Inflation concerns are top of mind for bakers both for themselves and consumers. 

Jon Davis, culinary innovation leader at Aspire Bakeries, Los Angeles, said Aspire is looking at the company’s portfolio and making sure everything makes sense financially.

“Inflation and the cost of goods have thrown a lot of items out of whack from a profit standpoint. You can only charge so much for certain things,” he said. “Costs and pricing are something we’re having to have a look at internally as to how are we making these foods and the cost structures behind them.”

For instance, the cost structure of foodservice is different than retail, so the company is ensuring it is charging the right price based on customer needs. 

“It sounds easier than it is,” Mr. Davis said. “For example, we have six different baguettes and each one has a different case count, so we’re evaluating things like that. So why do we have this case? Why won’t this case over here fill this customer’s needs and so on? These are the types of things we’re looking at to streamline our operation and help our customers with costs as well as ourselves.”

Consumers are watching high prices, and half are looking for sales or deals more often, said Melissa Altobelli, principal, strategic solutions group, IRI. Much of the growth in food last year came from low-income households benefitting from stimulus money, which is no longer available. She added that the average household is still making nearly 80% of meals at home.

“Forty-eight percent of households [in April] did not get takeout or eat at a restaurant because of inflation,” Ms. Altobelli said. “I feel like bread is a category that will probably maintain. … We know that self-care is still very important for people still coming out of the pandemic, so these healthier breads that are making traction now in the category, they’re going to continue.”

Companies must watch inflation to see if they need to make any changes. But there are plenty of interesting R&D developments happening in bakeries.

“We’re going to start turning the wheels of innovation a little bit harder,” Mr. Davis said. “In a year from now, innovation is going to come back on the radar big time. Once we get out of this hiccup we’re having with supply chain and ingredients, everyone is going to want innovation immediately. You can’t stop. So I think now is the time to really build your innovation portfolio, which I plan to do, so we’re ready when the customer wants it.”

This article is an excerpt from the July 2022 issue of Baking & Snack. To read the entire feature on Bread, click here.