Prices go up for ingredients at the bakery

Day-old baked goods rise in price since costs are going up

There is a premium bakery in Grand Rapids, Michigan that prides itself if using the best ingredients. Many people are willing to pay the high price for delicious bread, pastry, and other baked goods. Others shop on the prominent rack of leftovers from the day before; the "day-old" display. Until lately, everything rang up at 1/2 price from the freshly baked price. But now the hand-lettered sign declares "Day-old 25% off." When asked, the clerk described the rising costs of dairy and eggs in particular since they use so many and because the Avian Flu has led to mass extermination of flocks in an effort to stop the virus transmission to other birds and then to egg farms. However, the new pricing of day-olds is for pies and bread loaves, not the smaller items bagged up and sold as "buy one at full price and the second one is free"; in other words, two for the price of one, or 50% of the fresh pricing. So in this photo, the day-old wheat bread was marked down 25% but the bag of 2 muffins and the bag of 2 morning buns priced out at the old 50% discount.

Talking with the clerk further, it turns out that certain parts of the display case of pastries sell out sooner than others, depending on the day and the time of year. But in general, the fruit tarts and the cannoli with one end dipped in chocolate sell out soonest most days. Ham and cheese croissant sandwiches are very popular, too. Turning to the bread racks, the plain loaves (San Francisco Sourdough; Country French) are in high demand, but they are also at the lower end of the price scale. Two of the breakfast breads seem to sell out quickly, too: English Muffin Bread, and another laden with dried fruit called Breakfast Bread.

The high-end bakery is in a curious position: customers are loyal. They value the full-bodied taste of the baked goods. And at least some of them are not price sensitive; they'd likely buy the same as always no matter how much the prices rise. So while the range of products spans the staple (daily bread, albeit premium ingredients and pricing) to the luxury (diverse pastries), somewhat similar breads and sweets also sell in convenience stores, big box retailers, and grocery stores. In other words, what the premium bakery sells is not so much high-quality ingredients as the care, handmade process, and smaller scale compared to factory bakers. So the loyal customers are in a relationship or community experience. They know their purchases sustain the model of high-quality baking traditions and the people busy behind the counter in the process of making more.