Bakers Circle, the frozen dough and confectionery manufacturer based in New Delhi, is not just another bakery supplier. The company, founded by Dev Lall in 2001, has evolved from a retail bakery concept to a B2B powerhouse that serves brands across India, East Africa, and the Middle East. As the company scales, it is becoming what Lall describes as the “Walmart for the F&B brands,” offering a wide array of bakery and confectionery products to a diverse client base.
“We started as a retail concept, but quickly realized that deep pockets were necessary to scale in India. What we did master early on was the cold chain. That’s when we pivoted to a B2B model, becoming a manufacturing entity for these products,” says Lall, reflecting on the early days of Bakers Circle.
This shift has paid off. Today, Bakers Circle covers six product categories, including frozen dough, baked frozen breads, desserts, and even a savory line. “We offer about 84 SKUs and cover the whole spectrum. This has made us a giant for our customers, allowing them to rely on us for everything from one chocolate cake to a full muffin range,” explains Lall.
Rise of Outsourcing in India’s F&B Sector
Lall attributes much of the company’s growth to the outsourcing trend in India’s F&B sector, particularly with the rise of quick service restaurants (QSRs). “Hotels and restaurants used to do everything in-house, but with the advent of QSRs in India, outsourcing became the name of the game. We were early starters and pioneers in this space,” says Lall.
At one point, QSRs made up 95% of Bakers Circle’s business. However, as the QSR market in India plateaued, Bakers Circle diversified into exports and the Horeca segment. “QSRs now make up about 35-40% of our business, while exports account for 25-28%. We’ve become the new source for products like cheesecakes in the Middle East,” Lall notes.
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Market Dynamics and Competition
Despite the challenges in the domestic market, particularly with smaller players entering the scene, Bakers Circle continues to dominate the frozen dough and bakery segment in India. Lall estimates that Bakers Circle holds roughly 75-80% of the market share. “We’ve always been profitable, even through tough times like COVID. Last year, we grew 14%, and this year, we’re aiming for 21% revenue growth,” he shares.
One of the most exciting trends Lall sees is the growing sophistication of Indian consumers, particularly in Tier 1 and Tier 2 cities. “The younger generation has learned to decipher a crescent roll from a croissant and a Hivala cake from a real New York-style cheesecake. This is really exciting, and there’s no turning back on this,” says Lall.
However, the company faces seasonal challenges, such as the impact of religious festivals like Navratri, which can significantly affect sales. “When Navratras hit in September, it can wipe out your entire season. You effectively lose that period,” Lall remains optimistic this season and the sales to pick up post-Diwali till new year.
“Our growth this year is going to be about 21% in revenue, with our volume count up only 7-8%. In terms of profitability, we expect EBITDA to be in the low double digits, around 12-14%. The rest of the growth is driven by inflation and higher-value products being sold,” Lall explains.
Exports in The Middle East
While the domestic market presents its own set of challenges, Lall sees immense potential in the Middle East. “The Middle East has a consumption rate that is 2x of India. For every five or seven desserts I sell in India, I get the same rupee effect selling one dessert there,” Lall shares. He highlights that the region’s preference for premium products, such as fresh cream over non-dairy alternatives, is driving significant growth for Bakers Circle.
Looking ahead, Lall is optimistic about the company’s continued expansion into new markets and product categories. “We expect the Horeca segment to climb in the next year and a half, while exports, particularly to the Middle East and East Africa, will continue to buffer our growth,” he predicts.
Road Ahead
With revenue expected to hit INR 110 crore this year, Bakers Circle remains focused on its core strengths of providing high-quality, ready-to-use bakery and confectionery products to its clients, while also expanding into new markets and product categories.
“We’ve built a business that not only dominates the market but also adapts to the evolving needs of our customers. We’re excited about what the future holds,” Lall concludes.
