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Confectionery Industry Essay

1116 words - 5 pages


Umer Rizwan
Umer Rizwan
Faiq Mehfooz
Faiq Mehfooz
Arsalan Waseem
Arsalan Waseem


Table of Contents

Confectionery is the art of making confections, which are food items that are rich in sugar and carbohydrates. In general, though, confectionery ...view middle of the document...

* Dilpasand
* United King
* Sohny Sweets
* Nirala Sweets,
* Ideal Bakers,
* Copper Kettle,
Our main focus in this report will be on the unorganized or generic sector and its product which includes Bakery biscuits, Nimco, sweets, potato chips and other products.
There are two prominent trade groups involved in this industry namely,
1. Pakistan Biscuit & Confectionery Manufacturers Association
2. Pakistan Food Association
According to Pakistan Biscuit & Confectionery Manufacturers Association, Pakistanis Bakery and Confectionary Industry has grown with an average annual rate of 6.5% to 7.5% during 2002-2010. The demand for products is subject to raw material prices and changing consumer trends. Driven by advertising initiatives, consumer preferences are continually changing in favor of new packaged products, chocolates and other snacks. Independent retailers and wholesalers are still the largest delivery channel to customers. Foreign or imported brands as well as large scale local confectionery companies are successfully targeting the lower segment of the market by introducing low end products between the price range of PKR 5 to PKR 25. The demand is still quite high for traditional occasions such as religious and weddings. Although considering rising inflation, economic instability and reduction in consumer purchasing power makes it increasingly difficult for the middle class to afford such products and thereby reducing consumption.
The supply of other food products (Bakers and Confectioners) is currently sufficient to fulfill customer needs but in such an industry opportunity, growth and higher sales are achieved through a demand pull generated by introducing new and innovative products, product substitution and varied packaging. The industry has grown rapidly over the last decade with numerous household brand names emerging on the scene and gaining success. However, challenges for future growth and new entrants are: increasing prices of raw material, high dependency on advertising and brand creation, excise and import duties on raw materials.

Major Raw materials required are,
* Flour
* Sugar
* Grains
* Eggs
* Dry fruits
* Wheat
* Oil, Ghee
* Milk
* Butter
* Vegetables
Most of the business owners rely on the same suppliers to meet their business needs, except for a few who place reliance on many suppliers or are not satisfied with their suppliers. Raw Material needs are met locally buying from the same location or same city, although the number of suppliers mostly comprises from two to five or even more, but predominantly the segment relies on same suppliers for their material needs.

At present, the Baker and Confectioners segment in Pakistan is part of the...

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