  new baking  technology  they  produced  better and uniformed  baked breads .


2. Packaging : Harvest  gold  pioneered   transparent  packaging  where consumer can  have a look  on product quality  without  opening  the pack . Where as  competitors where  using wax paper  for packaging .

3.  Advertising : Harvest  gold  experimented with English plus punjabi  slang for  its  advertising  which made  connection with  common man .

4. Transportation  and Distribution channels  where  such that  bread  where  delivered  on time and without much damage to product . Plastic trays where introduced  to carry breads instead of  metallic  crates .

Who says  that you cannot beat  the  big players  . Harvest  gold has shown the world  that  it can be done . Today  they  cater  for  65% of  NCR  market .


HO Address:

Company Name : Harvest Gold Foods India Pvt Ltd


Address : RZ- 167/1, Road No. 4, Block-A, Mahipalpur Ext.

Level of Office : Head Office

Phone No : (11) 26784573 26784572

Biscuit brands in rural Bihar

Blog post for this months has been low as I was on vacations attending relatives marriage at my native village in Rohtas ,Bikramganj ,Bihar ( eastern region of India). But for my curiosity I did a small survey of bakery products available in retail shops in that rural area .Following has been my observations .

Branded biscuits like Britannia and Parle are of old stock more than 6-7 months .
Companies are not interested in taking back outdated stocks.
Local brands are doing good business.
Local brands are fresh compared to national brands
Major local brands are BISKFARM , BHAGWATI , SABISCO

Local brands can take on national brands if they do their packaging and marketing /pricing aggressively .
"Each brand of bakery product has its own storyand history behind them to tell .Bakerybazar intends to discover and unravel these stories before you""



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