Milling & Baking News - September 20, 2022 - 21

TUES | 09 20 202 2
market, Ms. Prociv said the company has
conducted research that has helped successfully
pass along rising costs.
" We have done elasticity analysis like
never before at Aspire Bakeries, " she
said. " Data is the best thing to share with
customers. "
Aspire offers both private label and La
Brea branded products, and Ms. Prociv
said to date there hasn't been much of a
shift to private label.
" The La Brea Bakery brand is still valued
because of its quality and history, and
we have the data to support it, " she said.
Part of the uncertainty around inflaLa
Brea Bakery and Robert Mondavi Winery
are partnering in a promotion at Jewel Stores.
now it might be more about costs. Strains
on the health care system have affected
the business, and food has not been the
priority. "
Also slow to rebound has been the lodging
sector, even as more and more people
are traveling once again, Ms. Prociv said.
" The lodging sector has been tough, " she
said. " People are dying to get out, but they
aren't traveling as much as they used to,
still. When they go, the hotels are understaffed.
Business travel is coming back,
but it's not where it was. Hotels have been
struggling. They can't keep their labor.
They aren't sending housekeeping into
rooms every day. They are managing costs,
and the ups and downs of demand. "
The slow recovery of this segment is
more apparent in other categories than
bread, Ms. Prociv said. For instance, many
hotels switched to thaw-and-serve cookies
rather than restarting cookie
ovens that allowed customers to
be greeted with complimentary
freshly baked cookies, she said.
Early in the pandemic, cookie service
stopped completely.
She said the key is to offer products
that are " sanitary, convenient,
wholesome and delicious. "
" I think that will continue, " she
said. " There are other benefits -
lack of labor needed, convenience,
portability - individually-wrapped
will continue. It had a big bump it
will maintain. "
While inflation continues to create
unpredictability for the bread
bakingbusiness.com
tion and elasticity is that the company
has not raised prices so dramatically
in decades. Nor has anyone. Still, signs
remain positive.
" It's a case of so far, so good with the
lesson that if you have a strong brand with
quality products, don't be afraid to raise
price, " she said. " It's a win-win, but you need
to be careful of when you hit the wall. "
LABOR CHALLENGES TAKE TOLL
Ostensibly, having more demand than
a business can handle is a " good problem. "
Bakers at present are struggling to keep
up with demand, but for Aunt Millie's
Bakeries and much if not all of the baking
industry, the current situation is anything
but a " good problem, " said J. Bohn
Popp, vice president of marketing for
Aunt Millie's Bakeries, Fort Wayne, Ind.
That more people are working from
home than in the past is applying pressure
on the baking industry in two ways, he said.
" It has helped with consumer demand,
but it is putting tremendous strain on all
of manufacturing, " he said.
Unprecedented tightness in the labor
market at a time when retail demand for
baking's core products remains strong has
created extraordinary challenges for Aunt
Millie's since early 2021, Mr. Popp said.
" (The difficulties are primarily)
demand driven, it's a capacity constraint, "
he said. " We have business, but keeping
up with the orders. It's the same for our
suppliers and our competitors. We have
the equipment, but the equipment may
not be running because we don't have
enough people to operate it or fix it. "
Other bakers, including Flowers Foods,
Inc., Thomasville, Ga., have experienced
downtime over the past two years
because of pandemic-related or other
labor shortages.
" We're just not getting the pounds per
hour, per week, per month that we have in
the past, " Mr. Popp said. " Our job is to try to
lay out the landscape so we can plan so we
are not just putting out fires. We're making
progress. We're better than last year. We
saw a seismic shift around February-March
2021 that went on and on. We dealt with it
throughout the spring and summer. "
The inability of bakers to meet demand
is not an indication of inadequate capacity
in the baking industry but instead shows
inadequate capacity utilization, Mr. Popp
said. Sales data show that " the overall
numbers are not good, " he added, consistent
with where demand was in 2018 and
2019 before the pandemic.
" I don't think the grain-based foods
industry is growing, " he said.
Amid an inability to fully meet demand,
Aunt Millie's has not placed a moratorium
on new business relationships, Mr. Popp
said. To the contrary, he said the company
and the entire industry is " looking at costs
and margins and prioritizing " customer
relationships.
" The industry has become strategic
about business we take on, "
he said. " To put it simply, we focus
on lowest cost, highest margin
business. We're getting more and
more opportunities from retailers
across the country. "
To take advantage of opportunities
that arise, Aunt Millie's has
given greater consideration to
shipping frozen products and has
extended shelf life (ESL) in certain
formulations.
" We're establishing a lot of relationships, "
he said. " With ESL, you
don't have your little concentric
MILLING & BAKING NEWS 21
LA BREA BAKERY AND AUNT MILLIE'S
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Milling & Baking News - September 20, 2022

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