Scotbake is to cease bakery production in July due to soaring input costs, resulting in the loss of 12 jobs.
The 30-year-old firm was once the largest independent wholesale craft bakery in the Highlands and Islands of Scotland, supplying foodservice and retail sectors with a wide range of savoury and sweet goods including bread loaves, rolls, filled sandwiches, pastries, scones, pancakes, muffins, cakes, and doughnuts.
It is also the distributor of Kingsmill, Warburtons and Hovis products across the Highlands and Islands, operating out of a 14,000 sq ft headquarters located on Burnett Road in Inverness. This had been remodelled out of an old bakery, which Scotbake purchased from Premier Foods in 2011 via a multi-million pound investment from the Bank of Scotland.
“It was a great deal of sadness and reluctance that we have made the decision to stop production,” Scotbake managing director Derek Smith told British Baker, confirming that high energy rates, inflationary impact on ingredients, and increased labour cost had eroded profit margins to the point where it was no longer a viable business for the future.
However, the MD noted that he wished to “concentrate on the successful distribution service that we have within the business”, which employs more than 40 people at Scotbake.
Speaking back in 2011, when he was operations director, Smith said: “Distance to market is one of the biggest problems facing any business in the north and we now have a ready-made, area-wide daily distribution centre, which could bring huge savings and efficiencies to other suppliers who want to piggy-back onto our operation.”
A similar fate befelled Dorset-based biscotti specialist The Artful Baker, which closed its doors in April due to inflationary pressures.
Meanwhile, large-scale manufacturers are reporting significant cost easings in recent months. Mr Kipling and Cadbury cakes producer Premier Foods, for example, announced a return to volume growth in its most recent full-year accounts with revenue and profit both increasing by double digits.
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