It may seem backwards, but it is forwards:

Total ingredient cost for a $3 loaf is about $0.75. Adding in cracked grains or seeds brings it to c. $1.50 for a $5-6 loaf. Total ingredient cost for a $20 pizza is about $3. This is for a "good" pizza. A Pizza Hut-grade pizza is probably $1.50-$2.00 in ingredients and sells for $9-10.

Now: bakeries do not sell every loaf of bread they bake. Quite a bit of bread goes stale, gets made into breadcrumbs, thrown out, sold at discount, donated to food pantries.

Pizza has much less spoilage because of the process: most ingredients, including the dough, are refrigerated. The dough needs 48h (could be as short as 24h) to ferment, but then stays good in the fridge for days. As long as you have a big enough fridge, the inventory problem is pretty simple to manage. Cured meats (sausage, pepperoni) have a long shelf life with refrigeration, as does cheese. Vegetables also last for days. The end result is that (albeit with some added costs from refrigeration) you're able to make the products on-demand as the orders come in. With bread, the product must be prepared well in advance and there's more waste.

A well-run pizzeria is pretty lean on labor, too. Plenty of pizzerias get by profitably with one or two men in the kitchen and one man at the counter.

But if you don't believe me, believe the market: most bread is produced industrially, sealed in plastic, and shipped to retailers on trucks. Small profitable pizzerias are ubiquitous.

I'd love to see how one comes to these number. $0.75 is either very expensive flour, or a very large loaf sold too cheaply. Adding seeds (at what, 5-10% of the weight of the flour?) to a loaf doubles the ingredient cost? Glancing at bulk commercial prices, sesame seeds added at (the unrealistically high) 20% of a loaf made with 500g flour should be about $0.29. Poppy seeds almost gets you there if you use the unusually high 2018 price, at $0.65.

$3 of bulk part-skim mozzarella is generously something like 250g worth. That's skimpy for a large pizza. The rest of the ingredients for this "good" pizza are free?

A bakery that's throwing out too much is baking too much, or there's no market for their bread. That's nothing to do with the margin on bread being thin. Small profitable bakeries are ubiquitous where there's a market for them. See: France.

Typically the method used to get these numbers is arithmetic. HG flour is $22 per 50# wholesale, bulk, delivered. Organic HG is $48 for the same. A bag of flour is about 30 loaves (we scale recipes to the 50# bag). Typically the artisanal seed stuff will get the higher grade flour.

Shredded mozzarella is $52 per 20# wholesale, bulk, delivered.

Et cetera.

Certainly if you are in a different market, the economics could be different.

Hope this helps you understand.

Okay. What I'm gathering from this is that if one tries to sell artisan bread at prices competitive with Wonderbread, and overcharges for bottom-barrel pizza cheese, one might fall under the illusion that low margin items are high and vice versa.

Excuse my spiciness, but you did just hit me with that arithmetic quip.

A 5 buck loaf is certainly not in the wonderbread territory. Its both a mix of far more expensive and smaller in size.

A $3 loaf was described above. 50lb bag of flour making 30 loaves. At a pretty standard 60% hydration, the resulting loaf is both heavier and cheaper by weight than a loaf of Wonderbread usually is.

I suppose it could end up substantially smaller in volume if poorly made.

The cheese is good quality. These are the real economics of the market in a major USA East Coast city. My friend's been profitable for decades. Grocers out here sell pretty good loaves as loss leaders; you can call something artisanal all day long, but if you're charging too much, you're not competitive.

When I worked at in an in-store Supermarket Bakery years ago the target gross profit was 70%. So a $1 loaf would have 30 cents worth of ingredients.

The ingredients are not the only cost. Labor (time), rent, etc. all go into margin.

A loaf of bread bakes for 30-60 minutes. A pizza bakes for 3-10 minutes, so you can bake a lot more pizzas than bread loaves in a day. You can probably also sell more pizzas than bread loaves in a day.

Margin on ingredients specifically was mentioned. Anyway, I contend that pizza is more labour intensive than bread.

You can fit many loaves of bread in the oven space of one pizza.

No doubt that in some circumstances, pizza is a more viable business model than bread. I'm just skeptical that the margin on a pizza sale is typically better than bread.

For prep work, you can store pizza dough as little balls, or pre-flatten them and put them on racks, freezing many more pizza doughs than bread doughs. Preparing a pizza crust is as easy as using a press, but to make consistent bread you need a complicated machine that's annoying to clean. Bread also needs a proofer if you're serious about mass producing it, hence needing more space. Otherwise you can enjoy handcrafting your bread and cultivating yeast, which is another art and science all to itself.

While less pizzas fit in a pizza oven than bread may fit in a bread oven, it's easier to prepare pizzas, easier to hire for, and people pay more for them.

Pizza dough is bread dough, the process is the same up to a point. In making loaves, you will have them portioned as balls at some point, same as pizza. You will shape them and put them on racks, same as pizza (pizza stacks/packs more efficiently here, but that seems irrelevant. Bakeries aren't in the habit of mass storage of shaped dough). Shaping a loaf can be a few seconds with your hands, same as pizza. Labour saving devices, like a dough sheeter for pizza, is just that in either case: labour saving. Bread loaves can be made with or without a proofer, as can pizza.

Preparing and hiring for something like Pizza Hut or Domino's is undoubtedly easier. But at an independent bakery, I really don't see the case for pizza being a higher margin item.

Pizza dough typically has oil and sugar, bread dough does not.

Pizza dough is typically bulk fermented cold for 2-12 days, bread dough is usually bulk fermented at room temperature for 1-4 hrs. Rye breads are a bit different and the fermentation is staged over about 36hr, at room temp.

>Margin on ingredients specifically was mentioned.

Ingredients were mentioned as classifications for product types.

>You can fit many loaves of bread in the oven space of one pizza.

Not really. Maybe 2-3 decent sized loaves in the footprint of one large pizza, but you can also bake pizzas in much less vertical space, so you can have double the baking surface footprint for pizzas in the same oven volume.

In reality, dedicated pizza ovens are tall enough fit most styles of bread. The necessities of air circulation means you can't shrink the vertical space as much as you might like to.

Anyway, it seems to me the important metric in this regard would be how many items per unit time a baker can effectively manage. Pizza requires some amount of attention more or less constantly. I doubt one baker can manage more than 5 at time, even if the oven could fit many more. Meanwhile that same baker can set a timer on an oven containing many dozens of bread loaves and forget about them until they're done.

You'll burn the top of the loaf if you try to bake a typical artisan batard or boule in a commercial pizza deck oven, due to radiative heat from the top of the oven. You could probably get away with focaccia or similar short flat-top breads.

Items per unit baker time doesn't really matter. 5 pizzas takes say 15-20 minutes of baker+oven time and gives you (using your numbers from up thread) $76 revenue (net ingredient costs). 3 dozen loaves takes a similar amount of baker time, 3x as much oven time (and probably at least double the required oven volume), gives you similar revenue, and is much harder to sell.

A sandwich loaf baked in a pan should be made in a different style of oven, but the types of bread you're talking about are ideally made in the same style of deck oven as pizzas.

To achieve that speed of pizza turnout would be quite the feat I think. Is this factoring in assembling pizzas? Checking/rotating pizzas partway through baking? The oven would have to be running much hotter than for the bread (admittedly no idea of the costs here). You'd probably have to use 5 separate decks to avoid slowing the bake when loading/unloading, 5 decks that could be packed with loaves rather than a single pizza.

Meanwhile, I don't see why it should take more than 10 minutes to load an oven with 3 dozen loaves. During the bake time, the baker can be mixing or shaping another batch or any other task. The pizza maker realistically can't be doing anything but assembling/baking pizzas.

Separate from baking, pizza necessitates the added labour of grating cheese and making sauce, or paying a premium for prepared versions.

No argument that 36 loaves is a harder sell than 5 pizzas. That's sales volume though, not margin.

Margin is zero if you can't sell it.

Could a bread oven pack more efficiently than a pizza oven? It seems easier to put a bunch of rectangular prisms in a space compared to largeish disks

If you're baking rectangular prisms you're competing with $2 grocery store bread. To have a chance as an independent baker you need to go after the more expensive "artisan" type breads which are typically oblong or round (boules) and not baked in a pan.

There's plenty of "artisan" sandwich loaf, baked-in-a-pan bread out there.