Things may be looking up for the nation’s bakers.
By which I mean bread manufacturers, not those mourning the end of another series of The Great British Bake Off. I will never understand the depth of feeling so many have for a televised home economics class; my wife actually shed a couple of tears of joy when Nadiya lifted that trophy last night (I‘m assuming they were tears of joy: yesterday was our 20th wedding anniversary so they could have been tears of despair).
But I digress.
For the nation’s bread bakers, there is good news on two pricing fronts – commodity and retail.
Analysts this week said they expect the price of flour to remain low as a result of good production in many northern hemisphere countries, with high yields from this year’s UK wheat crop.
High yields are meaningless if the quality of the flour is poor (which was a key issue with the disastrous harvest of 2012), but this year’s wheat crop also looks to contain the levels of protein required for bread production.
When supply of flour with suitable protein levels is low, the premium paid for bread-quality wheat rises – as happened last year when the premium rose from about £10/tonne to £35/tonne. It has fallen this year to £12/tonne – partly a result of talk about the high quality of this year’s crop - and seems likely to remain low.
In further good news for bakers, retail prices are finally increasing – albeit modestly – after falling for much of the year. Brand View data shows the average price of large (750g-plus) loaves at the big four supermarkets were 98p today – up from the 95p it had been for most of the summer. But before anyone starts celebrating, it is still way down on the £1.10 loaves were selling at for much of 2014.
As new Hovis boss Martyn Wilks said to me this week, pricing is something he has limited control over. But what bakers have been doing is looking to add value to the market through innovation, supported by marketing such as Warburtons’ campaign featuring Sly Stallone earlier this year, and the reimagined ‘boy on a bike’ ad launched this week by Hovis.
If a drop in the price of flour – and hopefully a nudge in the right direction for margins – can help fund such NPD and marketing, then bakers and retailers could have something to celebrate.
Though perhaps not quite as emotionally as a Bake Off winner. Or viewer.