Bread is getting more expensive again: why price increases are inevitable in 2025

22 August 17:58

Bread in Ukraine is steadily rising in price: by the end of 2025, prices will increase by 15-20%. This was stated by Yuriy Duchenko, director of Kyiv Khlib LLC, during the Khlib.ua industry conference held in Kyiv, "Komersant Ukrainian" reports.

According to him, the rise in prices is inevitable, as bread producers are operating at the edge of profitability.

“We see a tendency for the cost of production to rise further, primarily due to rising prices for flour, energy and rising labor costs. By the end of the year, I think we will see another 15-20% rise in prices,” emphasized Duchenko.

The director of Kyiv Khlib LLC explained that most bakery companies are currently operating at the margins of profitability, and some are even in the red. The situation is complicated by a decline in demand for products with higher margins, such as muffins, buns, and white flour products. Instead, there is a growing demand for simple bread, which is cheaper but generates less profit.

Shadow market and high costs: why bread has become a luxury

Among the main challenges for the industry, Duchenko named:

lack of working capital;
energy dependence of production;
decrease in the purchasing power of the population;
logistical difficulties;
export restrictions;
shadowing of the market, which is estimated to have reached 40-50%.

This includes work under a simplified taxation system and gray schemes for paying wages. Such bread is sold 20% cheaper, and this is a serious competition for companies that operate officially,” said Duchenko.

Technologies and new sales channels as a salvation for producers and buyers

Despite the difficult situation, the industry has the potential to transform. Among the possible ways of improvement are:

automation of production;
implementation of innovative solutions, including AI;
development of franchising;
activation of sales channels through fast food and street food;
focus on fresh and healthy bread.

Experts note that only through innovation and updating business models will the industry be able to remain competitive and stay in the market in the face of economic instability.

Ovens on the brink: how the bread industry survives in the face of war and inflation

Ivan Us, Chief Consultant at the National Institute for Strategic Studies (NISS) , urged Ukrainians to prepare for the fact that the price of bread in Ukraine may rise to 55 UAH per loaf by the end of 2025.

According to him, it will be a gradual rather than a sharp increase in prices that will take place over several months. The main factor that will provoke an increase in bread prices is the rise in fuel prices. This directly affected logistics and production costs in the baking industry.

Fuel is a key cost item in logistics and production. When its price rises, it automatically affects the cost of bread. If there are no critical changes in the energy market, the increase will be smooth,” the expert said.

A similar opinion is shared by the Ukrainian Bakers Association, which predicts an average 20% increase in bread prices by the end of 2025. In monetary terms, this means that even under an optimistic scenario, the cost of most bread varieties will exceed UAH 50 per loaf.

According to the head of the Association, Oleksandr Taranenko, the price is affected not only by energy carriers but also by the cost of grain, flour and other ingredients, which is rising due to global trends and logistical challenges, including those related to martial law.

The selling price of 1 kg of bread from a bakery is just over UAH 40. At the same time, supermarkets’ margins on bread through various marketing mechanisms sometimes reach 30%, although by law they should not exceed 10%,” the expert said, explaining to readers the mechanism of price increases for flour products.

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Is it possible to contain prices for “social” bread?

Experts believe that price increases can be contained through government support for producers in terms of compensation for energy costs, as well as improving supply chains. However, in the current environment, the priority remains to ensure stable supply and maintain production capacity in safe regions.

Any support programs should be targeted and transparent to avoid abuse. Supporting bread producers is not only a matter of prices, but also of the country’s food security.