Download Bako Bite December 2012 - Bako Western

Final Festive Thoughts For December
• Trading Terms Update • Market Update • Cake Mix Upgrade •
• Christmas Delivery Details • Stuarts Summary •
TRADING TERMS UPDATE
The tonnage growth reported in our November edition has continued with 8 out of
the last 9 weeks exceeding the equivalent week in 2011. This is mainly due to increased
commodity sales (sugar and flour) which has slightly reduced our value per Tonne but
not enough to prevent Turn Over growth in 7 out of the last 9 weeks. This is a most
welcome turn-round after the poor Turn Over trends experienced during the peak
summer period.
October financial performance benefited from an improved margin as well as Tonnage
and Turn Over growth. This resulted in a record profit which has substantially improved
our 8 month cumulative position.
This strong performance is a reward for our sales team who have battled valiantly
against poor market conditions throughout most of the year. We as always remain
confident we will achieve our target of a 2% annual rebate to members who
consistently pay to terms plus continue to fund our 2% early payment discount option.
MARKET UPDATE
Commodity prices and currency exchange levels continue to fluctuate. Significant
changes in the last month are listed below:-
Currency: The £ has failed to regain the heady heights achieved in July of over €1.28
to the £. Throughout November it has traded between €1.24 – 1.26 but at the time
of writing (26.11.2012) has weakened to €1.235.
Against the $US November has also been fairly stable with the £ trading within the
range $1.59 - $1.61 and currently stands at $1.60.
Oil: Crude has traded throughout November within the range $85 - $88 per barrel and
currently stands at $88. This stability has resulted in a small reduction in petrol and
diesel prices from their recent peak in September. No further reduction is expected with
increases remaining probable in the New Year unless the government postpones the
planned fuel escalator tax change.
Egg: Supply has held up better than expected which has delayed the anticipated
price increase which has been applied in Europe reducing cheap imports to the U.K.
The lack of retail demand for shell egg over the Christmas period may release further
product for processing but a price increase by the end of January is almost inevitable
due to the rise in feed costs following the poor grain harvest.
Sugar: Stock from the sugar year ending 30th September 2012 is now nearly
exhausted and market prices have or are about to increase by £20 - £30 per Tonne.
We noted the article in last weeks British Baker predicting a further E.U. sugar shortage
in the spring of 2013 but do not believe this will cause supply contracts to be broken
as occurred in the autumn of 2010 and spring of 2011.
A dramatic market movement is therefore not expected.
Dried Fruit: As outlined in our November edition Turkish Sultana prices have eased
and we can now offer our Gold Seal Bako brand at a reduced list of £19.75. Currant
prices remain stable at list £28.95 with a limited stock available of superb quality
South African Safari brand currants at list £30.85. Raisin prices have firmed slightly with
Californian’s now at list £28.85. As always discounts are available on all the above
prices for 10 unit or pallet purchase.
Flour: In addition to the floods and mud deposits from the recent monsoon, it would
be fair to say the brown stuff has now hit the fan regarding the poor quality of the U.K.
wheat harvest. Increased prices are being applied by all millers to cover the cost of
importing continental and Canadian wheat to blend with the poor quality British grain.
We have been able to hold the £7.50 standard Bako Bread Flour list price (plus £7.80
for Strong & £7.70 for Wholemeal) published in our last edition due to contracting
European supply some months back. UK branded flours will increase with effect from
1st December as listed in the enclosed supplement. The prices quoted should remain
stable until Easter.
Tuna: Tuna list price remains stable at £42.95 (6x1.88kg) and we remain hopeful of
a small reduction in the New Year. Nothing can be guaranteed however as it is all
dependant on catch levels and there is always the risk about the one that got away!
Dairy As outlined in our November edition butter prices have increased considerably
higher than we expected over the last 2 months. Due to current low milk supply little
butter is being produced at the moment. This means the market is relying on stored
product being released from private storage which was manufactured at the end of
2011 when prices were high. Some price reduction is expected by February but it is
unlikely the dramatic falls of 9 months ago will occur. Contracts for New Zeeland butter
are available for February delivery but only at current prices. This means significant
price movement is unlikely to occur before milk volumes increase following new season
grass (obviously weather dependant) and spring calving.
As published last month we still have a limited stock of Skim Powder at list £59.95 and
Whey Powder at £28.20 per bag purchased prior to the autumn market increases.
CAKE MIX UPGRADE
One unwelcome implication of the poor quality wheat harvest is the risk of poor
performing mixes containing flour. To reduce the risk of this difficulty we have made
a small specification change to our new cake mix range. The initial products effected
are Farmhouse, Madiera and Carrot. Anyone wishing a copy of the updated
specifications please contact Gill on 01884 831431 for details.
CHRISTMAS DELIVERY DETAILS
Please see our Christmas delivery details on page 2. These are similar in principle to
the last 8 or 9 years whereby every member loses one delivery over the Christmas and
New Year holiday period. If the revised delivery plan causes any member a specific
problem please notify your Customer Services contact and alternative arrangements will
be made wherever possible.
STUARTS SUMMARY
In previous years our December Bako Bite’s have tended to be slim volumes of only
12 pages reflecting the limited promotional activities of the main bakery suppliers.
This year however we present you with a full 20 pages including offers from Dawn,
Macphie, Puratos and Bakels plus further developments in our own label range. Our
hope is this increased activity reflects a determination from our suppliers to end 2012
on a high note and hopefully continue this level of commitment through 2013.
After what has been a challenging (in other words difficult) year there appears to be
an increasing level of optimism in many parts of the trade. Our October performance
has been heartening plus feedback from members has recently been more positive.
It seems therefore appropriate to recount an uplifting tale from a building development
just East of Exeter of a heart-warming bond formed between a little girl and a group
of builders…..
A young family moved into a house next door to an empty plot. One day, a gang of
building workers turned up to start building on the plot. The young family’s 5-yearold
daughter naturally took an interest in all the activity going on next door and started
talking with the workers. She hung around and eventually the builders all with hearts
of gold, more or less adopted the little girl as a sort of project mascot. They chatted
with her, let her sit with them while they had tea and lunch breaks, and gave her little
jobs to do here and there to make her feel important.
They even gave the child her very own hard hat and gloves, which thrilled her
immensely.
At the end of the first week, the smiling builders presented her with a pay envelope -
containing two pounds in 10p coins. The little girl took her ‘pay’ home to her mother
who suggested that they take the money to the bank the next day to open a savings
account.
At the bank, the female cashier was tickled pink listening to the little girl telling her
about her ‘work’ on the building site and the fact she had a ‘pay packet’.
‘You must have worked very hard to earn all this’, said the cashier. The little girl proudly
replied, ‘Yes. I worked every day with Steve and Wayne and Mike. We’re building a big
house.’
‘My goodness gracious,’ said the cashier, ‘And will you be working on the house again
next week?’
The child thought for a moment. Then she said seriously:
‘I think so. Provided those ******* at Jewsons deliver the ******* bricks on time.’
This just leaves me on behalf of the Directors and all the staff at Bako Western to wish
all members, their families and staff a ‘Happy Christmas’ and of course a ‘Prosperous
New Year.’