In Germany, bread is a cultural asset. For many bakeries and bakeries, however, times have fallen on hard times. Some, unable to recover from the crisis due to the pandemic, faced the consequences of the war in Ukraine, the main of which is the increase in prices for raw materials and energy. Large bakery chains survive, while small family businesses are forced to close due to increased costs. Those who still somehow make ends meet ask for help from the state.
The 125-year-old bakery is no more
The most recent example is the fourth-generation family-owned bakery “Bäckerei Knipp” in the Oberkassel district of Bonn. Last Saturday, the bakery with 125 years of history opened for the last time and said goodbye to its regular customers, many of whom could not hold back the tears.
Nikolaus Knipp, the owner of the family business, 60, said the problems began during the pandemic, when the bakery’s regular customers – office workers, schoolchildren, hotels – began to work remotely or temporarily stopped working. “For them, we baked and delivered several hundred sandwiches daily, but during the pandemic, demand fell to one-quarter of pre-coronavirus orders. We barely made ends meet. Now the situation is exacerbated by increased prices for raw materials and energy due to the war in Ukraine” , – names the main reasons for the closure of the bakery Nikolaus Knipp in an interview with DW.
Many private bakeries live in anticipation of an increase in the minimum wage for unskilled workers, which will be 12 euros per hour from October 1. In addition, the minimum wage of employees, which is not subject to taxes, will rise from 450 to 520 euros. “Of course, this will also increase costs, as will the indexation of office space rent, which should be adjusted for inflation, which will affect the final price of bread and confectionery. Although customers show understanding for the price increase, in the end the bakery lives because customers buy bread and rolls every day. Now this is not the case,” Nikolaus Knipp shares his observations.
Neither of Knipp’s two adult sons is ready to continue the family business, especially in such difficult times. The father in such a situation has a simple logic: “Before I spend the funds and savings that I have earned by hard work for three or more decades, I would rather close my business and finish the few years left until retirement as a hired employee in some some other bakery. Nikolaus Knipp also made sure that his employees could get settled elsewhere.
Today, on the last day of the bakery’s opening, the cash register is closed. More than twenty varieties of buns and bread products are laid out on the counters. Buyers can decide how much they are willing to pay last for their purchases. The proceeds will go to charity – so decided a small team of employees of a private family business. Regular customer Anna-Maria Schlud says sadly: “I’ve been buying my buns and bread here for 18 years. They were the best in the area because they were always baked with love. Now I have to go to another bakery. I have a feeling that something very good and kind is leaving my life, a replacement for which will be very difficult to find.
The bakery in Bonn is no exception, but a worrying trend
Many private bakeries are forced to close, while others rely on government assistance. You don’t have to look far for examples. In early October this year, the Cologne bakery “Schlechtrimen” closed. Its owner Engelbert Schlechtrimen announced this on his Facebook page.: “These days Schlechtrimen turns 90 years old, 30 of them under my leadership. Unfortunately, this was the last anniversary.” Schlechtrimen calls the reason for closing the business crises: first – because of the pandemic, now – because of the war in Ukraine. Since the beginning of the year, the baker had to pay 45% more for raw materials than in the same period last year. In addition, there will be a 14% increase in personnel costs, which will increase in October. Added to these problems is the reluctance of customers to buy bread at high prices – they prefer to buy cheaper products in supermarkets.
Is the future of the industry at risk?
Experts agree that private bakeries with a long tradition will close if the current elderly owners, for one reason or another, cannot pass the business on to their children or grandchildren. It is easier for many to close a business than to end up in a debt hole in old age.
Younger entrepreneurs are not losing hope that they will be able to survive the current crisis. In times of crisis, many are forced to reduce their range of products – such as 47-year-old baker from Berlin Tobias Exner (Tobias Exner). He confirms that some businesses are under severe financial pressure. “All bakers have existential fears,” says the third-generation bakery manager and owner of several stores in Berlin and Brandenburg.
Reducing the range to reduce costs
Young entrepreneur Max Kugel from Bonn offers customers only bread, but – ten varieties. “Where there is only bread” (“Da wo’s nur Brot gibt”) – the slogan of his company, which is visible on each of the packaging bags. Ten varieties every day (no preservatives or baking mixes), no buns, no cakes, no croissants. The 32-year-old baker is considered a small business owner with eight permanent and five temporary employees. His business model is to focus on what matters most: bread.
“For those who do not adapt to the new conditions, it will be difficult,” emphasizes Max Kugel in an interview with DW. “Small village bakeries, for example, bake caraway bread, say, for the conditional Ms. Müller, and then put a few more seeds into the dough for Schmidt. This is extra work and costs that can and should be avoided, saving money and electricity.” His team in times of crisis successfully works under the motto “better less, but better.”
Is it possible to do without the help of the state?
The bakery industry in Germany has about 10 thousand enterprises, many of which are an extensive network of branches. A German family consumes an average of 56 kg of bread and pastries per year.
Everything would be fine, but production costs in the industry have increased this year by an average of 30 percent compared to pre-war times. Berlin-based baker Exner believes that rising energy and raw material prices have reached their maximum limit. 70 percent of bakeries run on gas, the price of which has already risen eightfold in some cases. And some bakeries have already used up their reserves during recent lockdowns. They can only hope for the help of the state.