An inverted yield curve — when longer-term Treasury debt instruments have a lower yield than short-term ones — means that investors are losing confidence in the economy. It’s considered a hallmark predictor of a forthcoming economic recession.
This chart will show you how reliable (it’s every recession over the past 40 years).
So it’s worthwhile to note that the yield curve inverted for the first time since before the Great Recession in March, and again fell into worrying territory in May after prospects for a trade deal with China fizzled out, among other concerns.
Why Co-Packing Makes Sense in a Recession
When economic indicators like the yield curve point toward slowing growth, companies wisely tend to save excess capital rather than invest it.
For baked goods companies, that means holding off on investing in new facilities, equipment and employees — even if that means potentially churning customers to competitors or forgoing opportunities for expansion. The risk of investment is just too great.
Co-packing, or contract manufacturing, allows companies to seize opportunities for growth even during or prior to periods of economic stagnation or downturn by outsourcing some or all of their production to a co-packing partner, like Baker’s Pride.
It gives brands the flexibility to respond to changing circumstances and even expand production without investing in new equipment or employees.
Does co-packing make sense for your company? Check out our blogs in the links below to see how we’ve helped customers like you solve their business challenges.
Delicious Baked Goods on Demand
Baker’s Pride is a trusted co-packing and private labeling partner to midsize and multinational baked goods companies across the country.
We rigorously maintain product quality and consistency while expanding our customers’ production capacity and distribution, reducing their freight costs and simplifying their logistics.
For more information, check out our products or visit our homepage today!