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Let’s get real—When ingredient prices increase, our small businesses feel it, hard. Eggs already jumped 267%π³, and now flour and sugar are next. Why?
π’ Starting Tuesday, February 4th, new tariffs on imported goods—including key baking ingredients like sugar, dairy, and flour—will take effect. This means higher costs for our businesses, tighter margins, and a tougher road ahead for small business owners in the food industry.
But here’s the thing: just raising your prices isn’t a strategy—it’s a reaction. If you want to thrive in this economy, you need to get smart, scrappy, and strategic.
These new tariffs will directly impact your ingredient costs and operational expenses, making it more expensive to run your bakery, restaurant, or café. Here’s what you need to prepare for:
1οΈβ£ π Gas & Energy Costs – Higher fuel prices mean increased delivery fees from suppliers, as well as higher utility bills for businesses that rely on gas ovens and commercial refrigeration.
2οΈβ£ π Fresh Fruits (Especially Berries & Citrus) – Mexico supplies a huge portion of the berries and citrus used in baking. Expect a 25% price hike on strawberries, blueberries, raspberries, lemons, and limes.
3οΈβ£ π₯ Nuts (Pecans, Almonds, Walnuts, Pistachios) – These are often imported from Mexico and other countries, meaning costs will rise, affecting products like pecan pies, nut-based pastries, and granolas.
4οΈβ£ π₯ Dairy (Milk, Butter, Cheese) – Canada is a major supplier of dairy, and with new tariffs in place, expect significant price increases on butter, milk, heavy cream, and cheese—all essential for baking.
5οΈβ£ πΎ Flour & Wheat – Many wheat-based products are imported or influenced by global supply chains, which means bread, pastries, and other flour-heavy products will become more expensive to make.
6οΈβ£ π· Alcohol (Wine, Liquor, Spirits) – If your bakery or restaurant uses alcohol in recipes (like rum cakes, tiramisu, or cocktail-inspired pastries), brace for potential price jumps.
7οΈβ£ π¬ Sugar – A huge one! The U.S. imports a significant amount of raw and refined sugar from Mexico and Brazil. This will directly impact your cost for cakes, icing, cookies, and all sweet treats.
π‘ The Bottom Line: These new tariffs mean higher costs across the board, so NOW is the time to rethink your pricing, ingredient sourcing, and operational strategies to stay profitable.
BUT…Instead of stressing over things we can’t control, let’s focus on what we CAN do to keep our businesses strong, our customers happy, and our profits intact.
So “How Do You Keep Your Bakery Profitable Despite Rising Costs?” ππHere’s your game plan:
Yes, you need to adjust your pricing—but if your only strategy is continuously increasing prices, you’ll price yourself out of the market. Instead:
β
Introduce premium, high-margin offerings that justify a higher price.
β
Bundle products to increase perceived value.
β
Create limited-time specials that get customers excited to spend.
π‘ Example: Instead of just increasing cake prices, offer “Celebration Bundles” that include a cake, cupcakes, and a small freebie (like a handwritten note or mini cookies). Customers feel like they’re getting more, even if they’re paying slightly more.
When budgets tighten, people become pickier. They’re no longer spending money on “just okay” products—they’re looking for quality they can’t resist.
π©π³ Uplevel your best-sellers—Make sure every product you sell is worth raving about.
π Look at your customer reviews—What’s working? What could be improved?
π― Be intentional—Offer irresistible, high-quality products that people feel are worth the price.
π‘ Example: Instead of a basic chocolate chip cookie, create a thick, gooey, bakery-style cookie with premium chocolate chunks and sea salt. If people feel like they can’t live without it, they won’t stop buying!
This is not the time to play it safe. The most creative bakers will stand out. Ask yourself:
β What can I offer that no one else is doing?
β How can I surprise my customers and keep them engaged?
β What unique flavors, textures, or experiences can I introduce?
π‘ Example: My bakery started offering DONE FOR YOU Mother’s Day Gift Boxes during the pandemic because people were not able to shop, so we did it for them! We partnered with local businesses and curated a gift box with all of the things MOMS would want: Jewelry, candles, plants, cute hair ties, and tons of other fun things! We sold them for $150 each and ended up tripling our previous year’s Mother’s Day sales! Think experiences, convenience, and PROBLEM SOLVING for your customers!
You don’t have to sacrifice quality—but you CAN be smart about your ingredients.
π Is there a more affordable alternative? (Example: coconut sugar vs. refined sugar)
π Can you test different flours? (Example: a gluten-free or oat flour option)
π§ Can you use less of an expensive ingredient without affecting quality?
π‘ Example: Instead of a butter-based frosting, test a shortening or whipped ganache frosting that uses less butter but still tastes rich, delicious,s and premium.
Tariffs are hitting imported goods the hardest, which means local might be the best bet.
π― Find local suppliers for dairy, honey, nuts, and seasonal fruits.
πΏ Partner with local farms for fresh eggs and produce.
π° Buying local = lower transportation costs (and fresher ingredients!).
π‘ Example: If flour prices skyrocket, check with a local mill instead of just big-name distributors—you might be able to get a better deal!
Your vendors want to keep your business, so don’t be afraid to negotiate.
π¦ Buy in bulk to get better rates.
π€ Team up with other local businesses to place group/bulk orders.
π Ask about flexible payment plans to manage cash flow.
π‘ Example: When my bakery committed to buying butter in larger quantities from a national supplier instead of going to Walmart or Costco, we secured a bulk discount that saved us thousands over the years!
Some of the best businesses were built in economic downturns—why? Because the hustlers and problem-solvers found a way.
π₯ Ask yourself: How can I get creative?
π₯ What new revenue streams can I create?
π₯ How can I maximize every single sale?
π‘ Example: My bakery started offering corporate treat boxes and employee appreciation gifts for local corporations/offices. After we did business with them once, they became regular repeat customers who brought in more business every single month!
Now is NOT the time for wasted ingredients, wasted time, or wasted money.
π Streamline your processes—Can you prep ingredients in bulk?
π Reduce waste—Use leftover croissants for bread pudding, day-old cake for cake pops.
π Train your team—Efficiency is key when labor costs are rising!
π‘ Example: During the pandemic, my bakery was forced to batch production all in two days. Whether it’s cakes, cookie dough, macarons, or bagels, find ways to make larger batches, then freeze portions. This ONE THING cut down my labor costs by 50%!
*Did you also know that batters and frostings can be made ahead of time and then frozen for future use?! Test/try your recipes and see if this works for you!
If you’re doing everything manually, you’re wasting valuable time.
π§ Automate emails for abandoned carts or reminders.
π Schedule social media posts so you’re always visible.
π Use AI for efficiency—No more overthinking! *I’ll be hosting a training on AI soon, so get on the waitlist here! utilizes automatic order confirmations & text reminders saves HOURS every week on customer service!
π‘ Can you collaborate with a local coffee shop? (Sell your pastries there!)
π‘ Can you partner with a local event planner? (Be their go-to bakery!)
π‘ Can you offer baking classes? (Extra income + builds customer loyalty!)
π₯ The bakers who think differently will be the ones who not only survive—but THRIVE.
People get it—they know inflation is hitting every American, not just food industry businesses. But if you don’t educate them, they might assume you’re just randomly raising prices.
π’ Use in-store or online signage to explain price changes.
π’ Show behind-the-scenes content of rising costs. (Like shopping at Costco for eggs at the current price. NOTE: Don’t complain about it, just educate.)
π’ Position yourself as the BOSS—Help them understand WHY you have to make these decisions as a business owner.
π‘ Example: During the Vanilla PRICE HIKE, I shared a "Day in the Life of a Baker" reel, breaking down the cause for the price increase educating my customers on how it impacted our products/business, and it got SO much support from customers—they actually started buying MORE to help out!
We’re in this together, bakers, coffee shop owners, and restaurant owners. If we don’t educate our industry, the ones who don’t price correctly will drag everyone else down.
π’ Share this post with someone in the industry.
π’ Talk about pricing in your bakery groups.
π’ Help your fellow small business owners understand their numbers!
π We either rise together, or we struggle separately. Let’s choose to rise!
This is not the time to panic or make things political—it’s the time to pivot, strategize, and get smarter than ever! The ones who innovate, plan, and educate will come out even STRONGER!
π‘ This isn’t just about price increases—it’s about strategy. You don’t have to navigate these challenges alone! Join me inside Power Hour, my monthly live coaching session where we break down real-time business struggles, brainstorm creative workarounds, and make sure you’re not just surviving—but thriving in this economy.
π₯ Want help pricing your products and making smart moves in your business? Join Power Hour now, and let’s tackle this together! Click here to sign up!
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