Not only are prices for staples such as butter, cream, and milk rising, the increasing cost of ingredients such as spices, almonds, and sunflower seeds is forcing bakeries to either find savings, or raise prices.
Now, alongside myriad Covid-19 related pressures, some businesses fear the Russian invasion of the Ukraine could halve wheat production in the European breadbasket, driving up the price of flour globally.
Gilbert’s Fine Food co-owner Kevin Gilbert, of Dunedin, said hospitality and baking was always fairly thin on profit margins, and cost increases were quickly eating into earnings.
The price increases felt like being "batted from all directions", he said.
Both New Zealand and Australia had poor grain harvests due to bad weather, dairy prices were increasing due to a lack of supply worldwide, and the recent rise in petrol costs was a "double whammy"; it affected not only the cost of getting ingredients delivered to his business, but also the cost of delivering products to customers.
Kaye’s Bakery co-owner Evan Penniall, of Invercargill, said the Ukraine war had pushed up the price of sunflower seeds, grown in the war-torn area, while the increase in prices for the spices he used at the bakery had already increased between 9% to 47%.
"We’d be like every other bakery — it’s flour, it’s butter, it’s margarine.
"It’s just everything," he said.
Kai Pai Bakery manager Jason Danielson, of Wanaka, said he had already experienced two 10% price jumps in the last two months for flour.
Now he had been told to brace for another 10% price jump "very soon".
Oven Fresh Bakery owner Rob Olsen, of Gore, described himself as under "absolutely major price pressure", and said he had raised prices significantly for the first time in three years just a couple of months ago.
"There’s no hiding from it at the moment, that’s for sure."
"It feels like it’s been a perfect storm of price increases," Pembroke Patisserie co-owner Kirsty Schmutsch, of Wanaka, said.
"If you’re not being super efficient, then you’re wasting resources, and you’re wasting money," she said.
Jimmy’s Pies owner Dennis Kirkpatrick said the company, based in Roxburgh, was keeping a keen eye on flour prices.
But meat prices had already almost doubled, pies had gone up in price by 15%, and the company had stopped production on a variety of its gourmet lines to concentrate on the basics popular with their core customer base.
"We sort of reverted back to the 1950s and ’60s and catered for the Kiwis.
"At that period of time there wasn’t much in the way of tourism in New Zealand.
"Most of them were just Kiwis on the road."
"It’s sort of like a hot pie, a cream bun, a custard square ... a coffee’s taken over a milkshake."
Flour Millers Association secretary Andy Worrill said about 70% of the wheat used in flour production in New Zealand was imported, mostly from Australia.
Its members did not directly import wheat from Russia and Ukraine, but other countries did and they were now looking to Australia to bolster their supplies.
The increased demand from abroad, would push up prices here, he said.
Meanwhile, the owner of Body of the Year Bakery — which supplies bread to Dunedin cafes — Jed McCammon said while the price of just about everything else was increasing, for him the price of flour had been relatively stable.
However, the lack of people going out to cafes and shopping in town had softened demand for his product.
Business had been "pretty hard" for at least the last two years.
"We just have to adjust and work with it for a while. Hopefully things will improve," he said.
— Additional reporting RNZ
