Baking & Snack - July 2008 - 12

R&D PERSPECTIVE | THERESA COGSWELL

Staying on

TRACK
With commodity
odity and fuel prices at record highs, the baking
industry - andd consumers - are iin crisis.
i i So
S what
h t can
bakers do to remain competitive?

efore commodity prices skyrocketed,
R&D departments were scrambling
to stay competitive and ahead of the
game. They worked diligently on
new product innovations, meeting marketing deadlines, scheduling plant tests, adjusting formulations and applying the learning
to improve products.
Enter record commodity and unprecedented fuel costs. Product development
teams are now being mandated to help
bring costs down. Good luck finding a less
expensive substitute for pecans - the price
has gone through the roof. Bakers can't afford the eggs in their products without raising prices. Find an egg substitute that will
allow you to maintain your pricing ... and
preferably without changing the ingredient
list. Gluten is more than $1 per lb. Find a
cheaper alternative. And the list goes on.
Today, food scientists, cereal chemists
and formulators are being asked to perform
magic tricks, but sometimes there is no
"magic bullet" to solve the problem. Technology does not always provide a less costly
answer to the most recent crisis. Let us all
remember trans fat - the solution took
time, not to mention resources. Technology providers do not always have the data
or experience to provide the fast answer;
however, collaborating with suppliers may
offer different solutions.
But just because the task is daunting
does not mean you shouldn't try. It is your
BAKING & SNACK / July 2008

responsibility to ask the difficult questions
of your technology partners and to work
toward an answer. It is your responsibility
to investigate all options, resources and avenues to solve the technical, sourcing and cost
problems. In asking the hard question to one
problem, you may actually find a solution to
a different, equally important problem. Keep
an open mind. While keeping an eye on your
target goal, don't get tunnel vision, which
may cause you to miss an obvious solution
to another challenge or problem.
At the end of the day, stay the course.
Stay the course on product quality, on food

safety and on product size/count. And most
importantly, stay the course on taste, flavor
and quality. Consumers will notice if you
sacrifice quality for cost, but they may not
call the consumer hotline and complain.
Instead, in this very busy world, consumers
are more likely to share their dissatisfaction
by switching brands. If you are not paying attention, your company may not even
notice until it is too late.
Other variables such as reduced consumer spending and rising gas prices may
be blamed for the reduction in volume
and ultimately profits. But over the years,
the baking industry has seen volume and
profits increase during an economic downturn. When times are tough, more people
pack their lunch and prepare more meals
at home and, in turn, purchase more bread,
rolls, cookies and snack cakes. Consumers
will treat themselves with products they
trust. Products from their youth that make
them feel good may be their first choice.
Consumers want to rely on brands they
know. They trust the brands that have consistently been there over the years. You put
your brand at risk for the long term if you
sacrifice product quality and consistency to
save money in the short run.
History tends to repeat itself, and the
history of the baking industry is no exception. The mountains and valleys that define our industry provide a rugged terrain
to navigate. Ultimately, taste, flavor, quality and trusted brands will win consumer
dollars. Those who emerge as winners on
the other side will approach this issue as
a marathon and not a sprint. Slow and
steady will win the race. Hard times do not
last, but smart companies will.
Ⅲ

Baking & Snack - July 2008

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