07 September, 2007
T here is one overriding story this summer: wheat and commodity price increases. They have affected the interim results of Premier (pg 4) and they have affected every strand of bakery. I have taken more phone calls and comments about this subject recently than anything else. It has made people wary because the situation is fluid - not finite - and further price increases cannot be ruled out.
If you read the News Analysis on price pressures (pg 14-15) you will see evidence that many commodity prices have doubled. Maple Leaf's Guy Hall puts it succinctly when he says that there is a commodity crisis and no hiding place.Quite a few of you, I know, are keeping cuttings about the increases and using them in your presentations to custo-mers, so I hope you find the information helpful.And as Premier's Robert Schofield told us this week: "The increase in raw materials is not short-term. Prices here have to go up." He is having to take some very difficult decisions affecting whole bread plant closures, but trading is still extremely tough.Does it help to hear what some of our counterparts in Europe are going through? In France, the definitive baguette, almost the country's emblem, is due to increase in price. So the French president's wife is now being compared to Marie-Antoinette of "Let them eat cake" fame (or 'brioches', as is the correct translation). In Germany, meanwhile, bread is due to rise in price by 5% and croissants, containing even more commodities such as butter, are due to rise by up to 17% (pg 12).The whole industry needs the support of the major retai-lers over these price rises, which are unprecented for 15 years, as we have heard. Importantly, consumers are getting the message about food price rises. The topic is being covered on TV and in the press constantly. Consumers will pay more and family bakers and supermarkets must have the courage and will to accept the rises and pass them onto shoppers. Also this week, Improve CEO Jack Matthews updates us on the new bakery qualifications, Steve Ray of Kidder- minster-based Tony's tells us why family bakers are making a comeback and we hear why Wrapid, a new food chain, believes that hand-held flatbreads are the food-to-go of the future. Fair enough, but I can't live without my crusty loaf!