The bakery and pastry product sector is facing cost increases at present, but increased innovation is helping firms to steer through the challenges. This article first appeared in ESM July/August 2022.
From an ingredient point of view, one of the main takeaways from Russia’s invasion of Ukraine has been the effect on the global grain market, as well as certain edible oils. Both the FAO’s Cereal Price Index and Vegetable Oil Price Index hit all-time highs in March, meaning that prices in these segments are at their most elevated levels in more than 30 years.
While prices have dropped marginally since, this inflationary situation is playing a role in the bakery category, which is having to navigate a number of simultaneous challenges. As well as increased grain and oil prices, the sector is still in recovery mode, following a COVID-19 crisis that saw the HoReCa sector – a key channel for bakers – all but put on hold for two years.