On the economics of baking bread
There are only a few things which I despised more as a child than eating bread. Very high on that rather short list was eating home-made bread. It was an ordeal I went through when visiting my father, who was what one could consider as an early pioneer in making one’s own bread. Not via (very) old-fashioned kneading of the dough, which is actually a frightening physical activity, but by using an electronic bread-baking device.
The slices of bread were twice the size of those you would get from a ‘normal’ bread acquired from a bakery. Chewing on such slices was a marathon, and not a tasty one. After two slices I’d give up, accepting hunger in the afternoon. My father on the other hand saw this as a sign that “It was real bread”, and that it “filled me up twice the size as that rubbish you buy in supermarkets”.
For Belgians, eating bread is an activity one usually goes through at least twice a day. If you’re lucky, you get a more fancy sandwich during lunch, hence reducing the count, but making a habit out of this is horribly expensive. Fair: when reading the above paragraph, it is easy to consider me as a spoiled brat. I however accepted my fate. The first 18 years of my life I chewed and chewed, until I went to university and lived in a dorm where I experienced the ultimate freedom of actually deciding what I could eat.
Naturally, this resulted in copious amounts of fries, pizza and various other types of food which have the unfortunate downside of inflating the buyer of such goods. It however also meant I was able to scratch bread from my menu. Of course, I did not replace the bread with pizza. Even I had some standards in the morning. I bought extremely mediocre Cornflakes, pre-baked pastries and so on. After a rough night out I often just skipped breakfast altogether.
Despite enjoying my newly found freedom, I was unfortunately also confronted with a second side effect of being a student: a continuous lack of money. This resulted in having to replace my bread with equally cheap options, which are usually not a lot better, taste-wise. I did not care however, thrilled as I was of being rid of my bread-routine that I had built on for 18 years of my life.
However, several years in my studies the money gap was widening. I enrolled as a student in a supermarket during the weekends. Next to a hatred for people this also resulted in having to prepare lunch for my 30-minute break between my long hours. As I was still living at home during the weekends, I found myself revisiting my routine I had long disbanded: waking up early and preparing my slices of bread (as this was at my mother’s place, luckily these were from the bakery. Meaning I could eat at least four).
I did however also come to a startling realization after about 22-years in existence. If one was to drown the slice of bread with sufficient Salmon-spread, it would actually be not all that horrible. Even better so, I was actually starting to look forward to my short breaks, being relieved from annoying customers and accompanied by my home-made lunch. There was actually something quite satisfying about not spending a significant amount of the money you were making on a mediocre, overpriced lunch you bought somewhere to get through your day of money-making.
Of course, my evolution of taste in bread is – surprise – not the actual point of this article. I will get to that if I fast-forward again a few years. Now, I’m actually working and living with a girlfriend who actually made me enjoy cheese, which means I have even expanded my taste palate even more. I would take bread to work frequently. Due to a lack of foresight though, we very often ran out of bread. This resulted in me having to buy overpriced sandwiches at work. If the warm lunches looked somewhat decent, I’d double my spending on that.
And then (we’re getting there), two things happened which made me actually become a hypocrite and step into my father’s footsteps to buy my own bread-making machine.
- The Covid-19 pandemic broke out, meaning I was both locked at home doing telework.
- My girlfriend’s birthday was approaching, meaning I was screwed because the majority of shops was closed and a lot of activities one would plan on such occasion were simply forbidden.
These two series of unfortunate events culminated in me throwing overboard my objections against my girlfriend’s long pleas for the acquisition of such a device and ordering it online. She was over the moon with it, and I am happy to say that I have come to peace with. Without of course admitting it I have become quite fond of it myself as well.
Investing in bread
Of course, there is a rationalization which takes place internally if one decides one morning to buy a bread-baking machine for about 180 euros. That reasoning & poor mathematics I will write down here.
- On an average working week, I get through about 3 breads a week.
- I have tried to do the calculation of the costs which to be honest it is not that straightforward. The ingredients cost me about €1.25 per bread.
- This does not yet include water nor electricity.
- It does not include capital depreciation.
- I do not track the electricity use nor water using when making the bread. I believe it to be a rather minor cost however. Let’s say that including these costs my total cost would be around €1.50. I am almost certain that is a big exaggeration.
- Of course, depending on the type of bread you bake your costs can differ, but let’s not get lost in such details for now.
- For a more or less equivalent bread in the bakery & supermarket, I pay between €2.00 and €2.20.
- Let’s take the modest approach and continue with the cost of 2 euros.
- This means my profit is about 50 cent per bread. This is not exact science of course, but even if it is a bit less, percentage wise it’s still a big deal.
- The counterargument of ‘time’ could be raised. As it now takes me about 2 minutes to prepare everything in the machine, I’d say we can put that one aside rather quickly. Going to the bakery on the one hand might be more time-consuming.
Let’s put that down graphically:
- After the baking of 360 breads, the cost savings add up to the investment I did for the break baking machine. After this threshold, you could argue the investment starts bearing fruit. If it breaks down before I would be better off buying my own bread.
- Judging the rave reviews I found before, I do not expect this to happen.
- Note: For simplicity's sake I did not take into account the interest rate on this investment.
- With my ‘baking average’, I go through about 3 breads / week. This does not take into account holidays where I am abroad. Taking that into account, I would estimate I go through about 135 breads a year. This means that after a bit more than 2,5 years, I should be picking the fruits from this acquisition!
- In reality, this will be faster. As a result of being able to bake bread at any time I want, I rarely run out. This means I spent a LOT less money on buying overpriced items at lunch. It is quite easy to buy the necessary ingredients in large bulks (which typically also reduces the cost).
- If you bake a 1000 breads, according to this calculation you gain about 320 euros. Not bad!
- However, if you go towards 2000 breads (which, if you have kids, will not even take you that long), you gain 820 euros. There are a lot worse investments to make!
Of course, this rationalization completely ignores the main aspect of baking bread: it gives quite a nice satisfaction to chew away at your own, home-made bread during lunch. But if it also can save a buck, then why not give it a go?
Are you already baking your own bread? What is holding you back? Don’t agree with the findings? Feel free to comment and let me know! I’ll gladly make improvements.