Illustrative case study · Private Equity

On formulas, bakeries pay up. The basics go on an index.

Procurement leaders at commercial bakeries decide whether an ingredient supplier’s next cost increase sticks. A private equity investor bidding for a supplier needed to know if their orders would keep growing. We interviewed 150 of those leaders and had the report ready in 11 days.

Illustrative scenario

Samplen = 150

Illustrative report

Commercial Bakery Ingredient Volume Outlook

Will bakeries keep growing their orders if their ingredient supplier passes on its next cost increase?

Study architecture

Size the volumeNext year’s ingredient volume by end product, weighted by spend

Price it twiceThe same 5% increase on formula ingredients and on commodities

Find the triggersWhat makes a bakery switch, and what a switch costs in test bakes

Scope

A price rise means something different for an ingredient written into a formula than for flour or sugar.

Sample

150

Procurement leaders who approve ingredient suppliers at commercial bakeries.

Research by

Study typePricing study

ScenarioIllustrative

Bakery ingredient outlook · Executive reportExecutive summary

Executive summary

Bakeries will absorb a rise on formula ingredients and want index pricing for the basics

The 150 procurement leaders at large and mid-size bakeries expect ingredient volume to grow 3% next year, led by tortillas and frozen goods. Asked to price the same 5% increase twice, 74% would accept it on formula ingredients and 30% on flour, sugar and oils. Switching a formula ingredient took a median of four test bakes at the last change, against one for a commodity.

+3%n = 150

expected ingredient volume growth next year

74%n = 150

would take a 5% rise on formula ingredients

30%n = 150

would take a 5% rise on flour, sugar and oils

62%n = 150

would accept index-linked commodity prices

Figures rounded. Base n = 150 procurement leaders unless stated.

Top lines

1Tortillas and frozen lines carry next year’s ingredient growthVolume outlook by end product03

2Bakeries take a 5% rise on formula ingredients and shop the basicsThe same increase, priced twice04

3Most bakeries would accept commodity prices tied to an indexIndex-linked pricing for flour, sugar and oils05

4Missed deliveries trigger switches, and test bakes slow themSwitch triggers and the cost of switching06

5Sample, screener and quality controlWho we interviewed and how07

AAppendixQuestion flow and data tables09

Sample

150 procurement leaders

Segments

80 large, 70 mid-size bakeries

Method

AI-moderated interviews, paired price questions

Markets

US commercial bakeries

Illustrative report. The company, scenario, and all figures are fictional.

Illustrative report02

Illustrative reportExecutive summary

Illustrative example. The company, scenario, and all figures are fictional. They show UserCue’s method and deliverable format. They do not come from any client study.

The engagement

Delivered in

days, with the report, the data file and a live readout.

Interviews

150

Procurement leaders who approve ingredient suppliers.

Audiences

80 large bakeries and 70 mid-size bakeries.

Method

Forecast

Volume by end product, and one 5% rise priced on formulas and basics.

The brief

Client

A private equity investor

Decision

Whether a bakery ingredient supplier can pass on cost increases and keep growing

Stage

Volume outlook, before a bid

How we ran it

Approach

AI-moderated interviews with paired price questions

Measured

Volume by end product, cost pass-through, switch triggers

Sample

Large bakeries with three or more plants and mid-size bakeries

Headline figures

Volume+3%

ingredient volume growth expected next year, weighted by spend

Formula lines74%

would take a 5% rise on formula ingredients without seeking quotes, against 30% on flour, sugar and oils

Index pricing62%

would accept flour, sugar and oil prices tied to a published index

The question

Will bakeries keep ordering more if the supplier passes on its costs?

Steady volume, and a margin squeezed by rising input costs: that was the supplier the investor was bidding for. The bid rested on what the people who approve ingredient suppliers, at large and mid-size bakeries, expect of next year’s volume and how much of a cost increase they would absorb.

Which end products will grow bakeries’ ingredient volumes next year?

How much of a supplier’s cost increase will bakeries absorb?

What would make them switch ingredient suppliers?

What we did

How the study ran, start to finish.

1Kickoff
A bid that hinges on pass-through.
Will bakeries keep growing their orders if the supplier we buy passes on its next cost increase? The kickoff turned it into three questions: which end products will grow volume, how much of an increase bakeries will absorb and what makes them switch.
2Design
Two tiers, one rise priced twice.
Every respondent approved ingredient suppliers for their bakery: 80 at large bakeries with three or more plants, 70 at mid-size ones. Each priced the same 5% increase twice, once for ingredients written into their formulas and once for flour, sugar and oils.
3Fielding
150 buyers, test bakes counted.
Quant and qual ran together by voice or text, median 21 minutes, and anyone naming a switch trigger was asked how many test bakes the last switch needed. The researcher read all 173 and removed 23 for contradictions or experience outside bakery ingredients, leaving 150.
4Analysis
A recipe change outweighs the rise.
The researcher laid both pricings side by side: bakeries tolerate more wherever a switch would mean new test bakes and a changed formula. 74% would take a 5% rise on formula ingredients without new quotes, more than twice the share on flour, sugar and oils.
5Readout
On formula lines, 74% take a 5% rise.
The researcher took the investor and its operating partner through a 35-page report at a live readout, opening on the volume model by end product. The deal model passes the next increase through on formula lines and indexes flour, sugar and oils.

What we found

Four findings from the report.

Summary

Bakeries expect ingredient volume to grow 3% next year, led by tortillas and frozen goods. Acceptance follows the cost of switching: 74% would take a 5% rise on formula ingredients, more than twice the 30% on flour, sugar and oils. For those basics, 62% would accept prices tied to a published index.

Bakery ingredient outlook · Executive reportTop line 1

Top line 1 of 4

Tortillas and frozen lines carry next year’s ingredient growth

¹ Q8. For each product you make, how will your ingredient volume change next year? Percent change, spend-weighted, n = 150.

² Formula ingredient use per line is directional; see the appendix tables.

Bakeries gave next year’s volume line by line for each end product they make. Weighted by ingredient spend, they expect volume to grow 3%, with tortillas and flatbreads at +8% and frozen and par-baked goods at +6%¹. Sweet goods add 2%, buns and rolls hold flat and sliced bread slips 1%. Large bakeries plan more frozen volume, mid-size bakeries more tortillas.

+3%spend-weighted

all ingredients, next year

+8%spend-weighted

tortillas and flatbreads

+6%spend-weighted

frozen and par-baked goods

−1%spend-weighted

sliced bread

Bakeries planning more volume next year, by end product

Plan more volume next year, multi-select (n = 150)

Plan more frozen volume, by tier

Plan more tortilla volume, by tier

Expected change asked per end product the bakery makes, then weighted by each bakery’s ingredient spend on that line. Planning more volume is multi-select across lines; shares do not sum to 100.

Supporting evidence

Tortilla plans come most from mid-size bakeries: 56% plan more tortilla volume, against 35% of large bakeries. § 3.2
Frozen and par-baked lines use more dough conditioners and enzymes per pound than sliced bread. § 3.3²

Illustrative report03

Bakery ingredient outlook · Executive reportTop line 2

Top line 2 of 4

Bakeries take a 5% rise on formula ingredients and shop the basics

¹ Q15 and Q16. If your supplier raised prices 5% on formula ingredients, or on flour, sugar and oils, what would you do? Single select, n = 150.

² The second-source effect is directional; base shown in the appendix.

Priced twice, the same 5% increase splits by ingredient type. 74% would accept it on ingredients written into their formulas without seeking quotes, against 30% on flour, sugar and oils¹. The split tracks switching cost: the last switch of a formula ingredient took a median of four test bakes, against one for a commodity (top line 4).

74%n = 150

would accept a 5% rise on formula ingredients

30%n = 150

would accept a 5% rise on flour, sugar and oils

77%n = 70

of mid-size bakeries accept on formula lines

21%n = 80

of large bakeries accept on commodities

Would accept a 5% increase without seeking quotes, by ingredient type

Would accept a 5% increase without seeking quotes

At a 5% rise on formula ingredients (n = 150)

AcceptSeek quotesSwitch supplier

At a 5% rise on commodities (n = 150)

AcceptSeek quotesSwitch supplier

The same 5% increase was priced twice, in random order: once for ingredients written into the bakery’s formulas, once for flour, sugar and oils. Accept means without seeking quotes from another supplier.

Supporting evidence

Mid-size bakeries accept more on both lines, 77% and 40%, against 71% and 21% at large bakeries. § 4.2
Large bakeries with a second qualified source for a formula ingredient accept less, close to the commodity rate. § 4.3²

Illustrative report04

Bakery ingredient outlook · Executive reportTop line 3

Top line 3 of 4

Most bakeries would accept commodity prices tied to an index

¹ Q17. Would you accept flour, sugar and oil prices tied to a published commodity index? Single select, n = 150.

² Acceptance with a cap on each reset is directional; see the appendix.

On flour, sugar and oils, bakeries resist a flat increase and accept a price that moves with the market. 62% would accept commodity prices tied to a published index¹, large bakeries most of all at 68%, against 56% of mid-size bakeries. Most want the index reset each quarter.

62%n = 150

would accept index-linked commodity prices

68%n = 80

of large bakeries would accept an index

56%n = 70

of mid-size bakeries would accept an index

55%n = 150

want the index reset each quarter

Would accept flour, sugar and oil prices tied to a published index

Would accept index-linked commodity pricing

How often the index should reset (n = 150)

Each quarterTwice a yearOnce a year

Already buy commodities on an index

Index-linked pricing described as a price that moves with a published commodity index, reset on a fixed schedule. Asked of all 150 after the paired price questions.

Supporting evidence

Bakeries that already buy on an index are the most willing to extend it: 85%, against 49% of the rest. § 5.2
Mid-size bakeries worry most about a sudden reset; a cap on each reset raises their acceptance. § 5.3²

Illustrative report05

Bakery ingredient outlook · Executive reportTop line 4

Top line 4 of 4

Missed deliveries trigger switches, and test bakes slow them

¹ Q23. Which of these would make you switch an ingredient supplier? Multi-select, n = 150.

² Q30. How many test bakes did your last change of supplier need? Asked by ingredient type.

Missed deliveries are the most common reason to switch, named by 66%, ahead of uneven quality between lots at 49% and a price rise above budget at 41%. The last switch of a formula ingredient took a median of four test bakes; a commodity switch took one¹. At a 5% rise on formula ingredients, 5% would switch supplier (top line 2).

4median

test bakes to switch a formula ingredient

1median

test bake to switch a commodity

66%n = 150

would switch over missed deliveries

41%n = 150

would switch over a price rise above budget

What would make a bakery switch ingredient suppliers

Would switch supplier over, multi-select (n = 150)

Top three triggers, large bakeries (n = 80)

1Missed deliveries
2Uneven quality between lots
3A price rise above budget

Top three triggers, mid-size bakeries (n = 70)

1Missed deliveries
2A price rise above budget
3Uneven quality between lots

Triggers multi-select; shares do not sum to 100. Test bakes counted from each leader’s last change of supplier, by ingredient type; medians shown.

Supporting evidence

A label change for a reformulated product adds to the cost of switching a formula ingredient. § 6.2
A price rise above budget weighs more for mid-size bakeries, which rank it second. § 6.3²

Illustrative report06

Top line 1 of 4 · page 03Illustrative report · top line 1 of 4 · swipeIllustrative report

Question 1 · Volume

Tortillas and frozen lines carry next year’s growth.

Weighted by ingredient spend, bakeries expect volume to grow 3% next year. Tortillas and flatbreads lead at +8% and frozen and par-baked goods follow at +6%, while sliced bread slips 1%.

+3%all ingredients, next year

+8%tortillas and flatbreads

Expected change in ingredient volume, spend-weighted · n = 150

Question 2 · Pass-through

On formula ingredients, bakeries take a 5% rise.

74% would accept a 5% increase on ingredients written into their formulas without seeking quotes, against 30% on flour, sugar and oils. Mid-size bakeries accept more on both.

74%formula ingredients

30%flour, sugar and oils

Would accept a 5% increase without seeking quotes · n = 150

Question 2 · Commodity pricing

Most would take commodity prices tied to an index.

62% would accept flour, sugar and oil prices tied to a published commodity index. Large bakeries, more of whom already buy on an index, are more willing at 68%, against 56% of mid-size bakeries.

All bakeries62%

Large bakeries (n = 80)68%

Mid-size bakeries (n = 70)56%

Would accept index-linked commodity pricing · n = 150

Question 3 · Switching

Missed deliveries trigger switches; test bakes slow them.

Missed deliveries lead the switch triggers at 66%, ahead of uneven quality between lots at 49%. The last switch of a formula ingredient took a median of four test bakes; a commodity switch took one.

Missed deliveries66%

Uneven quality between lots49%

A price rise above budget41%

Better terms from a rival17%

Reasons to switch supplier · multi-select · n = 150

“Flour I can buy from three mills by Friday. Change the enzyme in our buns and I’m running test bakes for a month.”

Procurement director · Illustrative quote

Illustrative quotes

Three themes behind the numbers.

Formula lines

“A few percent on the dough conditioner, I grumble and pay. Requalifying a new one ties up the line and the lab.”

Purchasing manager

Commodities

“On sugar and oil we watch the market every day. A flat increase from a supplier gets a round of quotes.”

Commodity buyer

Index pricing

“Tie it to an index and reset it each quarter. Then I can explain the price to my finance team.”

Head of procurement

What the investor did

Three moves made with the report.

1The margin case · from finding 2

Modeled full pass-through on formula lines.

In the deal model, formula ingredients carry the next cost increase in full: 74% of bakeries would take a 5% rise on them without seeking quotes.

2The contracts · from finding 3

Planned index pricing for commodity lines.

The plan moves flour, sugar and oils to contracts tied to a published index, terms 62% of bakeries would accept, with a reset each quarter.

3The growth plan · from finding 1

Aimed formula sales at tortilla and frozen lines.

New sales targets favor bakeries growing tortillas and flatbreads (+8%) and frozen and par-baked goods (+6%), the two fastest-growing lines.

Illustrative example. The company, scenario, and all figures are fictional. They show UserCue’s method and deliverable format. They do not come from any client study.

Bring us your next pricing question.

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Switching study

How the study ran, start to finish.

1Kickoff

A bid that hinges on pass-through.

Will bakeries keep growing their orders if the supplier we buy passes on its next cost increase? The kickoff turned it into three questions: which end products will grow volume, how much of an increase bakeries will absorb and what makes them switch.

2Design

Two tiers, one rise priced twice.

Every respondent approved ingredient suppliers for their bakery: 80 at large bakeries with three or more plants, 70 at mid-size ones. Each priced the same 5% increase twice, once for ingredients written into their formulas and once for flour, sugar and oils.

3Fielding

150 buyers, test bakes counted.

Quant and qual ran together by voice or text, median 21 minutes, and anyone naming a switch trigger was asked how many test bakes the last switch needed. The researcher read all 173 and removed 23 for contradictions or experience outside bakery ingredients, leaving 150.

4Analysis

A recipe change outweighs the rise.

The researcher laid both pricings side by side: bakeries tolerate more wherever a switch would mean new test bakes and a changed formula. 74% would take a 5% rise on formula ingredients without new quotes, more than twice the share on flour, sugar and oils.

5Readout

On formula lines, 74% take a 5% rise.

The researcher took the investor and its operating partner through a 35-page report at a live readout, opening on the volume model by end product. The deal model passes the next increase through on formula lines and indexes flour, sugar and oils.

Four findings from the report.

Summary

Bakery ingredient outlook · Executive reportTop line 1

Top line 1 of 4

Tortillas and frozen lines carry next year’s ingredient growth

¹ Q8. For each product you make, how will your ingredient volume change next year? Percent change, spend-weighted, n = 150.

² Formula ingredient use per line is directional; see the appendix tables.

+3%spend-weighted

all ingredients, next year

+8%spend-weighted

tortillas and flatbreads

+6%spend-weighted

frozen and par-baked goods

−1%spend-weighted

sliced bread

Bakeries planning more volume next year, by end product

Plan more volume next year, multi-select (n = 150)

Plan more frozen volume, by tier

Plan more tortilla volume, by tier

Expected change asked per end product the bakery makes, then weighted by each bakery’s ingredient spend on that line. Planning more volume is multi-select across lines; shares do not sum to 100.

Supporting evidence

Tortilla plans come most from mid-size bakeries: 56% plan more tortilla volume, against 35% of large bakeries. § 3.2
Frozen and par-baked lines use more dough conditioners and enzymes per pound than sliced bread. § 3.3²

Illustrative report03

Bakery ingredient outlook · Executive reportTop line 2

Top line 2 of 4

Bakeries take a 5% rise on formula ingredients and shop the basics

¹ Q15 and Q16. If your supplier raised prices 5% on formula ingredients, or on flour, sugar and oils, what would you do? Single select, n = 150.

² The second-source effect is directional; base shown in the appendix.

74%n = 150

would accept a 5% rise on formula ingredients

30%n = 150

would accept a 5% rise on flour, sugar and oils

77%n = 70

of mid-size bakeries accept on formula lines

21%n = 80

of large bakeries accept on commodities

Would accept a 5% increase without seeking quotes, by ingredient type

Would accept a 5% increase without seeking quotes

At a 5% rise on formula ingredients (n = 150)

AcceptSeek quotesSwitch supplier

At a 5% rise on commodities (n = 150)

AcceptSeek quotesSwitch supplier

Supporting evidence

Mid-size bakeries accept more on both lines, 77% and 40%, against 71% and 21% at large bakeries. § 4.2
Large bakeries with a second qualified source for a formula ingredient accept less, close to the commodity rate. § 4.3²

Illustrative report04

Bakery ingredient outlook · Executive reportTop line 3

Top line 3 of 4

Most bakeries would accept commodity prices tied to an index

¹ Q17. Would you accept flour, sugar and oil prices tied to a published commodity index? Single select, n = 150.

² Acceptance with a cap on each reset is directional; see the appendix.

62%n = 150

would accept index-linked commodity prices

68%n = 80

of large bakeries would accept an index

56%n = 70

of mid-size bakeries would accept an index

55%n = 150

want the index reset each quarter

Would accept flour, sugar and oil prices tied to a published index

Would accept index-linked commodity pricing

How often the index should reset (n = 150)

Each quarterTwice a yearOnce a year

Already buy commodities on an index

Index-linked pricing described as a price that moves with a published commodity index, reset on a fixed schedule. Asked of all 150 after the paired price questions.

Supporting evidence

Bakeries that already buy on an index are the most willing to extend it: 85%, against 49% of the rest. § 5.2
Mid-size bakeries worry most about a sudden reset; a cap on each reset raises their acceptance. § 5.3²

Illustrative report05

Bakery ingredient outlook · Executive reportTop line 4

Top line 4 of 4

Missed deliveries trigger switches, and test bakes slow them

¹ Q23. Which of these would make you switch an ingredient supplier? Multi-select, n = 150.

² Q30. How many test bakes did your last change of supplier need? Asked by ingredient type.

4median

test bakes to switch a formula ingredient

1median

test bake to switch a commodity

66%n = 150

would switch over missed deliveries

41%n = 150

would switch over a price rise above budget

What would make a bakery switch ingredient suppliers

Would switch supplier over, multi-select (n = 150)

Top three triggers, large bakeries (n = 80)

1Missed deliveries
2Uneven quality between lots
3A price rise above budget

Top three triggers, mid-size bakeries (n = 70)

1Missed deliveries
2A price rise above budget
3Uneven quality between lots

Triggers multi-select; shares do not sum to 100. Test bakes counted from each leader’s last change of supplier, by ingredient type; medians shown.

Supporting evidence

A label change for a reformulated product adds to the cost of switching a formula ingredient. § 6.2
A price rise above budget weighs more for mid-size bakeries, which rank it second. § 6.3²

Illustrative report06

Top line 1 of 4 · page 03Illustrative report · top line 1 of 4 · swipeIllustrative report

Question 1 · Volume

Tortillas and frozen lines carry next year’s growth.

Weighted by ingredient spend, bakeries expect volume to grow 3% next year. Tortillas and flatbreads lead at +8% and frozen and par-baked goods follow at +6%, while sliced bread slips 1%.

+3%all ingredients, next year

+8%tortillas and flatbreads

Expected change in ingredient volume, spend-weighted · n = 150

Question 2 · Pass-through

On formula ingredients, bakeries take a 5% rise.

74% would accept a 5% increase on ingredients written into their formulas without seeking quotes, against 30% on flour, sugar and oils. Mid-size bakeries accept more on both.

74%formula ingredients

30%flour, sugar and oils

Would accept a 5% increase without seeking quotes · n = 150

Question 2 · Commodity pricing

Most would take commodity prices tied to an index.

62% would accept flour, sugar and oil prices tied to a published commodity index. Large bakeries, more of whom already buy on an index, are more willing at 68%, against 56% of mid-size bakeries.

All bakeries62%

Large bakeries (n = 80)68%

Mid-size bakeries (n = 70)56%

Would accept index-linked commodity pricing · n = 150

Question 3 · Switching

Missed deliveries trigger switches; test bakes slow them.

Missed deliveries lead the switch triggers at 66%, ahead of uneven quality between lots at 49%. The last switch of a formula ingredient took a median of four test bakes; a commodity switch took one.

Missed deliveries66%

Uneven quality between lots49%

A price rise above budget41%

Better terms from a rival17%

Reasons to switch supplier · multi-select · n = 150

Three themes behind the numbers.

Formula lines

“A few percent on the dough conditioner, I grumble and pay. Requalifying a new one ties up the line and the lab.”

Purchasing manager

Commodities

“On sugar and oil we watch the market every day. A flat increase from a supplier gets a round of quotes.”

Commodity buyer

Index pricing

“Tie it to an index and reset it each quarter. Then I can explain the price to my finance team.”

Head of procurement

Three moves made with the report.

1The margin case · from finding 2

Modeled full pass-through on formula lines.

In the deal model, formula ingredients carry the next cost increase in full: 74% of bakeries would take a 5% rise on them without seeking quotes.

2The contracts · from finding 3

Planned index pricing for commodity lines.

The plan moves flour, sugar and oils to contracts tied to a published index, terms 62% of bakeries would accept, with a reset each quarter.

3The growth plan · from finding 1

Aimed formula sales at tortilla and frozen lines.

New sales targets favor bakeries growing tortillas and flatbreads (+8%) and frozen and par-baked goods (+6%), the two fastest-growing lines.

Illustrative example. The company, scenario, and all figures are fictional. They show UserCue’s method and deliverable format. They do not come from any client study.

Will bakeries keep ordering more if the supplier passes on its costs?

Which end products will grow bakeries’ ingredient volumes next year?

How much of a supplier’s cost increase will bakeries absorb?

What would make them switch ingredient suppliers?

How the study ran, start to finish.

A bid that hinges on pass-through.

Two tiers, one rise priced twice.

150 buyers, test bakes counted.

A recipe change outweighs the rise.

On formula lines, 74% take a 5% rise.

Four findings from the report.

Tortillas and frozen lines carry next year’s growth.

On formula ingredients, bakeries take a 5% rise.

Most would take commodity prices tied to an index.

Missed deliveries trigger switches; test bakes slow them.

Three themes behind the numbers.

Three moves made with the report.

Modeled full pass-through on formula lines.

Planned index pricing for commodity lines.

Aimed formula sales at tortilla and frozen lines.

Bring us your next pricing question.

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Industrial Fastener Market Dynamics

Will bakeries keep ordering more if the supplier passes on its costs?

Which end products will grow bakeries’ ingredient volumes next year?

How much of a supplier’s cost increase will bakeries absorb?

What would make them switch ingredient suppliers?

How the study ran, start to finish.

A bid that hinges on pass-through.

Two tiers, one rise priced twice.

150 buyers, test bakes counted.

A recipe change outweighs the rise.

On formula lines, 74% take a 5% rise.

Four findings from the report.

Tortillas and frozen lines carry next year’s growth.

On formula ingredients, bakeries take a 5% rise.

Most would take commodity prices tied to an index.

Missed deliveries trigger switches; test bakes slow them.

Three themes behind the numbers.

Three moves made with the report.

Modeled full pass-through on formula lines.

Planned index pricing for commodity lines.

Aimed formula sales at tortilla and frozen lines.

Bring us your next pricing question.

Home Improvement Showroom Concept Test

Dental Lab Contract Manufacturing Outlook

Industrial Fastener Market Dynamics