Founded way back in 1985 by the visionary Manjit Singh, Ludhiana-based Bonn Group of Industries today produces a variety of bakery products including breads, biscuits, cakes and cookies that are not only sold in India but in the international markets as well. Steena Joy explores how this small scale company became a pioneer in starting production of cookies on an industrial scale in India and how it is adapting to the health conscious millennial generation
In 1985 at Ludhiana, a small bakery entered the food market with a single traditional oven, consuming just five bags of flour per day. Soon it received recognition amongst the local distributors for its superior quality of breads and established a significant name in the local ‘mandis’ of Ludhiana and Punjab’s grass root level. Later, the company made a shift from the traditional oven to a rotary rack, and within two more years, the number of rotary racks had increased to three, consuming 80-90 bags of flour per day.
Reminiscing about those days, Manjit Singh, founder and CMD, Bonn Group of Industries says, “In 1985 when we started the bakery business, we had no master plan. The bread industry was small scale and there were just one or two players in Punjab. As we were already into bakery, we thought of growing in the same business. We set up a small factory with handmade machines and embarked on a 2000 breads per day plan supplying through local autos and cycles. Then we reached 10,000 breads every year and we added on and grew.”
From bread to biscuits
In 1987, the company installed one electric oven, the first in Punjab! In 1990 it purchased the plot in Ludhiana where the present facility stands. The semi-automatic plant became operational in 1994. From rolling out 50,000 breads per day per line, today the company produces five lakh breads and bakery per day. Every year a new line was added. But for ten years, it was only bread assembly lines. After successfully spending almost three decades in the manufacturing of breads, in the year 2004, Bonn Biscuits was launched, for which a fully automated online biscuit plant was started. In 2006 the group acquired a biscuit plant in Kapurthala. As bread capacity grew, the brand moved out of Punjab to other states. Covering the entire north India, the company today has a 60- 70 per cent market share in the organised sector.
Manjit Singh adds, “Today we have plants in 12 locations – six owned and six on contract. In a backward integration move, we also have our own packaging factory here in Ludhiana so the bread wrappers are made inhouse. We use eco friendly wrappers. We are researching on bio-degradeable wrappers as well. We also have our own transport company and 500 delivery vehicles. We were the first to supply bread in closed trucks, the first to mention manufacturing date and expiry date on bread packs even though it was not mandatory. Seeing our initiative it was later that the goverment made it a law.”
Elucidating on the contractual business model, Jitender Singh MD, Bonn Group of Industries explains, “The smaller bakeries in Ludhiana spent a lot of time making breads and couldn’t focus on bakery items which was more profitable. We decided to supply our breads to the smaller bakeries so that they could have more time to make bakery items. This way we created a group of contractual small scale bakery units. As demand for our products kept growing, our capacity was not enough (because small scale industry had its limitations), so these contractual units helped us cater to this demand.”
He adds, “However, in these small units the infra was not strong enough to give the desired quality. Fortunately in 2015, barriers on small scale were removed so then we expanded our horizons to Delhi, UP and pan India setting up our own units in some places and contractual in others.”
Commenting on whether contractual units will continue, Amrinder Singh, director, Bonn Group of Industries explains, “This business is very capital intensive so contractual production will continue to be part of our business model. The removal of barriers also gave us opportunity to acquire better machinery.”
Bread making is a science
Manjit Singh informs, “In the earlier days, there were two sizes of breads 400 and 800 gm. We used ingredients available in India. Now things have changed. Many ingredients like improver, etc now are imported. Bread making was an art earlier, now it is a science. Its structure, whiteness, texture, to maintain all this and be suitable to Indian weather conditions (bread behaves differently in different weather conditions), our formulations and recipe have to be right and for this we have to rely on high technology.”
Commenting on the institutional market, Amrinder Singh says, “We supply to almost all hotels in north India. Restaurants are also using our bakery products. KFC is one of our biggest clients, other burger chains are also our customers. We are present in all segments of HoReCa customers. Being one of leading brands in this region, we are also a preference for the HoReCa segment. People have the trust and preference for our brand. Earlier bread and bakery products used to be considered a very lifestyle product. Now, even the rural population consumes a lot of bread.”
The group is also one of the first innovators, first movers in the health segment in bakery. “We are researching on lifestyle products. Targetting the millennial customers, Bonn has introduced a range of health breads under Bonn Nuhealth. We hired nutritionists and researched to introduce three variants of healthy breads – Active Nutrition, Digestive Balance and Active Heart. We appointed Karisma Kapoor as our brand ambassador to promote these breads. These breads are rich in seeds, fibre, oats, multi grain, etc – different breads for different health needs. The range also has wheat bread, kulcha bread, burger bread and even pizza.”
The company also introduced La Americana Gourmet range of healthy breads that are preservative free. There is also the Americana biscuit range. Amrinder Singh reveals, “There are plans to introduce another healthy range of biscuits. We plan to take our turnover from 650 cr to 1000 cr in 2022. Share of turnover is 60 per cent breads and 40 per cent biscuits (of which 20 per cent is exports). As bread cannot be exported, we export our biscuits to 55 countries across all continents, Africa being main. Our new state-of-the-art plant in Sonepat that is almost fully automated will add to our turnover significantly.”