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Why Gluten Free Bakery Products are Expensive?

Unfortunately it is fact that gluten free bakery products are expensive than conventional products. There are several effects that shape the expensiveness derived from cost structure. These effects are explained briefly below. In fact, when these effects are assessed, it will be highly accepted that almost no cost effect originated from gluten free bakeries exist. Before explaining the effects, it will be reasonable to mention about reliability and consistency on pricing of gluten free products. When like to like price comparisons (1 kg gluten free product with 1 kg gluten including one) are made, it is simply understood that gluten free product is expensive than conventional one. However, when price/cost parities are compared it will be understood whether expensiveness degree of particular product is reliable and consistent or not. In order to simply do that, the relation (parity) between cost of flour and sale price of the product made with that flour should be calculated. As the parity increases, reliability and consistency of price decreases. But this is true when same kind of products (like to like) are compared. Parity of bread should not be compared with parity of bagel or pretzel. For example, parity of 1 kg artisan style white wheat bread should be compared with parity of 1 kg artisan style gluten free white bread made with white gluten free flour mix (usually containing white rice and starches) sold in markets. The parity of any particular baked good can be simply calculated by dividing bakery sale price of baked product by the market shelf price of the flour used for that bread. 

Reasons of The Expensiveness

High Cost Of Gluten Free Raw Materials

Unfortunately, gluten free raw materials are quite expensive than gluten including rivals. Cereals (wheat, barley, rye) are staple foods that are most grown and supplied raw materials around the world. Since they are important for nutrition of world population, cereals are highly subsidized by governments and most agricultural scientific efforts are made on them. These circumstances make fertility of cereals to be higher than other agricultural products and cheapness of them. 

Gluten free agricultural raw materials are grown and supplied in fewer quantities. Besides, fertility per area is lower and there is almost no government subsidization on gluten free agricultural products. In addition to this, the millers should invest on isolation of gluten free mill rooms from gluten containing ones in order to prevent any gluten contamination of gluten free flours. This means additional cost which will be charged on price of gluten free flours. 

Since gluten provides structure of baked goods, when it is absent it should be replaced with extra materials called gluten replacers (hydrocolloids, gums, concentrated proteins etc.). Prices of whole these replacers are so expensive. Although they are used in fewer quantities, their weight on cost of gluten free baked products is quite influential.

Before explaining the effects, it will be reasonable to mention about reliability and consistency on pricing of gluten free products.

High Cost Of Gluten Free Raw Materials

Although gluten free products are popular recently, their market share is quite lower than gluten containing rival’s. Low consumption makes economies of scale work. Economies of scale are the cost advantages that occur as a result of increasing the size of a business or vice versa (disadvantages for decreased size of a business). For example, if fixed costs are divided by less number of produced bakery good, the cost per each product will be higher.

Artisan Bakery Operation

Basically there are two types of bakery production style. First is the industrial production style including serial production of limited type of products with huge numbers. Public Bakery of Municipality (such as İstanbul Halk Ekmek, Ankara Halk Ekmek) is a good example of this production style. These bakeries have limited gluten free product range, but produces huge number of a single item. This makes costs to decrease but flavor potential to be lost.

Second is the Artisan production style includes quite opposite of serial production style. Artisan bakeries have lower production area and capacity but produce wider product range having products made with artisanal manual works and production techniques. Artisanal manual work makes increase in labor cost. Techniques like long extended fermentation include fermentation of dough at 4-10 Celsius. This means additional chiller investment cost and additional energy consumption cost.

Prevention of Gluten Contamination in Bakeries

Gluten free and gluten containing food materials should not be used or even kept together at same production site in order to prevent gluten contamination for people who suffer from gluten related disorders. Gluten contamination may occur even gluten containing food materials are stored in same warehouse.   

This makes gluten free bakeries not to produce gluten containing bakery products and to give up profits that can be potentially made from them. So, in this situation fixed costs are divided into fewer gluten free products and makes increase in their unit costs.  

Any product accepted as gluten free like buckwheat flour may contain trace amount of gluten (or more) due to contamination during milling. In order to prevent uncertainty, products that have labels specified as gluten free should be used. This label means confirmation of product about not having gluten contamination by its producer. However, confirmed or certified gluten free products are expensive than others. 

Long story short;

As a result, high gluten free flour and gluten replacer prices, high share of fixed costs per product, additional costs due to artisan style production (labor, energy etc.) make prices and even in some circumstances the product price/cost parity  of gluten free products more than gluten containing rivals. As the gluten free products become more popular, it is foreseen that cost of gluten free raw materials will decrease due to increase in supply and competition. This will make gluten free products cheaper. 

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