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What is a Gluten Free Bakery business?
It is estimated that more than 8.5 million people in the UK are now gluten free, which accounts for nearly 13% of the population. Gluten is the generic name for the proteins that are found in many grains, such as wheat, rye, barley and triticale. Although gluten provides no essential nutrients, it is commonly found in a lot of everyday foods, such as bread, cereal, pasta, pizza, cakes, pies and biscuits.
Gluten free food is food that excludes gluten or any contact with gluten. Although some foods, such as meat, fish and fruit, are naturally gluten free, many foods that people regularly crave or foods that often make up your everyday diet contain gluten. A gluten free bakery will sell foods that typically contain gluten and instead make them without any gluten and prepare and bake them in a completely gluten free environment.
Some baked goods that could be sold at a gluten free bakery are:
|Pies and pasties||Muffins||Biscuits||Cookies|
To make these items without gluten, you will likely choose a gluten free flour option, such as almond flour, buckwheat flour, sorghum flour, amaranth flour or arrowroot flour. Alternatively, you could create recipes that contain no flour at all.
Gluten free businesses are particularly popular with people who experience gluten-related health conditions. There are various medical conditions where ingesting gluten can result in adverse symptoms, such as diarrhoea, bloating, abdominal pain, vomiting and anaemia.
- Coeliac disease: Also known as celiac disease, this is a serious autoimmune disorder where your immune system attacks your own tissue when you eat gluten. This can damage the lining of your small intestine and prevent the absorption of nutrients from food.
- Non-coeliac gluten sensitivity: Also called gluten intolerance, people with gluten sensitivity often experience many of the same symptoms as people with coeliac disease but experience no damage to their small intestines.
- Gluten ataxia: This is an immune-mediated disorder whereby your immune system attacks the nervous system and certain nerve tissue when you ingest gluten, and causes problems with muscle control and voluntary muscle movement, including slurred speech, clumsiness and incoordination. It is a neurological manifestation of coeliac disease and can be present without damage to your gut.
These medical conditions are on the rise. For people with these health conditions, eating even a small amount of gluten can result in severe symptoms. If someone is diagnosed with a gluten sensitivity or intolerance, they will likely have to follow a gluten free diet for the rest of their life. Other people avoid gluten for lifestyle reasons, such as to lose weight or to feel healthier.
Gluten-related health conditions are diagnosed much more frequently now compared to 20 years ago. There are many reasons why these conditions could be on the rise.
- Modern wheat has a unique ability to trigger an auto-immune reaction in the gut.
- Gluten acts as a natural insecticide, meaning that many farmers favour wheat that has a higher gluten content.
- Newer wheat varieties that are frequently used in baking have a higher gluten content.
- Societal awareness of gluten-related conditions has also increased dramatically, meaning people may be more likely to identify their symptoms.
- Diagnostic testing has become more accurate and less invasive.
If you are thinking about setting up a gluten free bakery business, you will first need to decide what type of bakery business you want to set up.
Your options include:
A Retail Bakery
This type of bakery sells gluten free baked goods directly to their customers. There are two main types of retail bakeries:
- Counter service: Counter-service bakeries are usually smaller. They don’t have an area for customers to sit down and, instead, baked goods are only served for takeaway. This type of bakery usually requires fewer staff members.
- Bakery café: This type of bakery includes a dining area for customers to sit in. Bakery cafes usually sell a variety of baked goods and may also offer hot and cold drinks. Some bakery cafes also offer other types of food, such as sandwiches and pizzas, although all food should be gluten free. Bakery cafes usually offer both sit-down and takeaway options.
Because retail bakeries deal directly with customers, they may need to invest in the design and aesthetic of their business premises.
A Commercial Bakery
Also known as a wholesale bakery, this is a bakery business that sells its products to other businesses and establishments, such as restaurants, shops or cafes, that want gluten free products that have been prepared, baked and packaged in a gluten free environment.
Because this type of business usually produces baked goods on a large scale, they will need to have larger business premises and hire employees such as bakers, delivery drivers and cleaners.
Commercial baking businesses usually enter into contracts with their clients, meaning their business growth, expenses and profits are predictable. Although upfront and overhead costs may be higher than other baking businesses, the total profits are also usually higher.
A Speciality Bakery
This type of bakery will offer speciality gluten free products, rather than an extensive menu. For example, you could set up a gluten free wedding cake business or a gluten free pie business.
Speciality bakeries can choose whether to sell their products retail or wholesale. Focusing on a specific product type can help businesses to perfect their products. Focusing on a niche can also help bakeries to stand out from the crowd and become more successful.
There are many different responsibilities associated with starting up a gluten free bakery business. Although your responsibilities can vary depending on the type of bakery business you choose some of the typical tasks associated with this type of business are:
- Sourcing flours and other gluten free ingredients.
- Purchasing, cleaning and maintaining equipment and machinery.
- Ensuring the cleanliness of your premises and avoiding cross-contamination.
- Complying with all legal guidelines and health and safety requirements.
- Preparing ingredients and baking your products.
- Pricing your products.
- Packaging and displaying your products.
- Dealing with customers, handling orders, payments, receipts and invoices.
- Handling customer collections and deliveries (if applicable).
- Marketing and advertising.
- Completing business and administrative tasks.
Many people who choose to set up gluten free bakeries follow a gluten free lifestyle themselves or have a close family member or friend with a gluten-related health condition. However, it could just be that you recognise the potential lucrativeness of the gluten free market and want to capitalise on it.
To set up this type of business, several qualities will be beneficial. This includes the necessary baking skills, knowledge and experience and a high level of knowledge about gluten and allergy requirements. A passion and talent for baking, the willingness to dedicate the required time and effort and a flair for business will also be beneficial.
Types of Customers
Baked goods, such as bread, cakes and pastries, are popular with people of all ages and demographics. However, a gluten free bakery business is likely to attract customers who have a gluten intolerance or allergy or who follow a gluten free diet. Although you know your typical customer base will be made up primarily of people who don’t eat gluten, this still encompasses more than 8 million people in the UK. It can therefore be beneficial to identify your target market more closely.
When identifying your target market, there are some important considerations you should make:
The type of bakery you are going to run
The type of bakery you set up will have a significant impact on the types of customers you target. For example, a commercial bakery will target other businesses whereas a retail bakery with a café may target families, couples and groups of friends.
Where your business is located
The location of your business will also be a major factor in determining your typical customer base, particularly if you run a retail bakery. Customers tend to choose a bakery that is conveniently located near their home or their place of work or study. Consider your location when determining the types of customers you are likely to attract. For example, if you are located in a town centre, your typical customers may be professionals working in the area and shoppers, whereas bakeries located in small villages may be more likely to attract families and groups of friends.
The types of products you will sell
The baked products you sell will have a significant impact on your typical customer base. For example, if you create occasion cakes, you may target people who are celebrating weddings, birthdays, christenings and other special occasions, whereas if you make products such as pies and sandwiches, your customers may be lunchtime visitors.
Your pricing strategy
Your price points will be a key determiner of your customer base. Customers can typically be separated into three pricing categories:
If your products have a higher price point, they are most likely to attract customers looking for premium products or those who are purchasing baked goods for a special occasion.
Once you have determined who your typical customer base is, you can then decide how best to target them. You will need to gather information and insights into your customers to figure out the types of products they are likely looking for and the best ways to attract them to your business. You can do this via multiple sources, including social media and customer surveys.
Equipment You Will Need
Equipment is an essential purchase for bakery businesses. The type of equipment you require will depend on the type of bakery business you set up and the types of baked goods you are making. For example, commercial and retail bakery businesses will have different equipment requirements and a business that specialises in bread will have different requirements than a business that specialises in wedding cakes.
Below is a list of the equipment typically required by a gluten free bakery.
Baking Equipment and Accessories:
You may require several different types of mixers, such as a countertop mixer and a large dough mixer, for different tasks in your bakery. It would also be beneficial to purchase a mixer that has a variety of mixing accessories and whisk attachments. Because your mixers will experience excessive use, it is recommended you purchase an industrial mixer, as they are more durable and more reliable. When deciding the type of mixers that are best for your business, consider the size and capacity of the mixer, the power and the type of mixing they are capable of (for example, mixing, kneading, blending and whipping).
The most common mixers are:
- Planetary mixers.
- Horizontal mixers.
- Spiral mixers.
The type of oven you purchase will depend on the types of baked goods you plan to make. Most bakeries opt for a convection oven, which uses internal fans to circulate the air to create even browning and uniform baking. However, different types of bakeries may opt for a different type of oven. For example, a gluten free pizza business may choose a conveyor oven.
Dough is used in a variety of baked goods, including bread, pastries, pizzas, cinnamon rolls, biscuits, cookies and doughnuts. If your baking business uses any dough, you will need a dough proofer. A dough proofer can help to simplify the dough-rising process, helping you to ensure your products are uniform in shape and size, and that the production process is streamlined.
Bakeware is the type of equipment you will use to bake your products on. Investing in quality bakeware is recommended as it will likely be heavily used and can be susceptible to dents and warping.
Some pieces of bakeware you may need to purchase include:
- Bread pans.
- Baking trays.
- Muffin tins.
- Cake pans.
- Pie pans.
Heavy-duty food processor
A food processor will likely be used for any recipes that use butter. This can include baked products such as bread, brioche, croissants, pies and some desserts. A food processor can shred, knead, dice and grind and combine ingredients into the required mixture using a multipurpose blade that rotates at a high speed.
A dough sheeter
This is a piece of industrial baking equipment that is used to make dough in large quantities at a much quicker rate. It rolls out pieces of dough to the desired thickness, whilst ensuring they are smooth and uniform. It is favoured in bakeries that make products such as pies, pastries and pizzas.
A bread slicer
If you are baking your own bread, a bread slicer is a necessary accessory as many customers will request loaves of already sliced bread. A bread slicer allows you to quickly cut uniform slices of bread.
Sheet pan racks
If you are baking large quantities of baked goods at one time, a sheet pan rack allows you to cool large amounts of products at the same time. You could also choose a tiered rack, allowing you to conserve space, and a rack that is on wheels, enabling you to transport your products around your bakery more easily.
A turnover machine
This reduces the usual labour-intensive task of making pastries and turnovers. They are capable of making up to 500 products in one hour and creating perfect dough seals for uniformity and to prevent leakage.
There are a wide variety of other baking accessories you may use in your baking business, for example:
- Flour sifters or sieves.
- Weighing scales.
- Temperature probe.
- Measuring cups and/or spoons.
- Stirring spoons.
- Pastry brushes.
- Rolling pins.
- Chef’s knives.
- Wire racks.
Cake decorating accessories
There are a variety of accessories you may need for decorating cakes, including:
- Piping bags.
- Piping nozzles.
- A cake turntable.
- A cake leveller.
- Silicone brushes.
- Icing smoother.
- Cake boards.
- A cake comb.
Preparation, Packaging and Storage Equipment:
Storage equipment is used for storing your baked goods, your supplies, stock and utensils. Some storage equipment you may require includes:
A refrigerator and freezer
This is essential equipment for all bakery businesses. You will need to store any perishables and fresh stock or ingredients in your fridge or freezer. Consider how much you will need to store when considering what size fridge and freezer you will need. Ensure both the fridge and freezer are set to the correct temperature.
Shelving creates a safe and secure area for storing non-perishable ingredients (such as flour), as well as equipment, accessories and utensils. Shelves also allow you to maximise the space in your bakery. You can also install shelving on the shop floor area of your bakery to display non-perishable baked goods to your customers.
Stainless steel worktops or worktables
You will use the worktops for all your food preparation tasks. Your worktables should be stainless steel as this material is non-porous, meaning it is resistant to most bacteria and germs. It is also easier to clean and will help you to maintain high standards of hygiene.
This sink should be used specifically for cleaning, disinfecting or storing food equipment and utensils and should not be used for handwashing. You must ensure the sink has both hot and cold running water. Depending on how big your bakery is, you may require two sinks for equipment.
You will need separate handwashing facilities and cannot use the same sink for handwashing and food preparation or equipment. This sink must be exclusively used for handwashing.
Rubbish bins and a waste disposal system
You will need rubbish bins in all food preparation areas. You will also need different bins for different items to ensure you are disposing of rubbish correctly and following recycling guidelines. Coloured-coded bins are the easiest way to ensure your waste disposal system is operating correctly.
Food labels are essential in your business and should clearly display any allergen information, any best before or use-by dates and the price.
Front of House Equipment:
Refrigerated display cases
This is an essential requirement for your bakery if any of your baked goods are perishable. It enables you to display your products safely and at the correct temperature, while still allowing customers to see all of your products.
Open display refrigerator
These differ from standard display cases as they are accessible from the front, allowing customers to access the products themselves. You can opt for a horizontal or vertical refrigerator, depending on your available space.
As mentioned earlier, shelving is recommended for displaying non-perishable baked goods, such as bread, muffins and croissants. Ensure your shelving is functional, attractive and safe. The shelving should be secured to a wall or extremely sturdy to ensure there is no risk of the shelving falling down or falling onto a customer.
A cash till and Point of Sale (POS) system
This is essential for recording sales and managing the financial aspects of your bakery. It is recommended that you have a payment system whereby customers can pay cash, debit card, or credit card for their purchases.
A CCTV system
A CCTV system is necessary for protecting your bakery from theft and burglaries. It can also help to protect you in the event of a threatening customer or an allegation against your business. A CCTV system can cost between £300 and £5,000 depending on the specification of the equipment, how many cameras you require, and the installation costs.
A sanitising station
This is an area for customers to sanitise their hands when entering or leaving your bakery or before handling any products. The popularity of a sanitising station has increased exponentially following the Covid-19 pandemic. Your sanitising station could be a hand sanitiser stand that is positioned close to your bakery’s entrance.
You will need signs that state your pricing, allergens, whether a product is vegetarian, vegan, or gluten free, and signs that advertise any discounts or special offers. You may also put signs outside your bakery advertising your products.
Your packaging should be of good quality and, if possible, recyclable. You may want to display your business name or logo on the packaging as a way of promoting your business. Packaging could include bags, boxes and trays. Many customers will desire convenience, as they may want to take their food away or eat it on the go. Options for you to consider include cardboard takeaway containers, polystyrene trays, paper napkins, cups for beverages and paper bags for larger orders. You may also need to supply cutlery.
Keeping all areas of your shop clean is imperative. Food preparation, baking and storage areas are particular areas that should be cleaned regularly throughout the day, to avoid cross-contamination and the breeding of bacteria. You will likely need different cleaning materials for different parts of your shop. You may need to invest in cloths, sponges, antibacterial surface cleaners, bleach, sanitiser, dishwashing soap and a sweeping brush and mop.
Personal Protective Equipment (PPE)
PPE is a necessary purchase for all food businesses, as it helps to protect your food from contamination. PPE can also protect you and your staff from harm (e.g. when using sharp instruments or hot equipment). Some PPE you may require includes hairnets, gloves, oven mitts, anti-slip footwear and aprons.
A website is useful for advertising your business. It should contain your contact information, descriptions of your services, your pricing, your location and personal information and your customer reviews. Design your website to include your business logo and to reflect your branding.
A fully stocked first aid kit
A first aid kit is a necessity, as you will be working with potentially dangerous equipment and products. A first aid kit can also be used if any customers sustain an injury in your bakery. Ensure your first aid kit is restocked regularly and is easily accessible.
Keep in mind that if you choose to set up a bakery business that has a café or a seating area for your customers to sit, you would have additional equipment requirements, such as:
- Tables and chairs.
- Table décor items.
- Salt, pepper, sauces and other condiments.
- High chairs for babies and toddlers.
- Napkin dispenser.
When you are planning your gluten free bakery business, you will need to calculate the approximate costs associated with setting up and running this type of business. Calculating your typical costs allows you to estimate your initial investment requirements, any monthly and annual costs, your pricing strategy, your profit goals and your acceptable profit margins.
There are multiple costs associated with setting up and running a bakery business. Some of these costs will be one-off initial costs that you will need to pay when you are setting up your business. Other costs will be ongoing costs you will need to pay regularly – usually weekly, monthly, quarterly or annually.
Although the typical costs can vary, depending on the type of bakery you set up and the size of your business, the typical costs you can expect to be responsible for include:
Your bakery premises
Your bakery premises will likely be your biggest expenditure. You will need to rent your premises on a monthly or annual basis. Rental prices can vary significantly, depending on the location and the size of the premises. City centre locations and newly built premises usually have the highest rental costs. Rental costs are often calculated per square metre. They can range significantly, from £500 to £15,000 per square metre annually. Your rental cost may be higher if you are renting an already established, refurbished or equipped bakery business.
Refurbishment and installation costs
Unless your premises previously operated as a bakery, you will likely need to refurbish or convert your venue to install the equipment you need for your bakery business and make the area fit for purpose. You will also want to refurbish and decorate your premises to fit the aesthetic of your business and make it attractive to customers. Renovation costs can vary, from £500 to £20,000 depending on the level and scale of work required. As part of your renovation costs, consider how you can make your bakery easy to clean and ensure it is safe and in line with health and safety regulations.
This will be another major expenditure. Your equipment is an essential purchase, as without it you will not be able to operate your bakery. The cost of equipment can vary depending on the type of equipment you choose and the amount of equipment you require. You may choose to purchase less equipment initially and expand your equipment as your business grows. Equipment for your bakery can cost between £5,000 and £50,000.
Stock and ingredients
This is an ongoing cost you will have to factor into your budget. It includes any stock and ingredients you will need to create your products, such as different types of gluten free flour, eggs, baking powder, sugar, salt, dairy, fats and icing. You will likely need to order these ingredients regularly. You can reduce the cost of your stock by buying wholesale, buying in bulk and shopping around. To maximise your profits, your food stock cost should be no more than 30% of your food sale price. The higher the return, the higher your profits will be.
Maintaining, repairing and replacing equipment
Repairs, maintenance and replacements are ongoing costs you will need to factor into your budget. Although some of your equipment and machinery will come with warranties, repairs and replacements are inevitable – particularly because you will be using the equipment continuously. Correctly cleaning and maintaining equipment and ensuring it is used correctly can extend its life, but potential repairs and replacements should still be factored into your budget.
These are the day-to-day costs associated with running your business. Some running costs are paid monthly, and others are paid quarterly or annually. Your running costs can include electricity, gas, water, council tax and insurance. To maximise your profits, try to keep your running costs as low as possible.
It is unlikely that you will be able to run your bakery alone. You may need to hire staff to help you run your business, for example, bakers, cleaners and front of house staff. You will need to pay any staff you employ at least the national minimum wage of £9.50 per hour and account for other expenses such as holiday pay, sick pay, maternity/paternity pay, National Insurance and any company pension contributions.
When creating your brand identity, consider how you want your business to be perceived by potential customers. When creating your brand, consider the bakery you are setting up, the baked goods you offer and your typical customer base. You will likely want your branding to focus on your business being gluten free. Branding can include creating your business’s visual identity, design and aesthetic, your business name and logo and your website. You could hire a professional to help you with branding or do some or all of the work yourself. Branding can cost between £500 and £10,000, depending on the level of work required.
Advertising and marketing
To ensure your bakery attracts customers and creates maximum profits, you will need to spend money on advertising and marketing. It is recommended that you spend between 1%-3% of your annual turnover on marketing. For example, if your annual turnover (or your desired annual turnover) is £60,000, you should spend between £600 and £1,800 on advertising and marketing. You may need to invest more money when you initially set up your business or when you are trying to grow your business. To reduce your costs, capitalise on free marketing strategies, such as on social media or in your local community.
There are multiple coverage options available for a gluten free bakery business including:
- Public Liability Insurance.
- Employers’ Liability Insurance.
- Product Liability Insurance.
- Equipment Insurance.
- Business Interruption Insurance.
- Contents Cover.
- Personal Accident Cover.
Insurance prices can vary depending on the level of coverage you choose and your insurance provider. Prices typically start from £10 a month for a basic level of insurance.
You and your employees will need to obtain food hygiene training before you open your business. You will also need to refresh your training regularly (at least every three years). You may also opt to undertake other training courses, such as manual handling, first aid and electrical safety. You can expect to pay approximately £20 per training course per person.
Typical Pricing for Customers
Once you have calculated the typical costs associated with setting up and running a gluten free bakery, you can then determine your price points.
You will likely have multiple price points and your pricing strategy will depend on multiple factors, for example:
The types of baked goods you will sell
There are a huge number of gluten free baked goods you could choose to make. Different products will have different price points, for example, an occasion cake will be more expensive than a loaf of bread.
The type of bakery business you set up
Because a commercial bakery sells its products to other businesses at wholesale prices, this means its price points will be lower. A retail bakery sells its products directly from its bakery to customers, which typically means higher price points for each item.
If you operate a retail bakery, your location will be a key factor when you calculate your price points. This is because your location will be a major determiner of your typical customer base. Depending on your location, you may target budget, mid-range or high-end customers, with different types of customers willing to pay different prices. Consider your location and your typical customers when determining your price points.
Safely Running a Gluten Free Bakery Business
Safe practices in your bakery can help to protect the health, safety and well-being of you, your staff and your customers.
Some ways you can safely run your gluten free bakery business include:
Follow guidelines on foods that may contain traces of gluten or allergens
Follow guidelines on foods that may contain traces of The Food Standards Agency has provided voluntary guidelines on labelling products that may contain traces of gluten or another allergen. For example, if the foods were prepared in the same area as gluten or an allergen, you should label your products accordingly so that your customers can make an informed decision.
Examples of the labelling terms you could use include:
- May contain traces of gluten.
- Made in a factory that also handles wheat.
Pay attention to the Hazard Analysis and Critical Control Point (HACCP) principles
The HACCP principles help you to manage food safety hazards that could arise when storing, preparing and baking food. You can identify potential risks and implement measures to ensure these risks are reduced or removed. You should also keep records of any actions you take in line with HACCP.
Safe storage of stock
As part of your baking business, you may store frozen, refrigerated and cooked food. This food must be stored at the correct temperatures to prevent spoilage or deterioration. You should also ensure food is covered to prevent cross-contamination.
Ensure correct baking temperatures
All cooking businesses, including bakeries, must ensure they are cooking at the correct temperature. This is to reduce or eliminate the risk of food poisoning. Ensure your oven or other cooking equipment is set to the correct temperature and use a food thermometer to ensure food is thoroughly cooked.
Cleaning and washing of equipment and surfaces
Having effective cleaning procedures is essential to any food business. It is recommended that a cleaning schedule or cleaning policies are in place that cover the cleaning of equipment, surfaces, and food preparation and storage areas. As part of your cleaning requirements, ensuring the personal hygiene of you and your employees and providing handwashing stations for staff and customers can also help you to safely run your business.
Conduct risk assessments
Although not a legal requirement for businesses with fewer than five employees, risk assessments can help to eliminate risks and ensure safe practices in your shop. As part of your risk assessments, you should:
- Identify hazards.
- Determine who could be at risk.
- Evaluate any potential risks.
- Implement relevant safety measures.
- Record the results of the risk assessment.
- Review the risk assessment regularly.
You should keep physical records of your risk assessments as evidence of your commitment to safe practices.
Keep clear and accurate records
When you are inspected by the Environmental Health Office, the officer will likely request to see up-to-date records of your business’s cleaning schedules, risk assessments, health and safety policies, allergen information and temperature checks. Keeping such records not only helps to protect your business and improve the likelihood of you receiving a higher score, but it also ensures procedures are followed at all times.
Wear Personal Protective Equipment (PPE)
Some of the PPE you may require include latex gloves, protective aprons, hair coverings and protective footwear. PPE can help to prevent cross-contamination of the food and help to protect you and your clothing.
Properly maintain and set up equipment
Any equipment you use must be properly maintained, correctly set up and safe to use. You must protect yourself, your staff and your customers from accidents or injuries caused by equipment. You should also perform regular equipment inspections to ensure your equipment’s safety and help extend the lifespan of your equipment. Maintenance includes regularly checking for faults, regular cleaning and ensuring it is functioning correctly.
Implement security measures
Security measures can be implemented to protect your business. Your bakery will likely store a lot of expensive equipment. Some ways you can protect your business include installing a CCTV system, using secure and reliable locks and installing an alarm system.
Keep a fully stocked first aid kit
If someone in your bakery has an accident or sustains a minor injury, it may not be serious enough to warrant medical intervention. Instead, you may be able to offer treatment yourself. Having a first aid kit that is checked and replenished regularly and is easily accessible is recommended.
Health and safety training can help to ensure safe practices in your bakery and can ensure that you and any staff you employ are aware of and adhere to safety procedures. Some training you can complete includes COSHH Awareness, HACCP, RIDDOR Awareness, First Aid, Fire Safety Awareness, Assessing Risks and Electrical Safety.
Complying with legal requirements is essential when setting up and running your gluten free bakery.
Some legal requirements you should be aware of include:
Comply with gluten free regulations
The term gluten free is set out in European regulations and UK law. As a gluten free bakery, it is essential that you comply with all regulations concerning gluten. To label your products as gluten free, you must ensure they contain 20 parts per million (ppm) or less of gluten.
Follow the Food Standards Agency guidelines on labelling
If you produce, manufacture or package any food in the UK, you must follow the guidelines set out by the Food Standards Agency regarding the information that must be included on a food label. Some of the information you must include on your label includes:
- The name of the food.
- A complete list of ingredients.
- The allergen information.
- A quantitative declaration of ingredients (QUID) – i.e. the percentage of each ingredient contained in the food.
- The net quantity of the food (if it is above 5g or 5ml).
- The storage conditions.
- Date labelling, i.e. ‘best before’ or ‘use-by’.
- Name and address of the manufacturer.
- Country of origin or place or provenance.
- Preparation instructions.
- Nutritional declaration.
- If your product contains certain ingredients such as sweeteners or caffeine.
Comply with allergen regulations
If your products contain any of the 14 named allergens:
- Milk (cows)
- Sesame seeds
- Sulphur dioxide
You must clearly state these on your packaging and this information must be clearly highlighted (for example, in bold text or underlined). If your food contains other allergens, these must be clearly listed on the label, although they do not need to be highlighted.
Register as a food business
Any business in the UK that sells food must register as a food business with their local council. You must apply for your food business registration at least 28 days before you begin trading. You can apply for your registration on gov.uk, and it is free of charge.
Register with an organic control body
If you plan to sell any organic bakery products, you will need to register with an organic control body before you are legally allowed to label your food as organic. You can search for your local governing body and apply for registration on gov.uk. To gain your registration, your products will likely have to be 95% organic.
Comply with the Food Safety Act (1990)
Under the Food Safety Act, you have several key responsibilities:
- Don’t take away or add any ingredients that could cause the food to become harmful.
- Don’t treat the food in any way that could cause it to become dangerous.
- The nature, substance and quality of the food must be to the standard that customers expect.
- Your labelling and presentation of the food should not be false or misleading.
Display your food hygiene rating
Once you have registered your business, you will receive an inspection from the Environmental Health Office (EHO) to determine your food hygiene rating.
The inspector will assess your:
- Food storage.
- Food handling.
- Food preparation.
- Food cleanliness.
- Food safety management system.
Once you have received your food hygiene rating, this information should be clearly displayed on your premises.
Comply with the Bread and Flour Regulations (1998)
The Bread and Flour Regulations must be followed by all baking businesses. The regulations state the nutritional value of bread and flour that must be adhered to.
These regulations also cover information such as:
- Essential ingredients.
- Iron powder specifications.
- Non-permitted ingredients.
- Composition of flour.
Comply with the Meat Products and Spreadable Fish Products Regulations (1984)
If your bakery sells any meat products such as sausage rolls, meat pies or sandwiches, you will need to ensure you comply with this legislation. It concerns how you name and label meat products and the minimum meat content that is required by law.
Ensure all staff have food hygiene training
All food businesses must ensure staff are trained in food hygiene. If you receive a visit from the Environmental Health Office (EHO), a food hygiene certificate is the best way of demonstrating your compliance. It may also increase your likelihood of being awarded a five-star food hygiene rating.
Implement a Food Safety Management System (FSMS)
Food businesses in the UK must implement a Food Safety Management System. An FSMS is a systematic approach to controlling food safety hazards. It ensures that your business is following safety protocols and will influence your food hygiene rating.
In the kitchen and any other food preparation areas, you will need separate handwashing facilities and cannot use the same sink for handwashing and food preparation or equipment. Each sink should have an adequate supply of both hot and cold water. All sinks will also need to have an operational drainage system.
Apply for a Waste Carrier Registration
If you need to transport any waste, you will need to register as a low-tier waste carrier in England, Wales or Northern Ireland or a professional collector or transporter of waste in Scotland.
Comply with the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 2013
RIDDOR states that you must report all injuries, diseases and dangerous events that occur in your business. Reports must be made to the Health and Safety Executive (HSE) using an appropriate recording document. These regulations apply to any incidents that involve employees or customers.
Comply with the Control of Substances Hazardous to Health (COSHH) Regulations 2002
The COSHH regulations state that you must control any substances that are potentially hazardous. You should also assess, control and reduce any risks or potential hazards and protect people from harm. Some hazardous substances you should be aware of are:
- Flour dust.
- Improver dust.
- Protein dust.
- Concentrates of flavour, citrus oils and spices.
- Cleaning substances.
Comply with the Manual Handling Operations Regulations 1992
Manual handling regulations can help to protect you and your employees from sustaining an injury or illness as a result of manual handling tasks. The regulations apply to the lifting or moving of any objects, bending down and reaching high and repetitive movements. You will likely be performing manual handling activities when performing tasks such as kneading and rolling and when handling large or heavy equipment.
Comply with the Provision and Use of Work Equipment Regulations (PUWER) 1998
PUWER regulations apply to you and any employees you hire. You must ensure any equipment in your bakery is fit for purpose and is maintained and inspected regularly. You must also ensure that health and safety risks are minimised to an acceptable level, that you have the correct knowledge and training to use the equipment, and that protective measures are put into place. Equipment should also be used under appropriate conditions.
Comply with the Electricity at Work Regulations 1989
The Electricity at Work Regulations state that any workplaces that use electricals must construct electrical systems in a way that prevents danger, maintain electrical systems to ensure they are safe, ensure electrical equipment is checked by a competent person annually and conduct Portable Appliance Tests (PAT). This includes any electrical equipment in your kitchen.
Comply with gas safety regulations
If you have a gas boiler you will need to have it inspected by a gas safe engineer. If your equipment is deemed safe to use and complies with government requirements, you will be issued a Gas Safety Certificate. You will need to display your gas certificate clearly for your guests and other visitors to your business to see.
Comply with fire regulations
As the business owner, you are responsible for fire safety measures in your bakery. There are multiple fire regulations you must ensure you comply with. For example:
- Perform a fire risk assessment.
- Comply with the Regulatory Reform (Fire Safety) Order 2005.
- Implement any necessary fire safety measures.
- Implement emergency procedures and ensure these are clearly displayed.
Appoint a competent person
A competent person should be appointed to help your business meet your health and safety legal duties. You can act in this role yourself or appoint another person to fulfil this role. The competent person should have the skills, knowledge and experience to identify any hazards in your business and put controls in place to protect people from harm.
Prepare a health and safety policy
The law states that every business in the UK must have a specific policy for managing health and safety. Your policy should state exactly how you will manage health and safety in your bakery and state who is responsible for specific tasks and how and when these tasks are completed. Follow the recommended tips from the Health and Safety Executive when creating your health and safety policy. You should make your policy easily visible to any visitors to your business.
Apply for a music licence
If you play any music in your bakery you will need to apply for a licence with the Phonographic Performance Limited (PPL) and/or a Performing Right Society (PRS) Licence. You can apply for both PPL and a PRS online.
Appoint a first-aider
All workplaces in the UK must have an appointed first-aider. In the event of an accident or injury, you will then be able to administer the necessary first aid. Although a first aid qualification or certificate is not legally required, it is the easiest way to demonstrate your first aid training.
Comply with employment legislation
If you employ any staff, you must ensure you follow employment legislation, including the Employment Rights Act (1996) and the National Minimum Wage Act (1998). You must also comply with legislation relating to recruitment, working hours, sickness, discrimination, dismissals, and maternity or paternity pay.
Register your business
You must register your business with HMRC before you begin operating. You can register as a sole trader or as a limited company. You will need to register your business name and any other relevant information.
Register for self-assessment tax
This allows you to calculate and pay your own taxes each year. You will need to track your finances every month and submit any expenses as part of your tax assessment.
Positives of Owning a Gluten Free Bakery Business
Owning a gluten free bakery can be rewarding in many ways. Some of the main positives associated with this type of business include:
A growing market
With more and more people choosing to follow a gluten free diet, this industry is constantly growing and in some areas demand outstrips supply. Now could be a great time to establish yourself in this industry and allow you to grow your business and maximise your profits. There are very few completely gluten free bakeries, which allows you to tap into a potentially lucrative niche.
Create delicious gluten free products
Many people who work in the gluten free industry either have a gluten-related health condition themselves or somebody close to them does. Getting involved in this industry allows you to create delicious products and make baked goods more accessible and safer for people who have difficulties eating gluten.
Do something you are passionate about
If you are passionate about baking and love baked goods, setting up your own baking business can be extremely rewarding. You can do something you love every day and will have the opportunity to create your own recipes and designs and be creative with your baking. Profiting from your passion can be very rewarding.
Start small and grow your business
If you don’t have an external investor or a large capital with which to start your business, you can start smaller and grow your business in time. Instead of setting up a bakery, you have the option to initially start small, for example, by opening a gluten free home baking business. As your profits and your customer base grow, you can then expand your business by opening a bakery. This gives you flexibility.
Choose the type of bakery you want to run
You already know you will be specialising in gluten free products, but there are other ways you can design your bakery to ensure it is in line with your passions and creativity and any local demand. You can choose which products to sell, the design of your premises, your price points, and the type of bakery you run. This offers you creative freedom and self-sufficiency.
You can be creative with your products. You have the opportunity to be creative with your designs and decoration and the flavours, textures and ingredients to create the perfect products. If you love being creative and artistic, running a bakery can be enjoyable and rewarding.
As a baker, you won’t be sitting around staring at a computer screen all day. You’ll be active for a lot of the day, involved in different tasks, running your bakery and talking to customers. This is great for people who don’t want a traditional office job.
Create a positive work environment
You will be responsible for hiring staff and creating staff policies. This gives you the opportunity to create a positive work environment. You could hire staff that you know will bring positivity to the bakery and will be an asset to your business. Your staff will also likely be like-minded people who are also passionate about baking.
Design your dream business
Regardless of what type of bakery you choose to set up, you can design your perfect business. This includes the type of bakery you set up, the size of your business, the baked goods you make and the types of equipment you purchase. You can also design your business’s aesthetic and branding to ensure it reflects you and the type of business you want to run.
If you are an outgoing person and you enjoy speaking to people from all different walks of life, you will likely enjoy working in a customer-facing business. You can get to know your customers and spend time talking to them every day. Because businesses such as bakeries usually experience a lot of repeat business, you can really get to know your customers.
Potential for expansion
There are many different opportunities for expansion, for example, you could begin offering a delivery service, hire more bakers, extend your premises to offer a seating area and even open additional bakeries. Having the option to grow your business maximises your business opportunities and provides you with more opportunities for success.
Unlimited income potential
As your business and your reputation grow, you are likely to see increased demand and higher profits. You may then begin to charge higher prices. You could also grow your business and open more bakeries in your area or even in other areas of the country. The gluten free industry is constantly growing, giving you plenty of opportunities for success and unlimited income potential.
Be your own boss
You can make all key decisions yourself and steer your business in whichever direction you choose. You can choose how involved you want to be, the type of bakery you open and how you want to run your bakery. You can make the best decisions for you and your business.
Be involved in your local community
Butchers, bakers, greengrocers and newsagents used to be the pillars of the local community and with many people wanting to return to that local community feeling, your business is likely to be highly appreciated by many. You can also involve yourself in local community events and get to know people who live in your area.
Negatives of Owning a Gluten Free Bakery Business
Although starting up a gluten free bakery business can be rewarding in many ways, there are some potential negatives of this type of business that you should be aware of. For example:
Early mornings and long working hours
Bakers often have to start very early in the morning to ensure their products are baked, cooled and decorated before the bakery opens. You will then have to keep the bakery open long enough to sell your stock and make a profit. You will also have to consider the time it takes to order ingredients, clean and do your business accounting. This can be time-consuming and mean you work long hours every day. You may also have to work weekends. This could result in your business affecting your personal life or even your sleep.
Ingredients and stock can be expensive
Bakeries require expensive ingredients, such as butter, chocolate and sugar. Furthermore, the cost of ingredients for a gluten free bakery is even higher, because flour without gluten is more expensive than standard flour. Although you can sell your products for a higher price, a bakery often has low markup costs compared to other businesses. Additionally, any products that are not sold or that begin to go stale will significantly affect your profits.
Spoilage can affect your profits
Baked goods spoil quickly, with many baked goods needing to be sold the same day they are baked. Up to 25% of all baked products in a bakery fall victim to spoilage and become food waste. This can have a significant impact on your profits, as the amount of ingredients and time required to make them is wasted.
The food industry is highly regulated
This is a highly regulated industry, with a large number of laws and regulations you must be aware of. You need to ensure you follow all policies and procedures, particularly those relating to health and safety. Not only can it be time-consuming (and sometimes expensive) to ensure compliance, but failure to comply, even unintentionally, could have serious consequences.
High start-up costs
A bakery business has a lot of associated costs including the cost of the premises, staff, equipment, ingredients and overhead costs. The high initial investment that is required can make it more difficult for you to start up a baking business. Not only does this mean you may need to source outside investment, but it also makes your business high risk. Having a large initial investment also means it will take longer before you begin turning a profit. You will also need to ensure consistent profits to cover your monthly costs, which can also be high.
Your profits may not be consistent
Some days are likely to be busier than others and sometimes this can be difficult to predict. It could also be that you receive more business at certain times of the year. This can make it difficult for you to predict your profits, order your ingredients and plan how many of each product you should bake every day.
It can be high stress
As the business owner and baker, you will have a large number of responsibilities. You will be responsible for every aspect of the business, including marketing, ordering ingredients, baking and running the business. This can be highly stressful, especially when your business first opens.
It can be competitive
Not only are you competing with other gluten free bakeries, but gluten free products are becoming increasingly popular in supermarkets and other shops. Many cafes, coffee shops and restaurants have also introduced gluten free products to their menus. Having so much competition can make it more difficult for your business to succeed.
A lot of skill, knowledge and experience is required
To run a successful bakery business, you will need to be highly proficient in a variety of skills and will need to have a lot of baking knowledge and knowledge of the gluten free industry. You will also need to have extensive experience baking or working in a bakery. It can be time-consuming to gain the appropriate skills and experience to make your business succeed.
High risk of your business failing
Starting up a gluten free bakery business can be risky. Many new businesses fail which could result in you losing money or getting into debt. Your business could fail for several reasons, such as high local competition, an ineffective business plan or if the UK encounters another recession or period of financial difficulty. Because a bakery requires a high initial investment, if your business fails, you will potentially lose a significant amount of money.
As you are self-employed, you won’t receive benefits such as pension contributions. You will also be responsible for doing your own taxes and organising your National Insurance contributions. You will also have a lack of job security.
It can be physically demanding
Not only will you be on your feet all day, but you will also be handling heavy machinery and difficult tasks every day. The repetitive movements and strength you will need when making your products can also result in strains, pain or even injury. Working in a bakery can be physically demanding, tiring and potentially risky.
High risk of food poisoning and cross-contamination
Many people don’t associate baked goods with food poisoning, However, you will be working with high-risk ingredients, such as flour and dairy. Baking and selling your products means there could be a risk of food poisoning, which can be extremely dangerous, causing illness or, in serious situations, even death. Your business could be held liable if a customer becomes ill after eating your products.
Planning Your Gluten Free Bakery Business
An effective and well-designed business plan is essential to the success of your gluten free bakery. A business plan can help you to focus on the specific steps that will help your business succeed, plan your short-term and long-term goals, determine your financial needs and help your business to grow.
When creating your business plan, ensure it contains information such as:
- Your company information.
- Your company description.
- The services you will provide.
- Your branding, marketing and advertising plan.
- The structure of your business.
- The operational plan for your business.
- The financial plan for your business.
Some of the factors you will need to consider when creating your business plan are:
The type of bakery business you are going to set up
Deciding what type of bakery business you are going to set up is the first step when planning your business. Will you operate a retail or commercial bakery? Will your bakery be counter service or will you offer a seating area? The type of bakery you set up will impact your premises, staff requirements, your target customers, and the types of products you sell. Consider your local competition, your budget, and your own baking and business skills when deciding what type of baking business you will run.
The types of baked goods you will sell
All of your baked goods will be gluten free. However, you still need to decide exactly what baked goods you are going to sell. You may choose to specialise in a particular product, such as occasion cakes, bread or pies, or you may offer a wide variety of products. You could also consider whether you will offer products such as sandwiches with fillings, pizzas with toppings and sweet and savoury baked goods.
Your business summary
Your business plan should include a detailed overview of your business, including your location, the size of your business, the type of bakery, the products you will sell, your equipment and your business goals.
Your local competition
Being aware of other baking businesses can help you decide what type of business to run and how much to charge your customers. If your local area already has several successful bakeries, you may want to focus on an untapped niche and target different customers. Focus more on gluten free businesses rather than traditional bakeries when considering your local competition.
Your target market
Determining your target market is a key step to helping your business succeed. Different types of bakeries and different baked products are likely to attract different customers. Your pricing strategy will also be a key factor in determining your target market. Once you have identified your typical customers, you can then focus on how to attract them to your business.
Your equipment requirements
Consult the list above to determine your equipment requirements. The equipment you require will depend on the type of bakery business you set up and how big your premises is. Once you have determined your equipment requirements, you can then calculate the initial costs of purchasing the equipment and the monthly replenishment costs, e.g. for stock and ingredients.
Your start-up costs and running costs
Consult the list above to help you calculate the approximate costs of setting up and running your business. Determine what equipment you need and the amount of equipment, as well as the cost of your premises, to help you determine your start-up costs and what your initial investment requirements will be. You can then calculate whether you can finance your business yourself or whether you need to source outside investment, for example, from a bank or an independent investor. Determining your start-up costs and running costs can also help you to create a budget and predict when you will begin to turn a profit.
Financing your business
Consult the list of start-up costs and running costs above to determine what capital you will require. Can you finance the business yourself or will you need to source outside investment? You will also need to calculate when you are likely to begin turning a profit. If you require outside investment, you could consider a bank or other financial institution, a business loan or an investment partner.
Your price points
When determining your price points, consider the cost of your stock and ingredients and the time it will take to make each item. You should also take into account the average cost for each type of baked good (e.g. the average cost of a gluten free brownie) and the pricing of your competitors.
Your sales forecast
What is your average footfall likely to be? How many sales do you predict you will make each day and week? As your business grows, your sales forecast is likely to change.
Creating your brand is a key way to ensure you stand out from your local competition. Branding can help you to focus on your target customers, attract clients and concentrate your marketing and advertising strategies. Some ways you can create your brand are by focusing on your business’s visual identity and creating a brand story. Your business name and logo are also part of your branding so ensure you consider these when creating your business plan.
Your marketing and advertising strategy
There are many ways you can choose to advertise your business. These can include partnering with other businesses in your area, advertising in your local community, advertising on social media and using paid online ads. Your marketing and advertising plan should detail what your brand is and how you plan to promote your business. As part of your marketing strategy, consider the most effective way to reach your target audience and attract potential customers. Create an advertising plan that is specific to the type of business you are going to run and how you plan to operate.
What are your business objectives?
Your business objectives are crucial for creating a successful business plan. Your business objectives highlight the targets and goals of your bakery and help you to create a one-year, three-year and five-year business plan to help you grow your business. .
Your business objectives should be SMART:
- S = Specific
- M = Measurable
- A = Achievable
- R = Realistic
- T = Time-bound
Have you complied with all legal requirements?
Consult the list of legal requirements above to check you have complied with all requirements and regulations and that all your paperwork is accurate. Failure to comply with legal requirements could have a detrimental effect on your business or could result in a fine, the forced closure of your business or, in serious cases, prosecution.