Bakery firms can become recession proof
Baked good companies should look to discount chains, control distribution, develop a broad product portfolio, manage input costs and tap into newer markets in order to ensure resilience over the next five years, stresses a report on the European bakery sector.
Industry analysts, Rabobank, in a new report Bakery Sector beyond the Downturn said weak consumer sentiment, the credit crisis, input cost volatility and structural pressure from retailers have impacted the performance of several bakery companies but have also triggered the emergence of new drivers for success.
However, the analysts report that while demand has fallen for more discretionary consumer goods such as electronics and clothes, there has been less pressure for manufacturers of staple food products during the recession. And, they expect bakery demand to remain stable in terms of volume but growth in value to be impacted.
Hedge the buns
Nevertheless, the report predicts that baked good firms will need to hedge raw material prices and introduce joint buying and long term supply arrangements with other players to tackle what the analysts expect will be continued volatility in input prices in the medium term outlook. Read more ……
