I just read this article from The New York Times titled, “Real-Life Lessons in the Delicate Art of Setting Prices“. It’s an interesting read and discusses how Naomi Poe, founder of Better Batter Gluten Free Flour learned how to set her prices as well as numerous other business owners in many different types of businesses. Regardless of where you fall in terms of how much is too much — this is a good article to read to learn more about what goes into the pricing a product. With any small business (or large for that matter), there are many costs to cover in the development of a product and there are definitely profits that should be made — this is how people make a living and run a thriving business.

How much is too much?

I hear from people everyday talking about the high prices of gluten-free packaged food at local markets and gluten-free baked goods in the what’s turning out to be the hundreds (if not thousands) of dedicated gluten-free bakeries and businesses around the world. The prices are certainly higher (and for good reason) then the gluten-filled products that they are created to replace. That being said there are those that take advantage of customers hunger for gluten-free products and charge an excessively high premium for their goods — regardless of quality.

For me, quality is the end-all deciding factor in deciding whether or not to purchase something. One example is gluten-free spaghetti. I’ve tried many different brands — some made from rice, some from corn, and even some recently that was a mix of quinoa and corn. Without naming brands, the one that I liked the best happens to be the most expensive. A package of this spaghetti is $4.99 as opposed to some of the others that self for as little as $2.50. At more than double the price, I don’t even hesitate to put it in my cart — not even for a second. It’s as good as any real spaghetti that I’ve ever had and everyone in the family absolutely loves it. That by itself makes the higher price worthwhile for me.

Let’s talk about baked goods. Depending on where you’re shopping and where you live, you can find mixes for everything from cakes to cupcakes to brownies. There are gluten-free pizza crusts, crusty baguettes, white sandwich bread, donuts, tortillas, pretzels, croissants, and just about anything else you could possibly dream up. I can’t really think of anything that hasn’t been made gluten-free. There are even pre-made flour mixtures that are meant to be used as a substitute for all-purpose flour for making your favorite recipes gluten-free. The prices and quality of these products vary greatly and it’s up to you to use your buying power to either approve or disapprove of the product you’re buying. For me, I’m so grateful to see the bounty of gluten-free products now available to me. I do expect to pay a fair price and I’ll even pay a little more it something is really good.

In terms of gluten-free bakeries — yes, the prices can be high. But this really isn’t different to any normal boutique bakery. If you’re buying something that is handmade, it’s going to cost more. How much more? That depends on so many factors including the market you’re in, how much demand there is for the product, and of course the amount of profit that the bakery owner is wanting to make. Again, if something is really good (as in better than the real thing), I’ll pay a premium. If something is just OK or not that good, I’ll stick to the store-bought mix and make my own. At the end of the day, I’ll pay for quality, I won’t pay for mediocrity — there are just too many good options out there to have to settle for anything that isn’t truly great. You might have to do some looking and try a few before you find the right ones, but with time, you will find the ones that you like for the price you’re willing to pay. There might even be something that you like enough that you’ll be willing to pay a premium for.

Just out of curiosity, what are your favorite store bought brands? Which gluten-free bakeries do you like the best. Be sure to include links.

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Excerpt from The New York Times Article:

“…A lot of small-business owners set prices just by looking at what their competitors charge. Naomi Poe, founder of Better Batter Gluten Free Flour near Altoona, Pa., learned that it is important to try tounderstand how your customers value your product.

To raise prices, she had to convince customers her products offered added value.

In the food industry, Ms. Poe said, customers generally look for the cheapest price, but because her flour and baking mixes contain no gluten, they cost more to manufacture. She initially tried to compete with products that contain gluten on price but lost money on every sale…”

Naomi Poe, Founder of Better Batter Gluten Free Flour / Photo: Jeff Swensen for The New York Times

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