The cheapness of carriage of flour in the bulk and its dearness when manufactured into bread, which is at once bulky, fragile, and heavy, suggests readily the idea that it would be well to have branches set down in localities where there is a consumpt of bread large enough to work them successfully; we consider Johnstone a place of this class, and desire to lay before you, in detail, some of the reasons why we think so.
In making Johnstone a district with a branch bakery we would class the following societies together, viz.:—Paisley Provident, Paisley Equitable, Howwood, Elderslie, Kilbarchan, Linwood, and Johnstone. Taking October balance as an average of the bread taken by these different societies, we find in the aggregate that the six societies first named took bread to the value of £892, 10s. 6d., and that Johnstone Society took bread to the amount of £884, 12s. 9d., a total of £1,777, 3s. 3d., or within £100 of being a third of all the purchases made at the Bakery during the quarter. The Johnstone Society’s quantity, £884 a quarter, averages something like sixty-four dozen loaves daily, the outcome of four sacks of flour; say, then, with the other societies named, eight sacks of daily consumpt. The weight of this number of sacks, in the bulk, is one ton (twenty cwt.), and the price of carriage and delivery in Johnstone, from Glasgow, is four shillings. These eight sacks, made into bread in Glasgow, gives a weight, including boards, of over thirty-four cwt.; this is exclusive of vans, which, we believe, are about half as much more, or seventeen cwt. each. In this condition, then, of baked bread it costs your Society thirty shillings or over daily to deliver to the various societies of the named district. Supposing, then, that you had a branch in Johnstone and a more restricted delivery system adopted, we entertain no doubt but one horse and van could overtake the whole three mile radius, give and deliver the required bread to the different societies. The cost of this would be about twelve shillings a day, which would leave a clear profit to the Society of fourteen shillings a day, or £54, 12s. a quarter, nearly £220 a year.
Another View of the Case.
We have had an interview with a practical managing baker, and his estimate of the cost of production is much below your present expense; he considers that the quantity required (eight or nine sacks a day) could be baked into loaves at a cost of three shillings per sack (he laid stress on the fact that the job was loaf baking alone, and said that men were able and really did do more of this kind of work). Buying the flour at the then price of fifty shillings per sack, and adding three shillings for baking, rent, etc., we have a gross cost of fifty-three shillings per sack. The outcome from this quantity of flour should be sixteen dozen small loaves; retailing them at the then price of 4¼d. each, you have the sum of sixty-eight shillings; 10 per cent. less would be sixty-one shillings and twopence, or a profit of eight shillings and twopence on each sack baked and sold; this eight times (a daily output) would give sixty-five shillings and fourpence per day, or £19, 12s. a week, £254, 16s. a quarter. But allowing half this quantity has to be delivered to societies, and say this will cost three shillings per sack, which would give a total cost of about £48, 15s., which sum deducted from the £254, 16s. would still leave the sum of £206 a quarter of a clear profit realised from the business done by the seven societies comprising the proposed district.
Regarding the practical part of the scheme we have nothing to offer in way of a ready-made bakehouse or other suitable premises, and we are afraid that should the business be gone into, as proposed, new premises would require to be got; on this, however, we ask your consideration to the fact that your present premises have not the necessary storage for flour which your large turnover requires. This is attested by the proposal which was made six months ago for alterations, and if it is true, as we believe it is, that properly stored flour is from one to two shillings a bag better in outcome than when used as has hitherto been done at the Bakery, one shilling on each sack baked for a quarter, say 1,800 sacks, and you have a sum of £90.
The alterations which were proposed and were estimated to cost about £200 have never been carried into effect, consequently the Bakery labours under the disadvantage of want of storage at a loss equal to something like £90 a quarter.
We know full well the high cost of distribution, and some are sanguine the productive cost could also be lessened; could not this sum, then, of £200, or say £300, required for storage purposes be laid out on a branch bakery in the Johnstone district, and take away a third of the trade from the centre; you would then have storage to suit your requirements for some time to come, very probably you would be less for productive expenses, and most certainly your cost of distribution would be so much curtailed as to release the Federation from the incubus which at present keeps her down.
Gentlemen, our aim and earnest desire is the prosperity of the Federation and its component parts; we lay these considerations before you and leave the matter in your hands, being confident your united wisdom will be well able to direct the path which will earliest and best lead to better and happier times for the United Co-operative Baking Society.
The Johnstone Society’s Committee.
Johnstone, 21st February 1873.