Economics of Soy

The use of soy flour in the bakery increases profitability for the baker. Water absorption by soy flour plus retention of moisture during baking (decreased bake loss) results in a greater yield that translates into increased product sales. These more than compensate for the cost of the soy flour.

The addition of soy protein (e.g. 70 PDI defatted soy flour) to wheat flour in bakery applications enhances the protein content and the amino acid balance in the food. This provides a more nutritious product, particularly for consumers for whom bread is the main source of dietary protein.

In bakery products, soy flour absorbs water and retains this moisture, extending the shelf life and decreasing the staling rate of the product. In general the addition of soy flour to a dough or batter requires few adjustments in bakery processing operations. The finished product is usually indistinguishable from that of the product without soy flour. In certain instances quality is improved. The baker profits and the consumer benefits — a winning situation for everyone.

Following are some examples of profit/loss for a baker.

Assuming the basic bread dough is based on 50 kg wheat flour, the baker would add 1.5 kg defatted soy flour and 2.5 L water, to make 5 kg of extra dough. How many extra loaves of bread does this represent, and what is the income from selling that bread?
As an example, we will use data from an Istanbul bakery in January of 2005 (NTL is the New Turkish Lira, equal to about $1.25 US). The same analysis has been made in many countries with essentially the same result:

  • Soy flour cost 0.80 NTL per kg;
  • Bread sold for 0.25 NTL per loaf;
  • 1.5 kg soy flour + 2.5 L water yielded 4 kg of dough;
  • 4 kg of dough made 16 loaves of bread (250 g cut weight);
  • 16 loaves of bread sold for 4.00 NTL;
  • 1.5 kg of soy flour cost 1.20 NTL;
  • Bakery profit was increased by 2.80 NTL.

A more exact calculation of costs and profits, plus the ability to explore the effect of changes in prices, can be done with a simple spreadsheet. The one shown in the following table is based on data from Nigeria in April 2008. The fourth column summarizes costs and yields for a control dough, while the sixth column does the same for a dough with 3% soy flour and 5% extra water. The “Margin” is simply total sales minus ingredient costs. While not the same as actual bakery profits the extra “margin” (Table 4A) should largely translate into extra profit.

Control
With 3% Soy
Ingredient
N/kg
kg/dough
N/dough
kg/dough
N/dough
Wheat Flour
116
100
11600
100
11600
Salt
40
2
80
2
80
Yeast
600
2
1200
2
1200
Additive
700
0.5
350
0.5
350
Soy Flour
150
0
0
3
450
Water
0
60
0
65
0
Totals
164.5
13230
172.5
13680
Dough Cost, N/kg
80.43
79.30
Cut weight, grams
930
930
Loaves/dough
176.9
185.5
Price/loaf, N 300
Sales/dough, N
53065
55645
"Margin", N
39835
41965

Profit Summary

  • Extra loaves 8.9
  • Extra sales, N 2581
  • Soy cost, N 450
  • Extra “margin”, N 2131

The analysis to use depends on the size of the bakery. A smaller baker will typically produce a certain number of doughs per day, selling all the bread that is made. In this case the “simple” analysis gives a good picture of potential profits. A large wholesale baker will make a certain number of loaves of bread per day to service his retail customers. For this type of operation the “precise” analysis is more appropriate. The baker should set up a spreadsheet such as that shown above, using his ingredient costs, cut weights, and selling price, to evaluate the profits available to him.

For more information about using soy in baking products, refer to Clyde Stauffer’s Soy Flour Products in Baking paper.

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