 |
| World Class ShopRites pastry case of multiple size desserts. |
 |
| In addition to single-serve desserts, Buehler Food Markets also offers half cakes. |
 |
| Individual desserts make up 50 to 60% of bakery sales at World Class ShopRites Freehold, N.J. location. |
 |
| World Class ShopRites Corporate Pastry Chef Vincent Tursi uses packaging to create a value-added image for individual desserts. |
Bakeries have always sliced up unsold product for quick sale. These days, however, supermarket bakeries have been slicing up and reportioning their fresh offerings to suit their customers' needs. And, they are reaping rewards, including increased profits, sales, store traffic and customer loyalty.
As a result, this lifestyle-driven packaging is among the hottest trends right now, according to retail, in-store and foodservice bakery operators, because they give customers exactly what they want.
While at first glance, a slice might simply look like a slice, it is really about packaging a single dessert for a bit of personal indulgence, two slices packed together for an empty nest couple, or four-packs for families who want a variety of dessert choices.
The difference in approaches is the difference between push and pull. Instead of pushing bakery products for sale, customers are "pulling" or buying exactly what they want. And theyre coming back repeatedly for more.
Slice of lifestyle
The Patisserie at the World Class ShopRite in Freehold, N.J. has been offering slices since the Patisserie opened about four years ago. And now, Corporate Pastry Chef Vincent Tursi estimates that individual servings (slices or 3- and 4-in. products) make up 50 to 60 percent of the bakery's business, which represents 7 to 10 percent of total bakery sales for one of the top volume ShopRites within the Wakefern co-op.
In addition to slicing up cakes (carrot cake, chocolate cake, chocolate with white icing) and offering individual desserts (brownies, napoleons, eclairs, tiramisu squares), the Patisserie also features two-pack and four-pack servings of cannoli and other traditional pastries. Tursi also packages half cakes and half pies as well. The demand has been so strong that he is even shopping for a slicing machine that can package one or two slices.
The dynamic, Tursi believes, is about fulfilling needs. "Being in the stores, I see more people who would like that little bit to spoil themselves. Or want that little piece of cake that lets them have that little temptation instead of buying this huge cake at a higher cost. They don't mind treating themselves. But at the same time, they don't want to go overboard. They get what they want, but not too much of what they want."
Or, as Grace Gottenbusch, president of Servatii Pastry Shop in Cincinnati, sees it, "It's a portion control attempt. Because we dont know where the stop button is on our appetites."
Premium pricing
One facet of the success behind lifestyle-driven portions is premium pricing and fairly elastic price points.
In the bakery departments at Buehler Food Markets, Wooster, Ohio, which feature traditional cakes and bakery items, the stores have a separate smaller servings bakery section in many of its locations. Roland Krueger, bakery merchandiser for Buehlers says he has found that customers are willing to pay more to get exactly what they want.
" The thing that we found with the single serving items is that if you offer whole coffee cakes, a customer might buy one. [But] if you have an attractive price point [for individual portions], people will buy three or four. And the combined price will be more than what they would have paid for the one coffeecake. Only now theyve satisfied all the members of the family with exactly what they want."
In fact, single serve coffeecakes have proven so popular at Buehlers that the bakery has all but eliminated the full size versions. Only three bakeries in the 11-unit chain offer them.
Price flexibility also pays for the fact that individual portions require added labor and packaging costs.
Norm Dinkel, the third generation owner of Dinkels Bakery in Chicago, says he has been offering slices for years. You make more money on slices than you do on the whole thing. We charge about a 20 percent premium. Theres more labor. Theres more work.
For example, at Dinkels a $10 cake gets bumped up to $12, which is then divided by the number of slices, on average six to eight servings, for the selling price.
At Buehler's, Krueger says higher prices have had no negative effect on sales. "We've seen no slacking, as far as customer sales. So there's quite a bit of leeway as far as [pricing] is concerned. You're able to charge a premium, and the customers arent resistant to that."
For example, instead of buying an 8-in. cake for $8 to $10, it is common for customers to spend $11 on four individual slices of that same cake.
Controlling packaging costs
One way to control the packaging costs the individual servings require is not offer the items already packaged. Servatii's, which sells individual sized desserts as well as larger cakes, does not offer a lot of self-service products, but that does not stop it from offering the individual sizes.
"We have a display case with a lot of different miniature items, regular sized desserts, and our 8-in. tortes. Customers decide, and then we package it up," says Gottenbusch.
And ShopRite's Tursi adds, "It's not really the tangible money. We do very well with our slices and that sort of stuff. But I think its more the intangible too. We get the people coming back. And they keep coming back. We get those consistent customers."
Lifestyle-driven packaging is more than portion sizes, Buehler's Krueger says. It is looking past the bakery's needs and paying attention to customers and what they need.
For example, he's seen competitors try to replicate what Buehler's is doing. In addition to trying to push day-old product, he also found them using the same flavor varieties. "They would always have a pineapple or a blueberry pie, your two slowest movers. And of course, they go, "Well, we cant sell these.' They couldn't sell them as a whole pie. Why would they think they could sell them as an individual piece?"
"But if you start putting them out there in apple, cherry, peach, even cream cakes and cream pies, then youll find the selection that wows the customers."
Benefits of smaller desserts
According to Krueger, the benefits of the customer-driven approach include larger average sales per customer, a good profit margin on the products and satisfied customers because you have provided exactly what they want.
Avoiding commitment issuesRoland Krueger, bakery merchandiser for the 11-unit Buehler Food Market chain, Wooster, Ohio, says that giving customers what they want is an approach that is so effective that Buehler's not only uses it for individual desserts, but also for the bakerys artisan breads. Instead of emphasizing the 22- to 26-oz. large loaves, Buehler's came out with 12-oz. loaves. "People want fresh bread and theyre willing to pay for it. But they dont want to have to deal with "What do I have to do with the other half of the loaf?" Krueger says. Buehler's has found that instead of purchasing one big loaf, customers prefer to buy several smaller ones, such as a cracked pepper Parmesan and asiago cheese. "So the more selection you give them, the more likely you are to get a sale." |