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Sri Lanka’s Baking Industry

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With the rapid change in the global economic environment, the eating habits of consumers have changed considerably over the course of time, thereby creating numerous challenges for the food industry. The baking industry in Sri Lanka, and this includes the biscuit industry as well, has seen massive leaps and is looking to re-invent the industry to prepare for future challenges. However, the increasing prices of bakery ingredients such as wheat flour and other factors such as cost of energy and fuel play a huge role in the final pricing of the product. Consumers don’t prefer a hefty price for baked products and with the increasing external costs, compromising on the final pricing isn’t always an affordable choice for businesses in the baking industry. This is where the real challenge arises for the baking industry in Sri Lanka.


Developing cost-effective baking recipes and yet, ensuring high quality baked goods, a reduction in the overhead costs such as administration, production and marketing are some systematic ways to counter these challenges. After all, a business can only be successful if the manufactured baked products are marketed at affordable rates.


The primary base ingredient in the baking industry is wheat flour and with Sri Lanka being a country where wheat isn’t grown, the baking industry relies in imported wheat. The production of wheat internationally has seen a dip and prices are expected to increase. Owing to this, the Sri Lankan government is encouraging the use of rice-based products in a bid to save the hefty amount of foreign exchange that is consumed in importing wheat flour. Subsequently, the Sri Lankan baking industry will not be given any financial support from the government to keep the prices of wheat flour at a lower rate. Other key baking ingredients such as margarine, baker’s yeast, vegetable oil, skimmed milk, flavorings, dried fruits and sugar, to name a few, are also imported to Sri Lanka or produced from the imported raw materials. This is another challenge the baking industry faces today and product innovation is the most effective way to counter this. However, with the help of a wheat flour importer, the baking industry has received good quality ingredients at negotiable rates.


Overall, the baking industry of Sri Lanka has stepped up to the challenge and is now manufacturing good quality baked products at reasonable costs. Biscuits and bread are two major components of the baking industry and cover approximately 80% of the total baked products. The baking industry has moved to modern methods to keep up with the customer requirements. While the final price of baked goods does play a key role, it’s not the main concern of most consumers. People are more concerned about the quality of products and this is why the Sri Lankan baking industry has developed a higher level of quality and is implementing the best industry standards. In addition to this, the hygienic environment of the bakery is another important factor and if these standards could be maintained, there is no doubt in the fact that the baking industry could be a profitable one.



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