Manufacturers of bakery goods know that profitability depends on uncontrollable factors. These businesses are often at the mercy of volatile market prices and changing consumer demands. For example, the price of wheat flour can suddenly increase or decrease – thus affecting their bottom line.
If a bakery manufacturer wants to stay profitable, reducing overhead costs is a must. It will involve streamlining production and reducing expenses by focusing on key aspects of the operation.
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Inventory replenishment based on current demand
For a bakery business, it isn’t wise to replenish supplies based on projections. A better approach would be to keep an inventory good for the time being, or in a quantity that will meet immediate needs. It helps when you base this decision on historical order data. However, it’s also essential to consider the turnaround or transport time of wholesale bakery suppliers. There should be enough to cover the necessary ingredients until the next delivery date.
For a smoother operation, there needs to be consistent communication with suppliers. Many bakery manufacturers today use administrative tools to make an order. Thus, placing and processing transactions become more efficient. This way, they can track and monitor the status of their orders – helping minimise the possibility of a break in the supply chain.
Adjust price points to ensure profitability
Bakery goods have a short shelf life, making these products prone to loss. As a means to reduce loss, some wholesale manufacturers raise the price point of their goods. However, this practice is likely to deter and not attract consumers.
One innovative approach to take is producing items with a longer shelf life. In the case of supplies sent to retail stores, excess goods may be given away as incentives or sold at reduced prices.
Reduce energy consumption
Bakeries use a significant amount of energy. To reduce costs, manufacturers can consider implementing sustainable elements. Some examples include installing solar panels and initiatives to reduce water use. In addition to these direct changes, there are also ways to indirectly achieve energy efficiency. For example, by making processes more efficient, it’s possible to complete production in less time.
Apart from energy consumption, bakery companies also lose profit because of waste. Unused products and spoiled ingredients all go against the company’s bottom line. Instead of working on estimates, it’s best to use tools that will calculate precise consumption and yield. This way, it’s possible to control inventory and buy only what you need per batch.
Explore food trends and new markets
Many bakery manufacturers cater to a niche market with a steady demand. But, food trends are also disrupting the industry. While some of these trends aren’t viable for long-term production, it’s good to consider in the meantime. For example, the current trend is healthy food and alternatives to basic wheat-based goods. Catering to this demand is a highly profitable venture, especially since more people are becoming health conscious. Another example is to produce vegan-friendly options that you can supply to retail stores, supermarkets, and speciality restaurants and food purveyors.