A BAKERY chain battling back from the economic downturn is taking its wares directly to customers.

Family owned Peters Bakery has launched a fleet of vans taking food directly to hungry workers at their offices.

Like many of the region's bakers the Durham City firm, employing around 500 staff and with a portfolio of 60 shops from Northumberland to North Yorkshire, was hit by the economic downturn and is currently battling against rising wheat prices.

It followed what had already been a difficult few years for the firm after a fire destroyed its long-standing production base and head office on the Dragonville Industrial Estate in April 2004, although it reopened a year later after a £9m rebuild.

But while a number of its rivals have gone to the wall in recent years Peters, which was started in December 1966 by Peter Knowles with one shop in Belmont, is confident measures such as the van service can help it beat the challenging conditions.

Since introducing the first purpose built van last year the fleet has grown to four, with another on order.

Sales Director Chris Knowles hoped the firm could have between eight and 10 vans, which can provide both hot and chilled products, by the end of the year, thereby extending the service which presently serves businesses around the Durham and Washington areas.

It comes as the bakery industry comes under increasing pressure from sandwich chains such as Subway, coffee chains such as Costa and Starbucks, as well as supermarkets supplying its core products, not to mention rising wheat costs.

Mr Knowles said: "With the likes of supermarkets opening up they take our customers away so in a way it is like going back to the old method where we are taking the product to the customer rather than them coming to us.

"We ran a trial with the first one from September to Christmas and it has grown from there."

The firm is also running promotions in its stores to regain a stronger foothold in the UK's £300m breakfast market, which has become a key battleground for retailers over the past three years.

To explore new markets it opened Loaf, a bakery and coffee shop at the Arnison Centre in Pity Me, two years ago.

Mr Knowles said: "We have to come up with new ideas all the time. With issues such as wheat prices everything seems to be working against businesses, in terms of increasing costs and not wanting to pass those costs on, so the more sales we can get the better it is."

Although Peters had to ask staff to take a temporary 10 per cent pay-cut in January and February last year that has not been re-implemented and although Mr Knowles said trading conditions were "still tough" the business is looking forward to a brighter future.

He said a good 2011 would mean: "Growing sales and growing customer numbers."

Research firm Key Note cites UK government statistics that show 1,885 bread, fresh pastry and cake manufacturers operating in 2010, compared to 1,910 the previous year, as small to medium-sized enterprises struggled to cope with challenging economic conditions.

In recent years Newcastle-based North-East Bakery, which ran 13 Nichols high street shops and the family-owned Woodhead Bakery, based in Scarborough, but with 30 North-East shops have gone into into administration, while in September last year it emerged that Tees Valley Bakery, in Middlesbrough, a wholesale baker for schools, colleges and retailers, had ceased trading.