The bread industry hopes to see a slight recovery this year after a decline in 2023 despite rising cost of production and changes in the spending pattern of consumers.
Simplicio Umali Jr., president and general manager of Gardenia Bakeries Philippines, projects a 5- percent growth this year even as players grapple with a 5-percent increase in the cost of raw materials.
Umali said the industry sees the market stabilizing but is careful not to increase their prices.
While flour prices have stabilized and are slightly doing down, sugar and imported components like yeast, skim milk, margarine and improvers have gone up due to foreign exchange.
Aside from production cost, distribution cost due to high fuel prices has also made a dent on the bread industry.
“This year, the bigger problem is that consumers are buying less in their basket because of inflation,” said Umali.
From two loaves of bread per week, some buy just one loaf. Others switch to low-priced bread.
Umali said the opening of on- site school has helped but not yet back to original basket
“We anticipate this year to be better consumers are earning more and their expenditure pattern is stabilizing,” Umali said.
One big cost component is labor following the almost 10 percent increase in minimum wage.
“People have more money to buy but (that increase) is being eaten up by inflation,” he added.
According to Umali, Gardenia is maximizing its operations with the available capacity of its plants.
The Philippine Baking Industry Group has a pending request to the Department of Trade and Industry fora P2-increase in the price of Pinoy Pandesal and Pinoy Tasty, the production of which is a corporate social responsibility project of the organization.
The Pinoy Pandesal is currently priced at P25 per pack of 10 or P2.50 per 25-gram piece.
Regular pandesal in some community bakeries is priced at P4 per 30 to 35-g piece. Irma Isip
