One of the busiest seasons for bakeries is here once again as customers are making their way back to buy their favourite baked goods for the Easter holidays, at almost the same pace as pre-pandemic days. Bakery owners say there's a sense of normalcy as supplies, production and purchasing, retail prices and profit have begun to stabilise.
Gregory Laing, the owner of Puff N Stuff in San Fernando, and Peter George, the owner of Linda’s Bakery chain, said getting flour at a better price came after National Flour Mills (NFM) engaged in the forward-buying of wheat in 2022. Seeing that, it was easier for the food industry to determine what would happen this year.
Forward-buying involves buying goods or services in bulk in advance of when it is actually needed.
It should be noted that NFM recently reported that it earned $532.8 million last year compared to $441.6 million in 2021.
With this business strategy in mind, Laing and small-scale baker Selena Khan, of Cupcake Faerie, decided to do the same and buy directly from the suppliers of ingredients to avoid being price gouged by wholesalers.
Laing said, “What we noticed is happening with a lot of our inputs, especially with margarine and mayonnaise, they tend to be bought by wholesalers from the manufacturers in large quantities and the wholesalers put a 25 per cent mark-up on it.”
He urged other bakeries, especially smaller-scale ones, to be on the lookout and plan their spending properly else they will end up in a deficit.
Khan said she was unaware of these mark-ups and for quite some time, she fell victim to price-gouging.
“I thought moving in the direction of purchasing wholesale would be better, as the demand increased we said we needed to buy these things in bulk. But when we did a comparison we saw that we were paying more and we would restock all the time, especially during Christmas which is a peak season.”
[caption id="attachment_1009548" align="alignnone" width="1024"] A beautifully designed cake by Selena Khan. -[/caption]
She said it was only after the Christmas season did she see the great increase she had to endure blindly. Now, she ensures she gets her products from the suppliers.
Laing added, “What we have started doing was double our orders. For example, we used to buy 50 cases of mayonnaise a month, but now we take 100 cases and reorder when we hit 50 cases. So we have to give ourselves, I would say a month’s buffer to make sure we get back stock at the manufacturing or distributing prices rather than wholesalers.”
Laing warned that are many wholesalers in the industry. He used mayonnaise as an example and said each wholesaler may buy around 400 cases of mayonnaise leaving unaware business owners to pay a 25 per cent markup.
“We saw that trend and we have planned for that now. We must have a larger cash flow now to put out more, so the inventory levels can be higher and we won’t have to inadvertently buy from wholesalers.”
He added that the issue now is not about sourcing supplies, but rather finding the proper timing for pu
