05 Jun 2017 19:05 IST

Helping people break bread since 1965

Tracing the birth and expansion of the well-loved bread brand, Modern Bread

Old-timers may recall one of the most popular radio jingles of the 1960s — ‘Mummy, Mummy, Modern Bread’ — which was even used in an old Tamil movie that starred late Tamil Nadu Chief Minister: a timid and shy J Jayalalitha is shown singing the jingle! That was how popular Modern Bread, the first branded bread in India, was.

The name was almost synonymous with bread: in fact, the brand is credited with having pioneered the bread category in India. Back then, there was even a rumour that Modern had the ‘secret’ recipe for eggless cakes!

How it started

Modern Bread was a product of Modern Bakeries (India) Limited, a Central Government-owned Public Sector Unit. It was launched in 1965 at Kazhikundram, Taramani (near what is now Tidel Park) in Tamil Nadu.

The company was part of the Colombo Plan, a 1951 post-colonial initiative begun originally by seven commonwealth nations — India, Australia, United Kingdom, Canada, Sri Lanka, New Zealand and Pakistan — to nurture economic and social development in Asia (The company also marketed Rasika, a fruit juice concentrate, and Double Seven, India’s answer to Coca Cola and Pepsi).

In the 1960s in India, among bakery products, cakes, biscuits, rusks, buns and pastries ruled sales while bread came second. The northern and western markets accounted for maximum sales. Modern Bread’s blue-and-orange packaging evoked tremendous brand recall, even when the country was not wholly sold on bread.

Baking many firsts

It consolidated its position with a series of winning innovations in the bread line: it claims to have introduced the first Indian bread with vitamin fortifications in 1968; sweet bread in 1971; India’s first fruity bread in 1981 and first brown bread — Wheatamin — in 1991.

It was renamed Modern Foods India Ltd. in 1982. By 1989, to keep up the pace of supply, it is said to have introduced automatic packing machines.

By 2000, however, its losses amounted to about ₹ 48 crores despite a 40 per cent share of the bread market. It was then privatised by the Indian Government and sold to Hindustan Unilever Limited (HUL), which referred it to the Board of Industrial and Financial Reconstruction (BIFR) the very next year. After some revamping, the company became profitable.

Acquisitions and opting out

For about 15 years, HUL tried to integrate its new acquisition with its other products, experimenting with different pack sizes and bread categories, and launching cakes, rusks and cream rolls. Several ups and downs later, HUL sold the company to a private equity firm Everstone Capital in 2016. The same year, Modern Bread was voted the Most Trusted Bread of India, according to Brand Trust Report (India Study 2016).

HUL is reported to have opted out of the short shelf-life product because it was too small a business for it to expend its energy on. Everstone Capital, which had already invested in several food and beverage firms, saw an opportunity for increasing its potential.

Today, the company is called Modern Food Enterprises Pvt. Ltd. Everstone Capital has invested in an innovation centre for improved R&D and better manufacturing facilities to promote the brand. After closely tracking changing consumer consumption patterns, lifestyle changes and other factors, it came up with new packaging designs and graphics, introduced new value-added products and even ventured into the ready-to-cook chapathi and paratha space in Kerala and Tamil Nadu under the Modern brand name.

Focussing on health

Modern’s product range now includes several bread varieties — Fruity, (calcium-enriched) Milk, Enriched Sweet, Family Special, Sandwich Supreme, Hi Fibre Brown, Atta Shakti, 100% whole wheat, Multigrain Superseed (with Omega 3) and Multigrain Oats & Flax. In fact, the market for such value-added breads is expected to grow at the rate of 18-20 per cent in the coming years, with consumers shifting to healthier eating habits.

Aware that the consumption preference is now shifting towards healthier, ‘traditional’ options, the Modern website takes pains to give nutritive value, ingredients list, and a ‘2 slice’ information for every type of bread on offer.

There is even a ‘#belikebread’ campaign, where a nicely toasted slice of bread pops out of a toaster with every click on the handle, dishing out pithy, worldly advice.

Great emphasis is placed at Modern Food on health and wellness, even as plans are afoot to venture into biscuits, cakes, croissants and noodles. Apart from growing organically, the company is also looking to acquire local brands that have good quality and a name in the market. To this end, the new slogan ‘Thrive, and savour life to the fullest’ captures its goals perfectly.

Manufacturing plants

The Modern business currently has six manufacturing plants: one at Mumbai, one at Kolkata and 4 in the South — Bengaluru, Kochi, Hyderabad and Chennai. A network of about 20 franchisees covers the country. Modern products are available now at over 80,000 retail outlets across India; further expansion to touch the 1 lakh mark is in the pipeline.

The ₹3,500 crore bread industry in India has been seen as a highly fragmented, ‘morning’ distribution category till now. There are many local players, both organised and unorganised, with the former accounting for 45 per cent of the sales and the latter for 55 per cent. Around 1,800 small scale bread manufacturers, 25 medium scale manufacturers and two large scale industries — Modern and Britannia — make up the organised sector.

The overall bread market in India is said to be growing at over 3 per cent per annum. White bread sales account for 75 per cent of this market, followed by brown bread at 15 per cent and fruity and other varieties accounting for the rest. Each region has its favourite brand of local bread but at the national level, only Modern and Britannia stand out, with the former being the market leader in the organised segment.

Revenue and expansion

Sales, however, are still concentrated around Tier 1 and Tier 2 cities, as consumers have not only more brand awareness but also higher incomes.

Modern Foods registered a revenue of ₹270 crore for the year ended March 2017. About 90 per cent of the revenue came from breads and the rest from cookies, rusks and cakes. Hopes run high that the ₹1,000 crore mark will be reached by 2021.

The company has plans to consolidate its presence in States it already has a name in, like Tamil Nadu, Telangana, Karnataka, Kerala, Maharashtra and West Bengal. Expansion plans have been made to enter the northern and western India.

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