Bakery Cafés find a sweet spot
Consumers are spending less and trading down, but are still motivated by health and convenience. The bakery café segment is well positioned to meet those demands.
Catering also provides a unique marketing opportunity. The physical elements that come with a catering package-boxes, wrappers, plates, stickers-all provide a chance to get a logo and a brand in front of potentially new customers.
“The economy had our foot traffic down, but catering sales are completely independent of foot traffic,” he says. “It increases transactions without having to add anything to the four walls a bakery café already has.”
Breakfast, lunch and the commuter
Bruegger's had traditionally done well with the morning commuters, thanks to a strong coffee program and classic bagel breakfast options. The company worked to gain a significant foothold in the lunch daypart by marketing its bagel sandwiches, but realized bagels' limitation as a lunch vehicle.
The SoNo Bakery and Cafe, South Norwalk, Conn., exemplifies the fresh, healthful traits associated with the bakery cafe segment.
“We've always offered sandwiches on bagels and served several other bagel platforms, but for the first time we are introducing bread,” Piper says. The company now offers two varieties of sandwich breads-honey wheat and hearty white. The frozen loaves are thawed, proofed and baked in the rack ovens that Brueggers' cafés already have on site.
Philip Smith, Bruegger's director of new products and services, designed a bread somewhere between artisan and homemade; the bread has the flavor and mouthfeel of sandwich breads, but also has the irregular crumb aand open holes of a homemade loaf.
In order to seize a portion of the lunch market, replete with time-crunched professionals, most bakery cafes are designed to compete with quick service restaurants on the convenience factor. Paul has a lot of experience in marrying quality and convenience. Having established its brands throughout Europe and, more recently Tokyo, Paul has targeted the commuter as a primary customer. Paul has done well in airports, train terminals and other rush areas. Alfa sees eventual possibilities for a similar plan in the U.S. market. Even in its current shopping mall locations, he sees that people are concerned about time.
“People who are used to eating well, maybe at nice sit down restaurants, aren't able to take the long lunches they may have once taken. People are feeling more pressure from their jobs, and having to work harder just to keep their jobs, so lunch is less frequently seen as leisure time,” Alfa say. “We fill that niche. We've found that during lunch, people are making a lot more take out orders, calling ahead, or even both.”
Know your customer
Alfa also has observed differences within his current reach of five shopping mall locations throughout the Miami area. He has found, predictably, that the consumer decisions coincide with the type of mall they are at, so he has trained his staff to maximize profits.
“In the larger, traditional malls, we have seen less foot traffic, but we've maintained and even improved the average ticket. In the outlet malls, foot traffic has been very good, but the per ticket sales have dropped off,” Alfa says. “The people who come into the outlet malls are extremely budget conscious and are unlikely to purchase add-ons or impulse buys.”
Spicy Pickle, in the fast casual niche, combines the convenience of quick service with the comfortable, welcoming atmosphere of sit down restaurants.
This is a common occurrence in bakery cafes: the impulse buys are the first to go in a down economy because fewer people have money to burn. In order to counteract this, Alfa has increased staff training in upselling. He has found that a knowledgeable, helpful person at the point of sale is the most valuable tool to convince people to buy that extra pastry item or juice drink.
“We've also bundled items together to help customers think of value,” Alfa says. “You have to be careful to ensure the bundled items are at a low price point, though. If you go much higher than four dollars, people won't be willing to buy.”
Panera Bread also has taken to bundling, turning to combo deals to drive add-on, bulk and impulse purchases. The company is experimenting with an option called “You pick four,” an expansion of its “You pick two” option. These combo meals allow consumers to select two from an assortment of sandwiches, daily soups and salads, and add a beverage and a baked product for a nominal price increase.
Dinner bell
Another growth area for bakery cafes has been the dinner market. The trading down that is characteristic of a down economy generally occurs on big ticket items: cars, vacations and higher-end restaurants. This can be a boon to bakery cafes, as people who are used to high-end restaurants, but are forced to eat on a budget, are not likely to frequent quick service restaurants. The bakery cafes' established perception as healthful and upscale in comparison to McDonald's or Burger King mean they are likely the benefactors of white tablecloth restaurants' losses. People with higher-end tastes, but without their former buying power, are likely to gravitate toward the bakery café model.
“We have done a lot of work on our diner menu, developing a group of Au Gratin dishes with ham, beef, prosciutto, onions and potatoes; traditional northern French dishes,” Alfa says. “People are looking for a hot meal, more elaborate dishes, hot and grilled.”
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