Bakers Journal

News
Editorial: Facing the Music


May 16, 2008
By Jane Ayer

You don’t need me to tell you
these are difficult times to be a baker. You’re facing price increases
in everything from the gas you use to fuel your delivery truck, to the
flour you put in your mixing bowl, to the eggs you whip up into
meringue pies.

You don’t need me to tell you these are difficult times to be a baker. You’re facing price increases in everything from the gas you use to fuel your delivery truck, to the flour you put in your mixing bowl, to the eggs you whip up into meringue pies. And with gas prices predicted to reach $1.50 at the pumps before the summer is out, and world wheat stocks the lowest they’ve been in decades, it’s an environment that’s not going to improve any time soon. 

“It’s a very, very tight situation,” says the Canadian Wheat Board’s Bruce Barnett of world wheat supplies.

He predicts it’ll be at least 18 months before those supplies can be built up to “comfortable levels” and that’s with a few really good production yields.
So what’s a baker to do?

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Well, unfortunately, there’s not a lot you can do to influence flour prices. Wheat flour is a staple in most of the products your customers purchase from you each and every day; you need flour. But there are some actions you can take.

First and foremost, if you haven’t done so already, you need to raise prices. I know, it’s something everyone dreads doing, fearing the worst: the lost customer. Well, maybe you will lose a customer – or two, or four. Perhaps some of your customers will cut back, visiting your shop twice a week instead of three times week. But at least you’ll still be in business. Explain to your customers what you’re doing. One bakery owner in the U.S. has taken to posting the price of flour in her bakery, in a place where customers can’t help but see it. Every time the price of flour goes up, the baker changes the sign. Why not do the same with some of the other commodities you’re using? Show your customers you’re not making any more money than you were months ago.

You can also reduce costs in your bakery. Make sure you know how much it costs you to make each and every product you produce. If you don’t know how much it costs to make a loaf of bread, then you’ll have no idea where to begin when you’re looking for ways to save a little money when you make that same loaf of bread.

Perhaps you need to make your products slightly smaller: consumers are snapping up 100-calorie chocolate bars and pre-packaged, portion-controlled cookies. Why not do the same sort of thing with the products in your display case?

Maybe you also need to consider reducing staff hours, even an hour here and there makes a difference. It’s not a popular decision to make, but be up-front with your staff. Tell them you’re taking preventive action so that you don’t have to reduce their hours by 100 per cent. And if you can’t do that, at the very least sit down with you staff, tell them the situation and ask them for ideas. You’re a team – perhaps as a team you can come up with solutions.

Reduce waste. Have leftover bread at the end of the day? Make a sumptuous bread pudding with it, grind it up into bread crumbs and package those to sell, or make croutons.

Talk to your suppliers; ask them for advice. Your suppliers need you and your business as much as you need some of the products they’re selling.

In the long run, you can get through this. People need and love their bread. And just because they have a little less disposable income doesn’t mean they have more time for doing something like making their own bread.

“Bread is a staple and will survive this crisis,” Ace Bakery’s Linda Haynes told one reporter.

Make sure your bakery survives the crisis too.