IN RECENT years, it's been a case of water more than flour for bakeries due, first, to the impact of the pandemic on international supply chains and then the spike on commodity prices as a result of Russia's war on Ukraine. But this year, things are beginning to look up.
According to bakery owners, this Easter saw a return to normalcy. Supplies, production, purchasing, retailing and profits have begun to stabilise due to practices like forward-buying, direct purchasing from suppliers and a shifting business model which has seen the rise of home-based, boutique bakeries that use the internet to reach customers.
It's more than anecdotal evidence from businesspeople that suggests the winds of change.
National Flour Mills (NFM) recently reported increased earnings of $532.8 million, up from $441.6 million in 2021. This, after the company was last year forced to raise the price of flour by almost a half over several months - the first such price increase in almost two decades.
But it's not only flour that goes into the products that come out of the oven.
Businesspeople have been able to deploy strategies to keep costs manageable. They have circumvented price-gouging by doubling up on orders in advance. The effect of this has been to provide a degree of stability, buffering enterprises from opportunistic fluctuations. Some bakers have even begun to take 'pre-bookings,' allowing them to plan inventory levels upfront.
Globally, world food prices remain elevated, but they are on a downward spiral. The Food and Agriculture Organisation of the United Nations this month reported a 12th consecutive decline, with the Cereal Price Index down by 5.6 per cent from February with international wheat prices falling by 7.1 per cent.
This was pushed down by strong output in Australia, improved crop conditions in the European Union, high supplies from the Russian Federation and ongoing exports from Ukraine from its Black Sea ports.
The resilience of the local baking sector is a study in how enterprises can weather a storm. At the same time, it's still early days and there may well be new challenges on the horizon.
Bakeries might be affected by possible utility rate increases which could pose a dilemma for many of them: absorb costs or pass them on to the consumer?
And according to Peter George, the owner of Linda's Bakery chain, there has been an 'atrophying of supply' and there is still ongoing pricing pressure on inputs because of the global environment, with imports accounting for about 80 per cent of consumption.
This Easter, people may have consumed hot cross buns not aware of the fact that they were the result of subtle but substantial changes in the recipe. Linda's had to re-examine the type of butter, cherries, dried fruits, vanilla and cola essence that went into each.
'We didn't get the same brands we use,' Mr George said. 'It gets the job done, but it's not the same.'
A slice of normalcy, then, but the recipe may have irrevocably changed.
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