The Sunday News
Dickson Mangena, Business Reporter
AT least 20 small and medium bakeries have shut down since the beginning of the year owing to reduced capacity triggered by decreasing demand in bread and other operational challenges, an official has said.
In an interview, National Bakers Association of Zimbabwe president Mr Givemore Mesoemvura said in the last six months about 15 to 20 small-scale bakeries around the country closed down for different reasons, chief among them decreasing demand from consumers.
He said due to the decreasing incomes, bread demand has also gone down from around one million loaves a day to 850 000 in the past two years.
“People have low disposable incomes, and bakeries depend on selling bread and if they don’t sell bread their businesses close.
The demand for bread has dropped from about a million in the past two years to 850 000 loaves a day in the last six months and this has affected mostly small-scale bakeries,” he revealed.
He said the economic challenges that were affecting the industry in general were also prevalent among bakeries.
“Also in our analysis from operation by operation we found out that some of the bakeries closed down because of debts and also some from not being competitive enough. It is hard for these small bakeries to retool and be competitive enough against other bakeries like the big three,” said Mesoemvura.
The Zimbabwe bread market is dominated by Bakers Inn, Lobel’s and Oceans. The companies have been increasing their capacity and investing in new machinery resulting in bread prices going down from a $1 to around 80 cents a loaf. The competition has among other things pushed the small players out of the market. Mr Mesoemvura said the small bakeries were also being affected by poor product quality.
“You can now see the difference in the bread that was consumed in 2012 and the bread that people prefer to consume now.
People eat high quality bread now. That is why the membership of our small-scale bakeries that used to produce low quality bread has decreased since then. We had a membership of 300 small-scale bakeries back then, but as we speak we are down to less than 100,” the NBAZ president said.
Bulawayo Retailers Association secretary Mr Simba Phiri said most retail shops were recording low bread sales compared to last year. He said in some cases bread sales have gone down by more than 80 percent, indicating that more people were no longer buying the commodity.
“I recently spoke to a woman who owns a retail shop and she said that she used to sell about 100 loaves of bread a day but now it has gone down to 20 loaves. Maybe it is because bread is now a luxury as people would rather buy cheap alternatives like mbambayila,” said Mr Phiri.
He also said the demand for low quality bread from bakeries has dropped as most retailers now produce this low quality bread in-house.
“Also the demand for bread has affected our business very much as bread is seen as a motivator for people to go into shops and in the end they end up buying other commodities like eggs and butter,” said Phiri.
Consumer Council of Zimbabwe Matabeleland regional manager Mr Comfort Muchekeza said people have reduced bread uptake not because of availability of alternatives but because they do not have the money.
“People have no money to buy bread, even if they have salaries they struggle to get their salaries into their hands because of the liquidity crunch. Some companies are even failing to pay their workers for months and civil servants salary dates are also being staggered,” said Mr Muchekeza.
He also blamed some of the bakeries for producing sub-standard bread and failing to adapt to competition.
“We understand that from 2009 bread used to cost a dollar and at some point it went down to $0,90. This became a challenge for smal-scale bakeries who could not afford to reduce their bread prices to $0,90 because all the ingredients of baking bread were still at the same price,” said Mr Muchekeza.
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