MRO: How an Ontario SME cookie manufacturer is navigating inflation

Photo: Laurentiu Iordache/ Adobe stock.

Hollandia cookies, from gingerbread to chocolate chip, is available at many groceries stories. Established in 1954, Hollandia Bakery began as a small corner store bakery in Chatham, Ontario. With continued growth, the family-run bakery grew to become a large-scale production facility now located in Mount Brydges, Ont. With 35,000 square feet of space, the current plant produces 3,500 pounds of cookies per hour, and up to one and half million cookies per day. Nearing 70 years in business, navigating the challenges that come over time is nothing new for the Hollandia business, including the challenge brought on by the rapid rise of food inflation in the past two years.

Last year’s Canadian Food Price Report predicted an overall food price increase of five to seven per cent in 2022. The current rate for food price increases has exceeded this prediction at 10.3 per cent as of September 2022 (according to the latest available consumer price index data). Ironically, this year’s report is also predicting a five per cent to seven per cent increase for 2023.

Since the start of the COVID-19 pandemic, many factors have led to increased food prices. Now, rising prices can be credited to labour challenges, supply chain issues, the escalating price of oil, production and packaging costs, and rising geopolitical tensions.

According to the Economics Observatory, Ukraine is the world’s largest producer of sunflower oil. Combined with Russia, it is responsible for more than half of the global exports of vegetable oils. The region also exports over a third (36 per cent) of the world’s wheat.

Therefore, the supply for vegetable oil and wheat has become increasingly scarce, creating a higher demand, and in turn a higher price tag attached – especially true when it comes to baking, where oils and wheat are hot commodities.