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The battle for the crescent has begun


Read the saga of the croissant warriors

Italian food conglomerate Bauli’s entry into India has set off a war for domination in the hitherto-untapped croissants segment, writes Manoj John.

International bakery products have been rocking the Indian market for quite some time. Baguettes, macaroons and tarts have fired up the imagination of the Indian consumer like nothing before. People have even started making their own bread at home much like the folks of the French villages. Now, the talk of the town is nothing but baked milk.

The Rs. 21,000-crore Indian bakery market is no doubt an unappeasable lure for multinational companies of all continents. Italian food company Bauli SpA is the latest to invade the dog-eat-dog world of Indian baked goods, where some of the world’s largest conglomerates are vying for hegemony.

The Verona-based company—which makes panettone, pandoro, dove and croissants—has committed 80 million euro in investment in India over the next five years. That amounts to a whopping Rs 650 crore for manufacturing croissants in a country where people are passionately tied to the diets of their forefathers such as paratha and curd in the North and idli and sambar in the South for their breakfast. Bauli—not to be daunted by the country’s
centuries-old eating habits—inaugurated its factory in Maharashtra’s Baramati to produce its Moonfils brand of croissants a month ago. The facility has capacity to produce 12,000 tonne of croissants, which can be scaled up to 17,000 tonne in a short time. Bauli Moonfils are ready-toeat croissants filled with rich filling. Bauli sells Moonfils in four flavours—chocolate, vanilla, strawberry and orange— and plans to expand it to eight more flavours.

The company is planning to make India an export hub to serve the Asia-Pacific region. The ambitious project inevitably has tough challenges ahead. Strong competition comes from Britannia Industries and Monginis, which have separate plans to dominate the packaged croissant market, which is still untapped in India.

As consumption pattern of packaged food is changing, people are more tending towards on-the-go-food, with croissants being one of them. Bauli is betting on the future potential of the baked goods market which analysts project to grow at 20 per cent at a compounded annual growth rate. Breakfast is a segment which will see an exponential growth rate.

Not long ago, Britannia also announced its entry into the breakfast market with croissant. The biscuit major is moving towards transforming itself into an all-foods company, and will launch its croissants by October this year. Monginis is already selling croissants, which can be just heated and consumed.

Bauli’s entry may redraw the market equations. The company has set up a manufacturing facility at Baramati in Maharashtra at an investment of 34 million euros. This is the company’s first fully-owned plant outside of Italy. The company, which has presence in over 70 countries, expects India to become its second biggest market after Italy in three years. Chief executive officer Stefano Zancan, who was in India for the inauguration of the factory, however, declined to give revenue expectation from here.

Top executives of Bauli Group, including executive vice-president Michele Bauli, flew down to Baramati to put everything in order last month. “Our factory came up in a record time of 14 months,” said Michele Bauli, who inaugurated the Indian facility.

Bauli entered India in 2009 through a joint venture with Dream Bake but later changed the arrangement to co-manufacturing and distribution in the Northeast and the Eastern regions.

Bauli has 200 products and 1,200 SKUs across the world. “The biscuit market is very saturated and we don’t want to be in that. We are planning to launch soft cakes next year. We will look at other products possibly in the savoury segment,” Zancan reasoned, terming India as an important market.

The company, which is targeting the tier I and II cities, will also be launching soft cakes and vegetarian products to reinforce its range of products in India for the domestic and exports markets.

The Indian facility will cater to exports to the southeast Asian market in the first phase and then other countries in the next phase. Exports are expected from the beginning of next year.

The Baramati factory employs 135 people and when fully operational, it will have more than 1,000 people. The company would look for acquisitions to  expand its base and product range in India.

The company’s Indian subsidiary, Bauli India Bakes & Sweets Pvt Ltd, is yet to come out with revenue guidance but the company said it hoped this market has potential to cross 100 million euro in a few years.

Besides this, Bauli has a manufacturing arrangement with Dream Bake Pvt Ltd of Kolkata which supplies its products for markets in West Bengal, Odisha and North Eastern states. In 2009, Bauli entered West Bengal. It started with the production of ready-to-eat, cream filled puff rolls. After receiving overwhelming response from East market, Bauli is now all set to enter rest of India with the entire range of soft fine puff rolls ‘Bauli Moonfils’.

Bauli recently launched its first ever TV commercial in India. The TVC has been crafted by Saatchi & Saatchi, a leading advertising firm. The TVC displays a sweet story around the crescent moon shape and the softness of Moonfils, and begins with a little boy who in his curiosity and naivety asks his mom where the moon disappears every morning.

The mother tries to put off the question by quickly answering that the moon actually goes to the next-door bakery. In the bakery, the baker lovingly creates and bakes Moonfils while the boy looks upon in amazement. Finally, the baker holds up a Moonfils and, behold, the boy finds the moon he was looking for!

Rohit Malkani, executive creative director, Saatchi & Saatchi, said, “For the film, we played on the unique shape of Moonfils and created a story around it. It’s been a great ride and a fabulous immersion for us all—from croissant tasting and baking to sourcing the perfect looking chef for the film.”

Raghav Ravichandar, marketing manager, Bauli India, said, “We are extremely excited about entering India. Our brief to Saatchi & Saatchi was for a campaign that would generate intrigue for Bauli Moonfils, and highlight the delicious offering Bauli has. This will be a 360-degree campaign led by TV, digital, outdoor, PR and retail communication.”

Michele Bauli has fond memories of his grandfather Ruggero Bauli from Verona, Italy, who in 1922 started a small pastry shop in Verona, Italy that soon grew popular. He says, “We literally grew up with the idea of baking and bakery products. It was kind of ingrained in us. I remember my grandfather made this special Italian Christmas cake, a speciality of the South, even when he lived in the North.”

“My grandfather witnessed the First World War and later migrated to Argentina for a few years. He had put all his bakery items in a ship because he was very poor. He returned to Europe many years later. I remember he was hard of hearing and very aggressive. I recall him breaking his little finger when he banged a table in a fit of anger,” he adds.

Michele pointed out the similarities between Italian and Indian cuisine. “The cultures, traditions, foods and, of course, breads are something both the countries are passionate about. I am hoping to experiment with an Indian ingredient and make a product, which I would like to take back to Italy. Indian flavours and the textures in its cuisine are amazing.”


‘Packaged croissant rakes up curiosity in customer’

Italian food company Bauli SpA is aiming to make India its second largest market for after its home country. But the company has to face a formidable challenge from the likes of Britannia and Monginis, which are well entrenched in the psyche of the consumer. When asked, Bauli was tight-lipped about what it has in store for India. Country head and director Veenesh Priyadarshi, in an emailed interview with Manoj John, divulged only as much that it was the country’s impressive economic growth and the young population that attracted the company to India.

Full text of the interview.

India is your only production facility outside Italy. Why did you choose India overrunning China and similar countries in South East Asia and Latin America?

India is among the fastest growing developing economies in the world, with a growth rate of 7.2 per cent, and a large population of youngsters and young parents who are accustomed to global cuisines. That is the reason we wanted to be in India.

Do you have any plan to manufacture products other than croissants in India?

Bauli has a portfolio of products which will be tailor-made for the Indian consumers. We will decide which are the best fits for the country and launch them. We could see new products coming in the bakery range in the future.

Do you think India is a matured market to adopt a Western item such as croissant for breakfast?

Absolutely! India, with over 65 per cent of its population being under 35 years of age, is a fantastic market for the Western range of bakery products that Bauli has. With global economies shrinking and digitisation becoming second nature to man, there is nothing now in terms of food or lifestyle which is just ‘Western.’ We aim to position our Moonfils brand as just not a breakfast snack, but an everyday and anytime snack.

How have the Indian consumers received your products?

The response has been very encouraging. Consumers are amazed at the softness of the product and the cream filling and can’t believe the product has a four-month shelf life. Being the first-of-its-kind in the Indian snacking space, there is a high degree of curiosity in our consumers upon seeing a packaged croissant. With a range in chocolate, orange, strawberry and vanilla, we have something for everyone. We have also just launched the same in vegetarian range as well to cater to specific geographies.

What is your marketing strategy for the Indian market?

Moonfils will be supported with a 360° launch marketing campaign primarily led by TV and digital media. We also have outdoor campaigns in select cities and BTL activation such as school sampling and retail sampling at stores. The sales team is also equipped with merchandising to help ensure high impact at the selling point.

Which are the regions in the country where your products are available? Please elaborate on your supply chain system.

Bauli Moonfils has been launched across India. We are still scaling up every day to get to tier II and III cities present largely in retail and modern format stores.

Baked products being traditional cuisine, do you have active R&D activities?

We have an R&D setup at our Baramati facility which helps us finetune the current product offerings and work on the future launches planned in India.