Baking entrepreneurship: a deep dive into the world of home bakers
Today there is no dearth of personalized items in the world. Only last week, Prime Minister Modi’s personalized clothes and President Obama’s customized car made headlines. Personalization or customization is the name of the game. Be it apps, trainers, vehicles, toys, bags, shoes or clothing. There is nothing that is not personalized. In this visibly customer centric world special moments of life can be crafted to create an unforgettable experience. Two of these special occasions are birthdays and weddings which revolve around the celebratory cake cutting. Though customized cakes are not new to India, over the past decade home bakers have been actively baking and crafting cakes.
In the past one year there has been a big boom in this industry; thanks to the internet the exposure has been rampant. Though veterans constitute a relatively smaller group, there is a large number of home bakers who have started baking customized cakes this past year and a half and are improving with every order. With Facebook groups like HBG (Home Bakers Guild) many of the beginners as well as experienced bakers have been brought together on a common platform.
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We randomly choose a few bakers with different levels of expertise to get a sense of the home baking community in India. Cakes are edible items; their design, ingredients used and expertise of the baker differ from each other. Based on our conversations with them, here are a few points that seem to impact or affect bakers across India.
Starting up requires investment. Though the initial investment required to get started as a home baker is minimal, expenditure is mostly on good quality hardware. The list includes - an oven, kitchen aid, some basic baking tools. These are items you keep adding to the kitchen as the business expands.
A home baker should have some basics of the chemistry of baking, and some idea of design and color which are easy to pick up from classes that baking institutes like Lavonne in Bangalore conduct. While there are multiple DIY videos on the internet, many home bakers conduct baking and décor classes over the week across India.
Logistics form an important part of any business. This applies to home bakers as well and the primary components are resources, payments, accounts and delivery. Most home bakers we spoke with are a one-person army. From being the designer, cleaner, accountant, sales and marketing person, they are responsible for it all. However, a very small percentage does shell out on hourly help. Yet others have family members to help and those who teach baking get their interns to chip in too.
The mode of payment is COD with some percentage as an advance (usually 50 per cent) taken via a bank transfer. Interestingly, none of the home bakers we spoke with have moved to mobile wallets or mobile pay options.
Delivery is another issue they face where logistics is concerned. Most of the bakers deliver the cake personally or have clients pick it up from their doorstep. Some have resorted to radio taxis for delivery. Some of them have tried other delivery services too but this seems to be a problem area. Those planning to startup any sort of delivery service could tap into this unexplored area.
This is one job profile where your work speaks for you. Both the presentation and taste matter, and if you happen to gain one satisfied customer, he or she leads to many more. A satisfied customer is essential; this is an industry that thrives on word of mouth marketing which, other than the internet, is the primary source of marketing. Facebook is the most popular among home bakers, closely followed by Instagram and Twitter. A few home bakers are also on Zomato, and some are listed on other lesser known food directories. WhatsApp and email are used extensively by home bakers to exchange design ideas and to close upon the final design for the cakes.
A small percentage does a little more marketing. Some bakers send out mailers to a client list that they have built over the years, others put up stalls in schools, apartments, flea markets etc to promote their bakes. Overall, the marketing may appear to be very rustic but it works.
Some of the well established home bakers are planning to take their business to the next level and have their websites up and running. Those with an IT background manage it themselves, others have learnt how to manage basic changes and updates on their own and still others have family members who handle the website for them.
The images of cakes that home bakers create are usually posted by them on popular social media channels or their FB pages. A large number of home bakers click the pictures themselves, some have taught themselves this art and others have family members who help.
Encouraging other businesses
The rise in home bakers is good news for many other players in the market who receive business from them. The sale of Kitchen Aid has been on the rise over the past few years in India, with more and more women buying this piece of machinery. The big players online like Amazon, e-Bay, Flipkart, Snapdeal and other smaller e-commerce players are receiving business from home bakers who need baking equipment-from oven to dishes to moulds.
For most home bakers, the local kirana and/or the online grocery sites are a good source for staple ingredients. Each city has its own standalone stores as well as those that provide baking equipment, specialized ingredients and raw materials. These include IBCA and Lavonne in Bangalore, Passionate Baking in Chennai, CCDS in Delhi. Others that were recommend are Foodhall stores, RJ Implex in Chickpet Chennai, Currimbhoys at Chennai, Arife Lmoulde at Mumbai, Butlers in Lajpat Nagar, Delhi and Vishal enterprises in Karol Bagh, Delhi.
There are many other specialised stores that sell the same online. For example, Cake Craft Shop based out of Delhi. Though delivery seems to be a problem, one of the home bakers shared that she uses Meru to get her cakes delivered. Many others have had bad experiences with cab services and other delivery companies.
The big question of ROI
Home bakers constitute a small and unorganized part of the larger baking industry. The home bakers pan India we spoke with said that on an average they take up around 4-6 orders per week, depending on design and size. There is no dearth of orders but the home bakers do like to limit how many bakes they do per week.
Since this is an unorganized sector, there is no competitive pricing. The bakers follow their own method of pricing based upon the ingredients they use, the design etc. On an average, a cake of about 3-5 kgs takes somewhere between 6-12 hours of effort which is usually spread across days. The experts and experienced home bakers take lesser time than the ones who are new to baking. This is not a one day task but is spread across a few days. Starting from discussion on the design, finalizing the design, execution of the design till delivery, it is a process that requires hard work and attention to detail. The more intricate the design the more you pay for the craft. In fact you would be surprised to know that there are trained professionals who are known as cake artists. Joonie Tan of Lavonne, a baking academy and patisserie in Bangalore, is known for her cake art and decor.
We got mixed responses on the question of ROI. A few home bakers refused to disclose or share the numbers. Some said after the initial investment in baking tools and hardware and good quality ingredients there is profit to be made and these are the ones clocking in the numbers. A few others shared they were breaking even and some were making minimal profits.
From mothers baking for their personal needs and local bakeries ruling the roost and catering to the masses this industry has been taken by the customization bug. The baton has been passed to women who are baking from the confines of their homes and baking not just cakes but cupcakes and even cookies that are customized to meet the client’s needs and demands. In fact, customized cupcakes are replacing traditional ‘mithai’ as gifts for festivals like Diwali. This is a competitive industry and those who got started earlier have the first mover’s advantage but there is place for many in this industry especially if you are looking to get started at a small level and limit your orders.