OtherPapers.com - Other Term Papers and Free Essays

Confectionary Industry - Food Market and Consumers' Behavior

Essay by   •  September 25, 2011  •  Case Study  •  1,616 Words (7 Pages)  •  1,771 Views

Essay Preview: Confectionary Industry - Food Market and Consumers' Behavior

Report this essay
Page 1 of 7

Food Market and Consumers' behavior:

Bangladesh has strong growing food processing sector, which heavily relies on domestic agricultural production and mainly focuses on serving domestic demands. Roughly 45 percent of household consumption expenditures in urban areas is on food and beverage items, mostly for basic food necessities like grains (90 percent of which is rice),pulses, vegetables, vegetable oils, salt, fish, meat, and sugar. In rural area, strong preference goes for buying fresh food (generally daily), and wholly cooking it at home rather than using processed food. However, with urbanization, decreasing family sizes, and the spread of education and employment among women, a major change in food habits among the educated middle-to upper-class population has become evident. They are increasingly consuming processed food items like packed main food items such as rice, pulse, flour, snacks items such as biscuits, cake, puffed rice, sauces/ketchup, jam, jelly, noodles/pasta/macaronis, soft drinks/fruit juice etc. And due to changed social behavior the change of food behavior has also taken place in rural area.

This easy access of processed food has increased the local production of processed foods since 1990's. Simultaneously, abundant availability of these food items imported from many countries including the United States, with no quantitative restrictions but at moderately high tariffs, also contributed to this change. The basis of a processed food market has been established. Supermarkets are gaining in popularity, as consumers attach more and more importance to appearance, ambience, comfort, and the availability of a vast range of products.

Market Structure

This market segment constitutes 95 percent of the retail sector in Bangladesh. Retailing of imported food items in this market is very limited, except those medium or low quality items that are brought in, sometime through illegal channels, from Bhutan, India, Myanmar, and Thailand. Fresh food items from all sources are available in this sector. Limited selection, lack or refrigeration, bargaining, early-morning to late-night hours, and no ambience characterize this market. This is the preferred market for about 60 percent of the urban population and most of the rural population, as it is considered the best source for the freshest food, especially vegetables, fish, meat, and fruits.

Demand of Beverage Item (drinks, carbonated drinks, juices, mineral water, tea etc.):

Demand for beverages remains high in summer and all market players target the summer to boost sales, as this season stays for quite a long time in Bangladesh. Each year's extended hot weather is the driver of growth in beverage sales as demand for drinks peaks at this time instead of availavility of local mouth watering fruits. Beverage sales increased by around 60 percent compared to last year. Among top 10 ad spenders for soft drinks, eight are local companies.

The annual soft drinks market size is close to Tk 1,000 crore.

Demand of Confectionary Item (Snacks, Jam & Jelly, Biscuits, Dairy Products, Confectionery):

Bakers Item:

The demand of bakers items remain static almost all the year round. Though the Confectionery and Bakers market has witnessed high price of its raw materials i.e suger, wheat, edible oil, it put no effect to the total demand of its items. Some market operators are of the opinion that a big gap in the demand for and, supply of products in the estimated Tk. 25 billion bakery market is also responsible for prices remaining high.

The demand gap also has led to increased import of biscuits from India, Malaysia, Indonesia and other Asian countries. Apart from this, the country's over 100 auto bread and biscuit manufacturers are also selling the bakery items at higher prices.


Processed Fruit Item:

The existing fruits and vegetables processing industries in the country mainly produce jam, jelly, and squash, ready to serve fruit drinks, ketchup and pickles. They produce food items mainly from mango, pineapple, orange and some other exotic fruit commodities. In some cases the products are prepared using only flavors and emulsions instead of original fruits. From the under- utilized groups, olive is processed into oil pickles and chutneys, bar and tamarind is processed into chutneys. The demand of these products remain steady almost all the year round.

Dairy Product:

But the demand of Dairy Products reaches its peak during the Eid as preparing milk made sweeten dishes are one of the main traditional food during Eids. The total milk market in Bangladesh is growing at 20 percent a year, according to industry sources. But instead, the existence of huge demand, the production is not increasing due to lack of milk. The shortage of milk is mitigated through the imports.

Demand of other Kitchen Items (Rice, Flattened & Puffed Rice, Mustard Oil, spice)

Spice Market:

Spices are a great opportunity market in Bangladesh. Since the weather condition of Bangladesh is not suitable for spice cultivation, the country is totally dependent on import of the items. Over 30% of spices consumed in Bangladesh are imported from India due to the shortage of supply within Bangladesh. Most farmers are familiar with and involved in the production of a multitude of spices. Among the many spices, chilli and turmeric



Download as:   txt (10.6 Kb)   pdf (134.6 Kb)   docx (13.5 Kb)  
Continue for 6 more pages »
Only available on OtherPapers.com