Fine-tune in-store bakery production

Question: I agree with the notion that no in-store bakery can be all things to all customers if it wants to remain in business. An in-store operator must limit products to a manageable number of SKUs and then choose the appropriate production method (scratch/mix, frozen raw and par-bake, and thaw-and-sell) for each product. We’re still struggling with this situation. Does any operator have recent experience dealing with this?

Answer: The value of operating a quality-driven hot bakery cannot be overstated. When an in-store bills itself as offering fresh-from-the-oven bakery foods, customers expect it to deliver on its promise.

That promise includes offering products with the highest possible quality at fair prices. When a bakery delivers on that promise, sales and, most importantly, profits are bound to follow. Failure to deliver on that promise means the in-store will not develop a base of loyal, repeat customers who are critical to success.

Yet, hardly an in-store operator today has the capacity to prepare all products. This is especially true for low-volume items and products that require intensive labor. In recent years, many bakery ingredient manufacturers, recognizing operators’ need for such bakery foods, have introduced high-quality, thaw-and-sell products that enable in-store operators to complete their bakeries’ product lines.

Adapts production methods to three store formats

The bakery programs in United Supermarkets Ltd.’s three store formats offer excellent examples of how a company has adapted production methods to meet challenges, among them changing demographics and limited production space and equipment. United operates 50 stores and 39 in-store bakeries in West and North Texas. Twenty-six bakeries are in United Supermarkets, 10 in upscale Market Street supermarkets and three in Hispanic-directed Amigo supermarkets; 11 locations are cold-spots.

The greatest change in production methods has been in Market Street bakeries, which attract upper-middle-income and higher clientele. The in-stores have added thaw-and-sell individual pastry and dessert items. These are in addition to whole cakes, tortes and other desserts, which bakers prepare from mixes and scratch ingredients. Bakeries sell the single-serve items from refrigerated service cases and merchandise two-packs in upright, refrigerated self-service cases.

"We chose not to prepare the single-serve items in store because manufacturers are producing great products," says Tammy Kampsula, the company’s business director-bakery. "This allows us to put our talents and skills into producing other products, such as our scratch artisan breads, brownies and cookies, which have high priority in Market Street."

Production method as a percentage of sales
	United Supermarkets	Market Street	Amigo
Scratch-mix	40%	65%	70%
Frozen raw	50	20	25
Frozen par-bake	5	5	0
Thaw-and-sell	5	10	5

Sales of decorated cakes and cupcakes, made from mixes, are strong in all three formats. Yet, one cupcake SKU within the Market Street product mix—a standard-size filled, decorated cupcake—is a thaw-and-sell product. “Filling cupcakes would be labor-intensive, using labor we could apply elsewhere. We have to be selective in what we produce,” she says.

Market Street bakers produce cookies, including 100% butter cookies, from scratch, except a frozen dough gourmet line that includes chocolate chunk, white chocolate macadamia nut and white chocolate cherry. “These gourmet cookies contain ingredients that our bakeries normally would not stock, and the cookies’ quality is great,” Kampsula says. “We can focus scratch production on higher-volume ingredients and save storage space, too. So, why change what works?”

Production in Amigo bakeries, which are tailored to Hispanic customers, is all about fresh, scratch tortillas. All Mexican breads and pastries are produced from frozen dough. A few non-Hispanic products, including mini muffins, cheesecakes and dessert cakes, are thaw-and-sell items. “These are becoming more popular, but their volume doesn’t justify in-store production,” she explains.

Breakfast sales growing

United Supermarkets are conventional supermarket formats; the in-stores also employ a combination of production methods. Frozen, raw products account for one-half of production. Much of that goes into breakfast products, especially fresh-baked cinnamon rolls, puff pastries and croissants. Kampsula says business has been “growing steadily in recent years. Families apparently are eating at home more frequently and, in some cases, people are shopping our bakeries instead of upscale coffee houses or bakery-cafés.”

Meanwhile, donut sales have remained flat, largely because much of Texas is not a big donut market. For many years, United Supermarkets in-stores have offered thaw-and-sell yeast-raised and cake donuts; about 18 months ago, the bakeries switched to larger, richer donuts, which, she notes, are selling well. “Donuts are important here, but we’re not building our business on them. If we wanted to be known for donuts, we would be frying them,” Kampsula says. “We offer a good-quality product, but we don’t put our energy into it.

“We don’t even want to make some products, such as mini muffins. They’re labor-intensive, require more ingredients, equipment and space, and take the focus off of the team. With manufacturers doing a great job with mini muffins, why reinvent them?”

Investments in remodeled bakeries

During the last few years, the company has become more focused on its three store banners and “doing what’s right for each one,” she continues. For example, this fall it remodeled 15 older United Supermarkets stores and bakeries. Bakery remodeling, which varied according to need, included installing upgraded service display cases and self-service tables and positioning cake decorating stations in customer view.

“The upgrades are not up to the level of Market Street, but they offer a better shopping experience, largely by emphasizing the fresh departments, including bakery,” Kampsula says.

Top management’s investments in the bakeries and tailored production methods are but two examples of how United Supermarkets Ltd. strives to deliver on its promise to offer the highest product quality possible to bakery customers.

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