Sweet pastries: Butter prices squeeze sweet pastry margins

Smaller sizes and niche products are just two of the strategies being used by suppliers to bolster sales as ingredients prices take their toll

Weakened butter supply – and consequent soaring prices – is putting pressure on pastry manufacturers.

Last month, EU butter was selling at more than £6,000/metric tonne (mt), up from £1,825/mt 18 months ago. The crisis – a result of falling dairy supply across Europe – has prompted the federation of French biscuit and cake-makers to warn of major difficulties for its members, while businesses including Aryzta and Finsbury Food Group have said they are feeling the impact on margins.

In the face of such challenges, how are makers of croissants, pains au chocolat and other sweet pastries protecting themselves?

“Everybody is under the same umbrella and we are seeing significant price increases in dairy,” says Mike Holling, head of retail at Bird’s of Derby and former executive director of the Craft Bakers Association, adding Bird’s is in constant dialogue with its suppliers.

“We have introduced small price increases, but aren’t able to pass on the whole lot,” he says. “With a business the size of Bird’s we have some leverage, but there’s not much we can do because we have a key range of products our customers expect.”

One strategy is to attract higher prices through premium products and by tapping niche markets.

Hybrids such as the croll (croissant/roll) and scioche (scone/brioche) are keeping consumers interested in novel pastries and help bakers charge a premium, says Samantha Winsor, assistant brand manager at Lantmännen Unibake UK.

“Consumers anticipate that these items will occupy higher price points and are willing to pay more for premium and interesting products,” she says.

Authentic products such as the Portuguese Custard Tart, which recently featured on TV programme The Great British Bake Off, can also increase margins, adds Winsor. “Consumers are willing to pay more for authenticity. Its small size, light pastry and sweet creamy filling, combined with its easy-to-hold shape, make it the perfect sweet snack.”

Other bakers are taking inspiration from major manufacturers and downsizing. Shrinkflation may be most readily associated with chocolate bars and other grocery staples, but bakers can also tweak sizing in order to help the numbers add up.

As well as delivering better margins, smaller products offer other benefits. As consumer interest in health continues to grow – and health is cited as a key reason for cutting down on treats – miniature formats provide customers with the option to exercise portion control and enjoy mini pastries as a small indulgence.

It is also important to go back to basics and minimise waste. Using frozen bakery products is one way to do this, says Winsor.

“Outlets should bake off little and often throughout the day to ensure products stay fresh and appealing,” she says. “This also decreases wastage as short bake-off times make it easy to manage stock levels. Frozen bakery products also allow outlets freedom to offer a range of quality bakery products, with minimal labour requirements, and without the inconvenience of storing fresh ingredients.”

While there has been good news in recent weeks, with butter falling from its histroic high and production up fractionally year on year, margins will remain a concern for pastry producers for some time to come.

Pastries enjoy positive trend

The Viennoiserie category is performing well, with value sales up 8.8% year on year to £92.6m and unit sales up 11.5% (Kantar Worldpanel Usage data, ISB Sweet & Bread, March 2017).

Danish pastries are also on the rise in the in-store bakery category, Kantar Worldpanel Usage data shows, with value sales up 9.4% to £70.6m and unit sales up 13.7%.

According to Samantha Winsor, assistant brand manager at Lantmännen Unibake UK, maple pecan plaits, cinnamon swirls, vanilla crème crowns, all-butter croissants, pains au chocolat, pains au raisin, chocolate croissants and almond croissants are all strong sellers in the market.

Add glamour to your goods

High-gloss finishes have been tipped as a big trend in the bakery market, and there are many products to help bakers achieve these finishes with minimal effort.

Finbar Haughey, technical sales manager at Andrews Ingredients, recommends Braun shiny spray apricot and shiny spray white.

“These are sprayed straight from the can onto the warm product,” he says. “In days gone by, bakers would have boiled apricot jam and brushed the pastry or made a water icing and brushed the warm product.”

Haughey also recommends Sonneveld Credishine, a ready-to-use glaze that can be sprayed on to products such as hot cross buns or brioches to give a shine and can be used pre- or post-bake. 

Today’s consumer is after even more eye-catching appeal than offered by a simple glaze, and the trend for metallic glamour is big news in sweet pastries, suggests Jacqui Passmore, Dawn Foods UK and Ireland marketing manager.

Giving a glamorous glaze to fine pastries and bakery products can be achieved with ready-to-use cold press glazes, which are easier to use than making up a glaze from scratch.

Passmore recommends Dawn’s Decorgel Plus, a ready-to-use glaze that is stable enough for domed and vertical surfaces without the addition of stabilisers.

“This is particularly important for pastry chefs and patissiers creating the most intricate pastries and desserts,” she adds.

Adding vibrant colours to a pastry glaze can create fantastic ‘pick me up’ appeal too. As well as caramel or chocolate glazes, Dawn’s Decorgel is also available in neutral and can be combined with fruit pastes to give an eye-catching array of colours.

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