Logistics Accounts for Up to 33% of Bread Production Costs Due to Rising Fuel Prices

Logistics costs in Ukraine have reached a critical level, constituting up to 33% of the production cost of bread. This surge is attributed to rising fuel prices and the necessity for daily product deliveries to numerous retail outlets. Yuriy Duchenko, the president of the All-Ukrainian Bakers Association (VAP) and director of strategic communications at Alviva Group, which produces the 'Kyivkhlib' brand, shared these insights.

According to Duchenko, flour previously accounted for 60% of the cost of bread; however, this figure has now dropped to 35%. This change indicates that the industry is being forced to adapt to new economic conditions, particularly through the optimization of delivery routes, the implementation of new logistics models, and the use of modern electric transport for transportation. All these measures aim to reduce costs and enhance production efficiency.

Duchenko also noted that bread manufacturers are actively exploring the possibility of transitioning to electric vans from European manufacturers, with prices in the Ukrainian market ranging from EUR 50,000 to EUR 75,000. This could represent a significant step in reducing delivery costs, especially considering the rising prices of traditional fuel types.

During a discussion on the feasibility of updating the technological fleet of enterprises, Dmitry Tsikhanivsky, the marketing director of UB.UA, advised paying attention to specific models of Chinese electric vehicles, which have a range of 350 to 500 km. In his opinion, such solutions could serve as an alternative amid the resource shortages currently observed in the market.

Elena Bobrova, the sales director at ABILE, emphasized that in the face of continually rising fuel prices, energy efficiency has become a matter of survival for the industry. She stated that electric transport is the 'future that has already arrived,' but its implementation requires new service solutions and flexibility in management.

Ruslan Dihalenko, the commercial director of Enzym Group, believes that the logistics problem should be addressed by small local businesses. However, he pointed out that today among micro-manufacturers, 'only romantic craft producers remain,' as large players have long dominated this market segment.

It is worth noting that bread manufacturers have repeatedly pointed to logistics and labor shortages as key factors that most significantly affect the final product price for consumers. These issues remain relevant and continue to raise concerns among industry representatives who are seeking ways to optimize costs and enhance competitiveness.