Farmers and bakers have faced significant challenges over the past few years. In 2016, U.S. wheat flour consumption dropped to its lowest point in nearly three decades. Moreover, American farmers planted the smallest winter wheat crop in over a century. As supply and demand dynamics dictate, those farmers who managed to produce high-protein winter wheat are now charging a premium for their product. This increased cost is transmitted through the production chain, ultimately affecting bakers. However, bakers have largely struggled to raise prices for their rolls and loaves due to decreased consumer demand. If there’s another season marked by a scarcity of high-protein wheat, the average price of a loaf of bread could rise.
To adapt, bread manufacturers have been reformulating their recipes to utilize the less expensive low-protein wheat. By incorporating gluten—whose price has surged by 20% due to high demand—many bakers can maintain the light texture that consumers expect. Yet again, they are left to absorb the expenses related to research and development, along with the more expensive gluten. High-protein winter wheat represents about 40% of the $10 billion U.S. wheat crop. Wholesale bakers such as Grupo Bimbo, Flowers Foods Inc., and Campbell Soup Co.’s Pepperidge Farms have already experienced a decline in profits. The pressure on their margins will persist until a substantial crop of high-protein winter wheat is harvested.
Interestingly, if bread sales decline due to this shortage, it could create opportunities for manufacturers producing bakery items without wheat flour, like Udi’s and Food for Life. Additionally, alternative flours such as brown rice and millet varieties may see a surge in demand. As consumers seek options that offer nutritional benefits, products that celebrate ingredients like calcium and chewable alternatives could become increasingly popular. Thus, while bakers navigate these turbulent times, the market may shift towards celebrating diverse and nutritious bakery products.