Small bakeries in Mexico manage to resist the rise in raw materials

Published Mar 25, 2022

Tridge summary

Small bread producers in Mexico are facing challenges due to rising supplies and high raw material costs, which they cannot pass on to customers as they have a smaller profit margin. They are modifying ingredients and stopping the production of certain products to survive. Some producers are also exploring alternatives to traditional ingredients like flour to reduce costs. The risk of storing large quantities of inputs and inability to negotiate for large raw material purchases is a disadvantage for these small producers compared to large companies.

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Original content

MARA ECHEVERRIA. EXPANSION. Small bread producers have changed some ingredients and even stopped offering some products to ensure the life of their businesses. The disadvantage for small producers is that, unlike large companies, they cannot store large quantities of inputs because they run the risk of hatching larvae or stopping serving them, in addition to the fact that they cannot negotiate to buy raw materials in large quantities. "Costs become more expensive for large companies than for bakeries, only that companies have the conditions to generate even more efficiencies and the livelihood opportunities of large companies to withstand these price shocks are greater than small producers," he says. Marcela Muñoz, director of analysis at Vector Casa de Bolsa. Mexikan Bread is a business founded by Nancy Mercado a little over three years ago, who withstood the complications of the COVID-19 pandemic and is now facing rising supplies, from flour to butter. However, with the recent ...

Source: Inforural