Through product development and strategic marketing, many of the Top 50 chains focus on the strengths of their brands to weather the economy.
The economy has not been friendly to restaurants this year. But fast casual chains, which represent many of Modern Baking’s Top 50 foodservice bakery operators, are faring well compared to other segments of the foodservice industry. Consumers are eating out less, looking for bargains and trading down to less expensive eateries.
“These are still difficult times for restaurants, including for fast casuals and bakery cafés as weak consumer spending continues, and we are not expecting any significant near-term help from the economy,” stated Mark Laramie, C.E.O., Spicy Pickle, Denver, in a press release.
The Top 50 foodservice bakery chains, however, stand in a good position to meet the demands of the cash-strapped consumer. The Top 50, ranked by number of units, includes some of the most innovative chains in the United States. The chains offer quality food at reasonable prices in convenient, comfortable settings, and they are using new technology to further market their brands and build customer loyalty.
“We are in a good space. Bakery cafés and the fast casual category are positioned well for the times we are in,” says Jim Greco, C.E.O., Bruegger’s Enterprises, Burlington, Vt. Like many in the Top 50, Bruegger’s maintains its healthy position through new product development, innovative marketing strategies and renewed focus on the dining-in experience.
Bruegger’s is among many former single- product chains that have expanded their food offerings and overhauled dining rooms to the broader bakery café model.
“This year, we began a new round of renovations in our next generation design,” Greco says. The company has built or remodeled 25 restaurants with the latest design, and 10 more locations are currently being renovated. Renovations incorporate an earth tone color palette, partitions to separate the space into more intimate dining areas and the addition of plates and flatware.
“People feel it is a warmer, more inviting atmosphere. And introducing plateware instead of deli wrap makes for better food presentation,” he adds.
La Madeleine de Corps Inc. opened a new prototype in Dallas with a fast casual ordering process. The company replaced its cafeteria-like ordering line with six flat screen menu boards and an ordering and payment point at the entrance. Customers take numbers to their tables where their food is delivered once prepared.
Even Denny’s, Spartanburg, S.C., joined the café bandwagon by opening its first Denny’s Café location, a smaller version of the traditional Denny’s with a more streamlined menu, counter service and a smaller restaurant size. Geared for urban, more densely populated markets, Denny’s Café opened Nov. 3 in Orange, Calif., with another soon to come in Livermore, Calif.
Cinnamon roll chain Cinnabon, Atlanta, announced plans to expand beyond the sweet roll in its product line as well as its store design. “We plan to reinvent the brand over the next three years,” says Kat Cole, C.O.O., Cinnabon. “With our counterservice model, you can’t really create seating, but the goal is to get the feel and emotion of a bakery café so guests will trust trying a sandwich.”
The chain plans to implement a more contemporary look by using dark wood and jewel tones, and it is testing a breakfast program of egg sandwiches made on bread baked in-store with Cinnabon dough. Panini-style sandwiches and espresso-based coffees are also in the works.
New products abound
Continuous new product development sets the Top 50 foodservice bakeries apart from other fast casual restaurants. They focus on fresh-baked products, and they work to develop new menu items that complement their bakery lines.
Last year, Cinnabon tested cupcakes as its first baked product line expansion. Despite the popularity of cupcakes, sales of Cinnabon’s cupcakes were no match for its signature gooey cinnamon rolls served warm.
“When our guests compared the cupcake to our classic roll, there was no competition. The roll won every time,” Cole says.
With the cupcake trial, Cinnabon executives learned to market and roll out a completely new product and to maintain focus on the company’s specialties. Going forward, Cinnabon’s dough remains a key element in its breakfast sandwiches and paninis. And sales of its latest product launch are “far and away exceeding expectations,” Cole says.
Introduced in September, Cinnabon’s new Center of the Roll is a bowl of bite-sized pieces of cinnamon roll dough drizzled with icing and a choice of nut or fruit toppings. A portable product that maintains Cinnabon’s dedication to decadence, the Center of the Roll is proving to be a home run for the company.
Complement bakery foods
Bruegger’s keeps bagels at the heart of any new product development. During the past several years, the company has added salads, sandwiches, coffee and bread baked on site. This year, the company beefed up its beverage offerings by introducing Lemonade Chillers in lemon and strawberry flavors.
“The only thing we didn’t change was our bagel,” Greco says. “It was already a superior product, and there was no way to make that better.” Bruegger’s restaurants continue to boil and bake bagels in every location. “We hold other products up to the standard we have for our bagel in terms of ingredients, authenticity and quality,” he says.
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Au Bon Pain, Dunkin’ Donuts and Panera Bread are among the many Top 50 chains that specialize in limitedtime- offer (LTO) menu items. Au Bon Pain’s LTO chicken artichoke sandwich, introduced late last year, became its second-best selling sandwich.
Dunkin’ Donuts introduced gingerbread muffins, gingerbread cookies and holiday donuts for the holiday season. The holiday donuts include its gingerbread donut, a glazed gingerbread cake donut, and the Sprinkle the Cheer donut, a yeast-raised donut with red icing and holly berry sprinkle mix.
This fall, Panera Bread, Richmond Heights, Mo., introduced the Orchard Harvest chicken salad–pears, dried cherries, gorgonzola cheese and toasted pecans with field greens and romaine lettuce–and the pumpkin spice latte, an espresso with foamed milk and pumpkin spices, topped with whipped cream and caramel sauce. Panera’s Celebration bread line, which features cranberry walnut panettone, triple chocolate cherry bread and chocolate pecan babka, rounds out its holiday bakery offerings.
“We’re always pushing hard to make a better baguette,” says Tom Gumpel, vice president, Panera Bread. “But, with our customers, there’s a certain level of lust we need to achieve. The goal is to develop food and baked goods our customers can lust after.”
Focus on marketing
While product development is ongoing among the Top 50, new products would not have a chance without marketing strategies to support them. Product pairings, in-store merchandising and creative promotions appeal to consumers seeking convenience and value in their food purchases.
Bruegger’s is one of many chains that apply the McDonald’s “Meal Deal” concept to their own operations. The bakery café pairs a soup and sandwich or breakfast sandwich with orange juice, for example, and sells the meal at a reasonable price. “Product pairings seem to resonate with consumers,” Greco says. “Consumers like the cost savings as well as the convenience of ordering this way.”
To promote its bakery line, Panera Bread also offers product pairings to customers. Gumpel freely admits that even for a company with “bread” in its name, customers are coming to the bakery café first for lunch or breakfast entrées. “You can’t just put bread out there and expect it to happen. You have to develop a compelling reason for them to buy it,” Gumpel says.
In addition to offering pairings, Panera cafés bring bakery products out from behind the counter and in front of customers with table-top merchandising displays that offer product samples and signage telling the story of the bread. This holiday season, for example, the company featured panettone with dedicated in-store merchandising.
“We’re not a bakery that just puts bread on a wall and leaves it up to the customer to decide what to do,” Gumpel adds. “We’re trying to bridge that gap between our bread and their lifestyle. We need to show them how they can use these breads in their lifestyle.”
Foodservice bakery chains also get creative in promoting store openings and anniversaries. Einstein Bros. offered coupons for one free breakfast sandwich per week for a year to the first 100 people in line to the grand opening of its new store in McKinney, Texas. Manhattan Bagel offered a similar promotion to celebrate the 15th anniversary of its West Caldwell, N.J., store. “We are so thankful for the years of support that the West Caldwell community has given us, and we can’t think of a better way to show our appreciation to them for being such loyal fans of Manhattan Bagel,” said franchisee Akram Kwaik in a press release.
More than ever before, the Top 50 chains are taking their marketing campaigns to the masses through websites and social media networks. Chains are publicizing promotions, building loyalty programs and gaining valuable customer feedback through Facebook, Twitter and websites that offer restaurant deals like Open Table and Groupon.
Corner Bakery, for example, introduced its new green chili and chicken panini sandwich to its Facebook fans by offering vouchers for a free panini to the first 1,000 Facebook members who signed up. The next 9,000 who registered received an offer of $3 off the panini. Such promotions move consumers to visit restaurants and try new products, all the while building a chain’s web community for future promotions and customer feedback.
“For Cinnabon, social media is a core component of our operating strategy. It is a powerful driver of every initiative,” Cole says. “I would be hard pressed to go stand in a room and ask two million people what they think about Cinnabon. But I can sit at my desk, send out a tweet and add that to Facebook, and I’ve just done the exact same thing.”
Particularly for chains like Cinnabon, with restaurants located throughout the world, this network easily connects fans and allows chains to target their most loyal customers. Promotions and information about the restaurants are delivered in an instant to computers and handheld mobile devices.
Marketing to customers through mobile devices is only in its infancy for foodservice bakery operators. Starbucks recently expanded its Starbucks Card Mobile payment app to New York City Starbucks locations. The app, which allows customers to pay for Starbucks products through their mobile phones, was already available in 16 stores in Seattle, Northern California and at more than 1,000 Starbucks in Target stores.
Among Top 50 foodservice bakery operators, Dunkin’ Donuts offers the Dunkin’ Run app for iPhones. The app is tailored for people, called “runners,” who are charged with regularly picking up donut orders for office colleagues or other groups. Runners initiate a group order on www.DunkinRun.com through their computer, mobile device or iPhone. Alerts are sent to the runner’s list of friends or co-workers, telling them when a trip to Dunkin’ Donuts is planned along with a personal message inviting them to place an order online. Invitees can view the Dunkin’ Donuts menu to place their order, and registered users can select from their own personal list of favorites and/or previous orders.
“We’re all about offering high-quality, easy-to-order products and getting our customers on their way and back into their busy lives as quickly as possible,” Frances Allen, Dunkin’ Donuts brand marketing officer, said in a press release. “Dunkin’ Run extends that same spirit and commitment to the office, the dorm or any group, leveraging fun and exciting online and mobile tools to make it even faster and easier to keep yourself and others running with a great cup of coffee or a breakfast sandwich any time of day.”
Dunkin’ Donuts stands with many among the Top 50 foodservice bakeries that achieve success by staying true to the mission of their brands while exploring new ways to feature tried-and-true products.