Some Klang Valley baking supply shops, bakers feel the pinch this Raya as cost of raw ingredients soar

·6-min read
Wheat prices are soaring as a result of the Russia-Ukraine war and the effects are being felt by Malaysian baking supply businesses and home bakers.  —  Unsplash pic
Wheat prices are soaring as a result of the Russia-Ukraine war and the effects are being felt by Malaysian baking supply businesses and home bakers. — Unsplash pic

PETALING JAYA, April 25 — The family-run bakery goods store Shikazo Baking Supplies in SS14, Subang Jaya was unusually quiet just three weekends before Hari Raya.

In previous years, the well-stocked shop located in the less chaotic side of Subang Jaya would be bustling with baking enthusiasts loading up on French butter, Belgian chocolate or any crucial ingredient for a successful kitchen adventure.

Even restrictions of the movement control order did not deter bakers from patiently queuing up outside the premises until it was their turn.

After all, many found solace in baking during the pandemic.

Hasrol, who runs Shikazo with his family, told Malay Mail business hasn’t been good this year.

“We experienced price hikes since last year and that trend has been continuing until now,” he said.

Two years into the pandemic, it is well known by now that the global supply chain has been disrupted by the slowing down and temporary halting of the delivery of raw materials due to lockdowns and natural disasters such as floods.

Today, the global food system is experiencing another shock — Russia’s invasion of Ukraine, one of the world’s biggest exporters of corn, wheat and sunflower oil, is causing the prices of such ingredients to spike.

“We had to increase our flour prices from RM2.50 a packet to RM3.10 and butter also went up by 30 to 40 per cent,” Hasrol said.

“It’s actually almost everything across the board.”

Most of Shikazo’s customers are home bakers but given the massive hikes, many are baking less this Raya and those who are buying ingredients complain about the price jump.

“Compared to last Raya, we’re not seeing a lot of people buying baking ingredients.

“With the high prices of goods, even for our end users who are home bakers, their customers are not really ordering with them anymore.

“Now that things are opening up, people aren’t stuck at home and forced to bake, maybe it’s better to travel instead,” he said.

A representative of a popular baking supply store in Petaling Jaya who wished to remain anonymous said the Ukraine war and supply chain disruptions sent prices of most consumer goods rocketing including flour, dairy products and packaging materials.

Shikazo Baking Supplies said butter prices went up by 30 to 40 per cent.  —  Picture via  Instagram/Shikazo Baking Supplies
Shikazo Baking Supplies said butter prices went up by 30 to 40 per cent. — Picture via Instagram/Shikazo Baking Supplies

“We have to constantly monitor the price changes as we may or may not be informed ahead of time; it can get overwhelming and frustrating,” the rep said.

Suppliers have increased their cost from 10 to 50 per cent as a reaction to these hikes and baking supply stores have no choice but to follow suit to survive.

“Sometimes we try to absorb the increase, but it isn’t sustainable.”

The rep said customers are still baking despite the price increase but with more consideration and reservations.

“We aren’t too optimistic at the moment that the situation will improve — we probably need to embrace ourselves for more price increases globally.

“We are still suffering the effects of the pandemic and lockdowns; the war in Ukraine can only but intensify it,” the rep said.

Bigger businesses that benefit from the economies of scale such as Bake With Yen (BWY) have the means to help customers save despite the rise in prices.

BWY is Malaysia’s largest baking supplies retailer with 92 outlets nationwide.

Speaking to Malay Mail, BWY chief executive officer Alexandre Rosso said the retailer tried to keep price increases to a minimum over the past two years.

Rosso said the Ukraine invasion, high freight costs and the weakness of the Malaysian ringgit increased pressure on global food supplies.  —  Picture courtesy of Bake With Yen
Rosso said the Ukraine invasion, high freight costs and the weakness of the Malaysian ringgit increased pressure on global food supplies. — Picture courtesy of Bake With Yen

“However, the situation with Ukraine, which is inflating global commodity prices even more, stubbornly high freight costs, and the weakness of the Malaysian ringgit have all put increased pressure on global food supplies,” Rosso said.

“This has led to rising input costs which all factor into the cost of goods sold.

“It became inevitable that we review prices.”

To address the impact, BWY launched a “Price Lock” campaign, giving bakers the opportunity to stock up on their baking essentials for a three-month period without burning a hole in their wallets.

The group also introduced a “Bulk Buy” programme for Ramadan and Hari Raya targeted at small businesses and home bakers as well as a “Price Cut” campaign on popular brands such as Anchor, Nutella and Oreo.

“We also expect the situation to normalise soon,” Rosso said.

“The number of Covid-19 cases is dropping, thanks to the high vaccination rates initiated by the government.

“This has put us on track for a new normal, making us confident that there will come a time when costs will come down.”

The home bakers who run Analia Cakes said customers accepted their recent price increase.  —  Picture via Instagram/Analia Cakes
The home bakers who run Analia Cakes said customers accepted their recent price increase. — Picture via Instagram/Analia Cakes

How bakers are responding to the price hikes

Alia Abd. Hanan and Azlan Muhammad of Analia Cakes had to increase their menu prices between five to 10 per cent to cope with the cost and maintain their quality.

Thankfully, most of their customers are aware of the rising costs of ingredients and have accepted it positively.

“This Raya season our customers are actually purchasing more from us compared to last year as we were under the MCO and no one was able to move or go anywhere especially heading back to their hometown respectively,” they told Malay Mail.

But if the high prices continue to go up, the Puchong Indah home bakers are worried people can’t afford food products which will lead to sales declining.

ButterBabe owner Hafizah travelled out of town to source for cheaper ingredients.  —  Picture via Instagram/ButterBabe
ButterBabe owner Hafizah travelled out of town to source for cheaper ingredients. — Picture via Instagram/ButterBabe

Hafizah Gafor who runs ButterBabe did not increase the price of her cookies and cakes because she understands the financial strain customers are facing.

“I was able to retain the prices of my baked goods by tapping into the profit margin to ensure customer satisfaction,” she said.

“Mostly as a hope in future if there’s a need to increase my pricing due to increased cost, my customers would be back for the premium quality.”

As a home baker, Hafizah usually buys ingredients when orders come in but she took a risk and purchased raw ingredients in bulk which is more cost effective.

“I also travelled back to my hometown and further places to scout for places that offer raw ingredients at lower prices,” she added.

Although Hafizah has been receiving more orders this Raya, as more Malaysians can balik kampung to visit loved ones, she’s worried if prices continue to soar, customers will limit buying baked goods as they’re not essential items.

“Especially during tough times, baked goods would be the last thing on their minds,” she said.

Sugar and I are worried they won’t be able to serve affordable yet delicious desserts if the price hikes continue.  —  Picture courtesy of Sugar and I
Sugar and I are worried they won’t be able to serve affordable yet delicious desserts if the price hikes continue. — Picture courtesy of Sugar and I

Sugar and I, which are known for their amazingly fluffy bomboloni and cream puffs, were hesitant to increase prices but didn’t have a choice.

A box of 10 filled doughnuts previously cost RM49 but their new pricing is RM58 for eight pieces featuring new flavours and a bigger size.

“We did strategise on ways to further enhance the value to our customers so that they see with the price hike, so did the size of our products and the improved packaging,” co-founder Syed Mohd Ilyas said.

“We had to announce our price hike and of course our customers weren’t too happy about it.

“It is mainly due to the price hike of all our ingredients.”

Ilyas added that people have been buying less this Raya compared to last year.

He is concerned that their bakeshop in SS14, Subang Jaya will lose sales if the situation doesn’t ease.

“Our mission of serving good, delicious desserts with affordable prices might be difficult to achieve,” Ilyas said.

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