A specialist Sydney bakery that survived COVID-19 will shut its doors this month, with its owner blaming surging ingredient costs and new fuel levies for destroying its operating margins.
Nutie will not renew its lease past April 12, after a decade of providing gluten-free and Coeliac-friendly cakes and pastries across the city’s inner west.
Renowned for its doughnuts and rich cheesecakes, the Dulwich Hill shopfront will cease trading due to what co-founder and baker Sina Klug called insurmountable cost challenges.
The cost of specialty ingredients, like almond meal imported from Europe, rose through the COVID-19 pandemic and never came down, she told SmartCompany.
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Chocolate prices have tripled since its recipes were formulated, and almond meal has at least doubled in price.
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Customers stayed loyal to Nutie even when those prices were passed on, but the war in the Middle East and its effect on ingredient costs pose a new challenge.
“We have to pay a fuel levy now for every single supplier,” she said.
“Even fruit and veggies, they’ve doubled their minimum orders, and they’re still charging a fuel levy on top of that, which is difficult.”
Combined with a steadily increasing wage bill, superannuation requirements, and the looming card payment surcharge ban, Klug said, “small business is getting hit from every side”.
Hospitality venues nationwide are feeling similar pressure, says the Australian Restaurants and Catering Association, which has called for businesses to enact temporary surcharges to recoup some of those backend costs.
But Klug said that with diners themselves feeling the pinch, simply lifting menu prices is not the solution.
“Are we going to charge $15 for a single doughnut if people already can’t afford to go out for one at $7.50, you know?” she added.
Transporting recipes not so simple
Klug and partner Jacques Dumont operate a sister business, the vegan bakery Miss Sina, in Marrickville.
Simply porting Nutie’s products over would be difficult: Miss Sina is not strictly gluten-free, making it tricky to cater to customers with Coeliac disease.
“People can end up in hospital with the slightest bit of cross-contamination,” she said.
Nutie’s closure will be a loss for the city’s gluten-free community, who already pay a premium for safe treats, she added.
“Already they are starting in such an unfair situation, and to then have less and less options where they can feel safe to eat out, because businesses just can’t afford to keep offering those options… it’s heartbreaking.
“You’ve got little kids, and they miss out on every birthday party where they can’t eat the cake, and you always have to pay so much extra to get something they can eat.”
Despite Nutie’s imminent closure, the business is exploring new ways to cater, literally and figuratively, to the gluten-free diners.
Klug said it is considering a cookbook based on its recipes, or selling an in-house gluten-free flour mix with doughnut molds, “so people can bake and decorate at home”.
Those options are still under discussion as Nutie prepares for its farewell sales.
Looking beyond her business, Klug called on shoppers to buy local through a particularly challenging moment for independent traders.
“If you are a consumer, support small business,” she said.
“Try and not buy from a big chain, but go to your little corner store when you can. It means the world to them.
“And if you own a small business, try and support each other like help other businesses, see how you can work together.
“You know, it’s something we’re not going to get through alone. We just need to stand together as a community.”
