This bakery café chain first draws customers with fresh-baked pies, then keeps them with lunch items.
Mike Busley is counting on top-quality pie to build his bakery café operation, and the good news is Busley appears to be well on his way.
In 1996, Busley and his wife, Denise, opened Grand Traverse Pie Co., a gourmet pie shop in Traverse City, Mich. The Busleys, both Michigan natives, figured Traverse City would be a good location. The city, which bills itself as the Cherry Capital of the World, is home to the National Cherry Festival; each year it attracts more than 500,000 visitors. The marketing and sales potential of pie, cherries and hundreds of thousands of publicists was alluring.
Aligning with the festival and participating in local civic and charitable events, the Busleys transformed the shop into a bakery café and built the Grand Traverse Pie brand, recognized by area residents and seasonal tourists. Pie sales rose steadily, currently reaching as many as 500 a day sold during the summer and dropping to 100 daily in early November, the store's slowest sales period.
Within eight years of opening, Grand Traverse Pie grew to a point where the Busleys took on two partners and formed GTPie Franchising LLC. In 2005, the first Grand Traverse Pie franchise opened.
Since then, the business has been on a fast track, having grown to 13 franchised stores and three company-owned locations in Michigan and Indiana. Another franchise is scheduled to open in April in suburban Indianapolis
Initially, the Busleys thought they would operate a mom-and-pop business with one or two stores. “Yet, we wanted to build a business that would become engaged in the community,” Mike Busley says. “We could do this by hiring more people. Or, we could pursue franchising.”
He mined books for franchising information and attended franchising seminars. He hired a consultant in 2003 to conduct a franchise feasibility study. The results were positive, and Busley hired an attorney to help form the structure. He partnered with Tim Rice, who has more than 20 years' experience in restaurant franchising and retail food marketing and shares Busley's belief that Grand Traverse Pie franchises should become active members of their communities.
“We wanted to be the anti-franchise franchise,” he says.
Signature cherry pies
With pie as their focus, Grand Traverse Pie shops list 31 varieties of fruit pie and seven cream pie flavors in 9-in. deep-dish and 6-in. mini sizes as well as slices. Franchisees are required to display at least 15 varieties.
True to its mission to tap the popularity of Michigan cherries, the Busleys created signature cherry pies made with tart Montmorency cherries, grown in neighboring counties. Varieties include traditional double-crusted Old Mission Cherry; Long Lake Berry Cherry, which includes raspberries; Cherry Peach Crumb and Grand Traverse Cherry Crumb, the top-seller of all varieties.
To achieve its bakery café concept, Grand Traverse Pie relies on a unique selling proposition to offer high-quality, on premise-made pies, supported by a wide variety of freshly made bakery and non-bakery food products provided in a comfortable environment.
Though pies identify Grand Traverse Pie, customers begin to understand “that we're more than pies after they walk into our stores,” Busley says. Expanding the product line began with products that complement or derive directly from pie components, such as the crust in pot pies and quiches. Chicken pot pie has become the single largest-selling product in terms of units sold.
The company rounded out its bakery product list and foodservice menu to fill all day parts. Morning fare includes bakery foods (muffins, croissants, cinnamon rolls, bagels, turnovers), quiche and breakfast sandwiches; lunch items include gourmet sandwiches and wraps, pot pies (chicken, prime rib) soups and salads; additional sweets include cheesecakes, carrot cake, brownies, chocolate cake, dessert bars and cookies (chocolate chunk with pecans, cherry oatmeal, peanut butter, white chocolate with dried cherries and macadamia nuts).
Stores serve brewed coffee and espresso-based beverages in ceramic cups emblazoned with three images in a row: a heart, a peace sign and a pie for “I'd love a piece of pie.” (The peace sign is not meant as a political statement, Busley says, but rather a fun play on words.) Food is presented on ceramic plates with stainless steel dinner ware. “We didn't want our guests to eat from paper plates with plastic utensils and drink hot beverages from paper cups,” he explains.
The Traverse City store sells more pies, as compared with other locations, because the store is a tourist destination where customers come for lunch or purchase whole pies to go or to ship. Newer stores are gathering spots for lunch and slices of pie with meals or a beverage.
All stores can pursue catering. “We encourage catering among our franchisees because it drives our brand and builds retail sales,” Busley says. “We still struggle somewhat with the perception that Grand Traverse Pie is only about pie. Catering helps to dispel this. We place coupons in the boxes to encourage consumers to come.”
The company plans to move central pie dough production this spring into a larger, 4,000-sq.-ft. facility. Currently, a production facility near Traverse City supplies raw panned pie dough to all stores. “This is the one thing that the stores don't make,” Busley says. “Our first four stores made their own dough. That allowed for product inconsistency.”
The new facility's close location will enable the company to conduct product research and development more effectively, Busley explains. The company plans to examine trans fat-free and gluten-free options and different product sizes.
Store crews prepare all other bakery foods, using a combination of scratch, base, mix and frozen production methods. For example, they blend custom dry mixes for each variety of fruit pie filling. “This procedure works, but as we grow, I'm sure that we will bring mix production to the central facility,” he says. “That will be another step to ensure consistency.”
Bakers fill and top each pie individually. Newer stores are equipped with an 8-pan rotating rack oven and two 5-pan convection ovens; multiple ovens are necessary because several short runs of different products require different baking temperatures.
The ovens, as well as sandwich assembly areas, are visible to customers, and a sampling station is located in front of the ovens. “We're broadcasting that we make our pies in the stores, and we do it all day,” says Tim Rice, vice president and director of operations. “Something is constantly coming from the oven.”
Production is staggered throughout the day to capture the theater, Rice adds. “This gives bakers the opportunity to interact with customers, such as sampling product. It is a strength that separates us from other bakery café operators. Doing this also enriches the bakers' work because previously they went unrecognized. Customers often know them by name. One of our goals is to know our customers.”
The partners are adamant about ensuring that the quality of dough and fruit set the Grand Traverse pies apart from other bakeries' products.
The company uses Michigan-grown fruit whenever possible. Its blueberries, tart Northern Spy apples, tart Montmorency cherries and seasonal strawberries and peaches are grown and processed in nearby counties. Out-of-state processors supply most raspberries, rhubarb and blackberries.
“Northern Spy apples are firmer and tarter, compared with Granny Smith apples,” Busley says. “These apples yield pies with good texture and the right balance of sweet and sour.”
Maintaining top quality in the wake of increased ingredients costs has presented additional challenges for the company. In addition to costs of basic ingredients climbing during the last two years, prices of several types of fruit rose.
Meanwhile, each store's cost goal is to maintain 29 percent overall food cost and 25 percent labor cost, including the general manager's salary, according to Rice. As a result, the stores had to raise product prices, he says. For example, a 48-oz. blueberry pie went from $11.99 to $16.99, mainly because blueberry prices rose dramatically. However, the blueberry pie price has since dropped to $13.99, due to the increased availability of blueberries.
Customers have understood the increases because “we have a good relationship with them,” Busley says. “They know the extra costs are real, that we're not raising prices to buy a yacht. If we communicate with our guests, they understand.
“In fact, sales continued to climb. Margins slipped a little, but we've always had good margins on our pies. We create products that are labor-intensive-made one by one-and are worth considerably more than the sum of their parts.”
After raising prices, the company did not cut back on quality or quantity, Busley says. For example, the stores stopped making blueberry pies for several weeks because the company could not obtain Michigan blueberries.
The company's foodservice margins are tighter, compared with those of bakery foods. “So, we raised the culinary bar to improve the price/value proposition,” he explains. For sandwiches, the stores introduced fresh-baked focaccia and baguettes, relying less on sourdough, whole wheat or rye, and added new sauces and spreads.
“The bread, sauces, spreads and herbs upgrade the texture and flavor of the sandwiches to the point where 4 ozs. of meat may not be necessary, and 3 ozs. will satisfy customers,” Busley says. “Creating a great dining experience at the same cost enables us to charge a bit more.”
Prepared for economic downturn
During Modern Baking's visit with Grand Traverse Pie in November, Busley noted that the stores already had felt the impact of the slowing economy, especially locations in the Detroit metropolitan area. Gauging the effects fully is difficult, however; most stores are too new to compare year-to-year sales performance.
Still, he and Rice remain optimistic. Fast-casual dining sales grew 13 percent a year leading into 2008, compared with a combined 5 percent growth by the quick-serve, fast-casual and casual dining sectors, Busley notes.
“The bakery café subset of fast-casual dining, fueled largely by Panera Bread, has attracted customers from the quick-serve sector who are trading up,” he says. “Other customers come from casual dining who are looking more closely at their spending and are seeking good, quality food at more acceptable values.
“Our ring is a bit more than that of quick-serve but is less than casual dining. Importantly, we have a concept that will best weather the situation because we offer freshness, high quality and good taste in a warm environment.”
Grand Traverse Pie has experienced fast-paced store expansion during the last year and a half. Plans call for opening no more than one or two stores this year, given the current credit crunch. “We need to pause and spend the next six months continuing to build our relationships with our franchisees,” Busley says. “We want to promote the Grand Traverse Pie culture, drive best practices and ensure that everyone and everything are in sync.”
He and his team also will establish the proper balance of franchised and company-owned stores for the future stores. In addition, those results will help to set a strategy for store growth into major markets, he says.
Sounds like the best of both worlds in today's slow economy: pursuing a foodservice concept that remains viable, while having an opportunity to plan and become prepared to grow when conditions improve.
And to think a piece of pie started everything.
Grand Traverse Pie Company at a glance
Headquarters: Traverse City, Mich.
Management: Michael Busley, president; Timothy Rice, vice president-operations and development; James Staron, director of operations
Number of bakery cafés: company owned, 3; franchises, 13
Market served: Michigan and Indiana
Product line: Nearly 40 varieties of fruit and cream pies; gourmet sandwiches, soups, salads, pot pies and quiche; muffins, croissants, cinnamon rolls, turnovers, bagels, cookies, cheesecakes, dessert cakes and bars
Average annual sales per store: $1.2 million
Primary competition: Panera Bread, Atlanta Bread, Cosí, Potbelly
Store sizes: 3,100 to 4,800 sq. ft.
Seating: 75 to 130
Average number of employees per store: 20
Production methods: scratch-pies, cheesecakes, turnovers, bars, cinnamon rolls, cookies; bases-muffins, quick breads; mixes-cake, brownies; frozen raw-bagels, croissants; par-baked-breads
Major baking equipment: 20- and 40-qt. vertical mixers, steam-jacketed kettle, 8-pan rack oven, two 5-pan convection ovens, steam holding cabinets, pan washer
Plans: open 17th location this month in Indianapolis; move central production into larger facility; during the next several months study operations to determine future mix of company-owned and franchised stores for growth
Bakery supply distributors: Lipari Foods, Gordon Food Service
Benefits of community involvement
Grand Traverse Pie Co., Traverse City, Mich., participates in several local civic and charitable events “because it's the right thing to do,” says Mike Busley, co-founder and president. “It's part of our mission to be engaged in our community.
“The goal is to build the community's respect and trust, not to get more people through the door. But, done successfully, more people will come through the door, and will return.”
One of the best examples is the company's involvement with the National Cherry Festival held each July in Traverse City. The eight-day event, conducted on the shores of West Grand Traverse Bay off of Lake Michigan, pulls more than a half million visitors.
Since Grand Traverse Pie opened in 1996, the company has had a minor presence at the festival. For 2008, Busley had more ambitious plans.
“Why not build an exhibit with ovens and have children make and bake their own cherry pies,” he reasoned. “And, locate it right inside the entrance to the festival grounds? What could be more appropriate than fresh-baked cherry pie at a cherry festival?”
Busley negotiated to purchase the prime location and then designed and constructed a modular exhibit, which could be used each year. Festooned with colorful Grand Traverse Pie identification, the 12-ft. by 16-ft. structure features work surfaces, refrigeration and convection ovens.
More than 500 children, wearing Grand Traverse Pie aprons, prepared and baked 6-in. cherry pies to take away. The company provided the equipment and basic ingredients, and the cherry industry donated the cherries.
“This effort really solidified our relationship with the festival, which is the largest event in our community,” Busley says. “We have tapped this experience into marketing our products year round.”
Grand Traverse Pie a sampling of prices
|Grand Traverse Cherry Crumb, 9 ins.||$12.99|
|Peninsula Apple Crumb, 6 ins||$6.99|
|West Bay Blueberry Crumb slice||$2.99|
|Chocolate cream, 9 ins.||$14.99|
|Key lime, slice||$3.29|
|Blueberry muffin, 4 ozs.||$1.29|
|Cream cheese-iced cinnamon roll, 6 ozs.||$2.49|
|Apple pecan dumpling, 4 ozs.||$2.99|
|Chicken pot pie with scratch-made crust||$6.39|
|Chocolate chip cookie, 3 ozs.||$1.59|
|Chocolate-iced brownie, 4 ozs.||$2.59|
|Pumpkin bar, 4 ozs.||$2.25|
|Turtle cheesecake, 54 ozs.||$25.99|
|Banana nut bread, 24 ozs.||$6.49|