Baker: Many bakeries will not survive the current cost spike

The Adélka bakery is a phenomenon. It has been operating in Pelhřimov since 1990. Turnover of a quarter of a billion crowns, three hundred employees. It is a family business run for many years by the son of the founder Roman Teisler. The company has its own mill, produces and markets more than a thousand products. Bread, pastries, rolls. He is a local leader. How does the bakery business actually work? The bread will increase dramatically, as it is written now?

The pastry would be much more expensive. How much will the bread cost?

It’s a two-day debate. I don’t want to scare readers. In the bakery, the situation has been degenerating for many years. The beginnings are at a time when we had the republic dismantled. We left material reserves. Every good housekeeper, every family, must think about the backdoor. Everything can happen. Today is war in Ukraine. It could be a bad harvest or some other disaster. We cannot ignore this. However, it seems that the more a society is advanced, the less it can take care of itself.

How is it going in your industry, in the bakery?

Our business begins with a mill. There is the main raw material input, grain. We grind wheat and rye. The situation for both products is identical, a complete shortcoming. And most importantly, after the harvest quickly disappears quality wheat, food.

Farmers run for a better price? Do they export?

It’s natural, nothing prevents it. But today, wheat for food and feed has a minimal price differential. At the same time, the cost of food is much higher. You need to fertilize more and so on. Farmers are losing their motivation to grow food wheat. Fortunately, not everyone looks only at the money. Many of them realize that they have to cook. We won’t get there with clover.

Energy? Russian roulette game

At the same time, Czechia could be independent in the production of wheat, we can grow enough of it.

We are a wheat exporting country. But on the other hand, the volumes of our production are marginal compared to the needs of the European Union. It will be exported immediately. And the millers watch the prices carefully, because the margins on the production of flour are very low. Every hundred crowns of price per ton decides whether you are above zero or below zero.


Bread for 60 crowns? The reality is that bakers are warning if the government does not restrict wheat exports

Money

According to the Union of Bakers and Confectioners, the Czech Republic should limit its wheat exports, the price of which is about double year on year due to fighting in Ukraine. Ordinary bread could cost 60 crowns this year.

Read the article

You have your mill. Was it the intention to protect against the possible effects of price fluctuations?

It was my father’s most ingenious investment in the 1990s. My colleagues and I built and opened the mill.

You conclude contracts with suppliers several months in advance. Why should wheat and your products currently become more expensive because of what is happening in Ukraine?

Ukraine and Russia are the largest grain producers in Europe. As everyone knows, wheat is sown in the fall. But if he reaps, that’s the question. Of course, you have been dealing with business relations for many years. But the situation is changing. Someone will say: throw in three cents a ton. Fortunately, there aren’t many. Everyone thinks about it and speculates a little. Fortunately, we have serious suppliers, we go with them at monthly or bimonthly prices. Adélka knows she has exceptional relationships with local farmers. When the price drops, we’re not going for blood with them either. When you consider someone a friend, you shouldn’t scratch them. You have to build such relationships and trust for decades.

So what will be the price of bread. People are afraid that they will become more expensive…

The problem is that cereals are becoming more and more expensive. And instead of subsistence wheat, they offer you fodder. The other mills make flour at a discount and take it to the supermarket in action. We have a mill to not be dependent. And also because we have quality. I see a loop of flour narrowing above some bakeries. We have to profile ourselves in the market, we cannot chase Penam. He would tear us to pieces. We say to ourselves here, it’s a chase, to be number one in Pelhřimov. But if you ask about the price of wheat, we have doubled year after year. And the price of energy is multiplied by three…

In an era of record inflation, Americans are buying more expensive but lower-quality things, the study finds.

How much will food prices go up? Food figures suggest tens of percent

Politics

If the government does not come up with a working model of subsidies to food producers, rising energy prices and shortages of raw materials will affect end prices for consumers. The Food Chamber of the Czech Republic points this out. It demands the capping of energy prices or the abolition of excise duties on fuels.

Read the article

Higher costs are not just temporary

Are you addicted to gas? Its supplies are now threatened…

There is electricity on the mill. You only get gas when you drown in the control room office. But above all there is gas in the bakery. You are playing Russian roulette with your energies. Either go for markers or combine them to eliminate the risk. The competitive environment is causing bakery products to fall. I am thinking mainly of distribution chains. They don’t chat with you at all, it’s dictation. The Significant Market Power Act was created, but it is ridiculous. Nothing has changed. Your costs go up tens of percent, and you come to the chain, and they tell you to come after Easter. We started pulling out of distribution chains about twelve years ago.

How do you distribute pastries?

We have our stores and we supply an independent market. But each variant has its risks. However, it was stressful when the manager of a multinational chain of stores took you away for six months. And you have three hundred employees, you have to provide them with an income. You find a safe delivery route, but it’s not safe.

Will the bread cost sixty crowns?

The outlook is not optimistic, but I don’t mean to scare. Every week we recalculate how much it will cost us. We must maintain our position as quality leader. You have to invest in technology, in people. We have four apprentices, we are raising children. Anyone who comes out of the street people can only do one discount.

And the price of bread?

We have to copy the developments. We are not yet clear on the purchase of grain at one hundred percent of the contract price. It is driven by supply and demand. But beware, bakers aren’t just energy and flour. Sugar holds up well, but oil gets more expensive. We took the yeast from Ukraine, it is gone now. And these are not small volumes, like when you cook at home in the kitchen. Prices now move much faster.

They can now change the price for us day by day

Before they changed on the first day of the month, now they change the price anytime. Someone comes here every day and has a new price. Prices are rising, but overestimating production is no fun. Adelka manufactures over a thousand products. And chain stores don’t speak to you at all. I don’t mean to scare, but I have some stupid guesses.

Ukraine will be the key. Cereal balance sheets are not good. He probably won’t go back in time. I do not believe that the price of wheat will be 4500 crowns per ton. I heard that in some cases wheat that has not yet come out of the clay is bought for 7,500 crowns. It’s a lottery. Many bakeries already stand on the edge of the rock.

President of the Agrarian Chamber of the Czech Republic Jan Doležal

Head of the Agrarian Chamber: Parts of the farmers have raised the price of fertilizers by hundreds of percent. They had no supplies, now customers will feel the same

Opinions

One of the consequences of the Russian invasion of Ukraine and the economic impact on the world is the sharp rise in the price of fertilizers, of which Russia is the largest supplier. Food producers claim that food costs up to tens of percent because of this. “The situation of the national agricultural primary production is really critical and we consider the government’s response to this situation to be weak and even counterproductive,” says Jan Doležal, president of the Agrarian Chamber, in an interview with newstream.cz.

Read the article

Should the government prevent the export of wheat so that there is enough in the Czech Republic for its own use?

Many previous governments have abandoned food security. At the same time, securing the people of your country must come first. Farmers might not like being prohibited from exporting. But on the other hand, the margins must be reasonable. Nor do we sell bread with thirty or fifty percent profitability. Everyone has to be smart, especially at a time when there is a food risk. There should be an amount of raw materials that should not leave the republic. The state should be in charge.


The food crisis will. Only question is how big, says fertilizer maker

Money

Russia and Ukraine are the cereals of the world. And also the main producers of fertilizers which, according to the Bloomberg index, exceed their all-time highs.

Read the article

Leave a Comment