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Three Strategies for Addressing Affordability in Bakery

May 30, 2023

How to optimize costs reduce waste and create high-quality products consumers love

After two years of steep price increases the bakery industry is now facing a major issue of affordability. The global energy crisis and extreme weather conditions have put unprecedented pressure on the quality availability and cost of bakery raw materials. As a result people around the world are paying more for baked goods. In some regions consumers are paying up to 33% more for bread.1

The impact on purchasing behavior is significant. With more consumers prioritizing price over other variables in their buying decisions bakery brands risk losing sales to low-cost private label competitors. To survive and thrive manufacturers must fundamentally rethink their approach.

How can production cost efficiency be improved while reducing expensive and unsustainable bakery waste? Additionally how can companies address both affordability and major market trends such as label-friendly products while still appealing to customers with premium quality offerings?

At IFF we’ve combined our advanced expertise with industry-leading consumer insights to address these challenges through our innovative Product Design approach. In this article we’ll share our strategies for keeping bakery products competitive in the new economic environment.

Optimizing Costs
Fluctuating weather patterns cause seasonal variations in flour quality which industrial bakers typically resolve through standardization. When a flour’s natural protein content is low vital wheat gluten is commonly added to ensure uniform batch-to-batch quality of bread and other baked goods.

However because vital wheat gluten is expensive and subject to supply issues there’s a strong business case for choosing alternative more price-stable options. This may include enzymes or tailored blends of both depending on recipe requirements.

By strengthening the gluten network these solutions can eliminate the need for gluten addition entirely optimizing costs while ensuring high-quality bread.

Global economic geopolitical and environmental challenges have exposed the industry’s vulnerability to supply issues. Through our Peak Performance Under Pressure initiative we use IFF bakery enzymes to proactively address global wheat supply challenges helping ensure the stable production of high-quality baked goods.

Discover more by watching our Peak Performance Under Pressure video.

Peak Performance Under Pressure for baking

Elevating Freshness
Keeping bread soft and fresh for a longer period of time is crucial in reducing food waste and balancing costs. Bakery brands that can meet consumers’ expectations for longer shelf life are rewarded with valuable repeat sales.

Our extensive portfolio of enzymes emulsifiers and food protection solutions are specifically designed to maintain freshness without impacting taste. They can effectively reduce stale product returns from retail outlets and allow bakers to save on transport costs by making fewer larger deliveries to each store.

From a consumer perspective this is also beneficial because they can enjoy fresher products with the expected sensory experience for a longer period of time.

Delivering Premium Taste at Affordable Prices

While the cost-of-living crisis is causing consumers to be more conscious of their spending they may still be willing to pay a slight premium for bakery products that evoke feelings of comfort and nostalgia or that offer additional health or sustainability benefits.2 The challenge for manufacturers is to ensure that their brands provide the appropriate value.

We can use tailored systems to create premium but affordable options across a range of bread products. For example we can add soluble fibers to traditional white bread to create a high-fiber version with a nutritional boost without changing its taste or texture.

With enzymes we can create label-friendly bread without using emulsifiers to keep costs competitive.
Lastly we can produce brioche with premium inclusions such as fruits and work with emulsifiers to balance formulation and decrease dependence on butter which is subject to price volatility.

Building on our strong heritage of bakery innovation IFF delivers a wide range of versatile solutions to help bakers thrive despite uncertain times. Through our Product Design approach we combine our formulation know-how and production expertise with insights-driven innovation to be an essential partner for bakery brands when affordability matters most.

Discover the possibilities of affordability in bakery at https://www4.iff.com/bakery_innovation?utm_source=blog&utm_medium=blog&utm_campaign=Baking_Affordability or contact your regional sales representative to learn more.

1 Euromonitor Price Tracker: Bread Q1 2021 – Q4 2022
2 Mintel: Premiumization: Promote food as na affordable luxury

Affordability, Bakery, Baking