As Americans continue their love affair with all things local and seasonal, farmers’ markets are springing up all over the country. Recent data from the United States Department of Agriculture found that farmers’ markets have grown 17 percent during the past year–more than 1,000 new markets opened in August 2011 alone.
Some retail bakeries and those new to the baking industry are setting up shop at farmers’ markets as an inexpensive way to build their brand, though the venture doesn’t fit every business model. An informal survey of Modern Baking online readers in September found sentiment split down the middle, with slightly more than half (51 percent) reporting that they sell product at farmers’ markets.
A leg up on retail
Because of the relatively low barrier to entry and overhead costs associated with farmers’ markets, some bakers use them as a low-cost way to launch their retail business. Shannon Loucks, owner of Copper Cupcakes, plans to open her storefront bakery in the spring of 2012 in Louisville, Ky. To establish her brand, she started selling her cupcakes, cookies, whoopie pies and breakfast breads at the Jeffersontown farmers’ market this spring.
“We did it because we knew we wouldn’t have capital for a storefront yet but wanted to get a name out there,” Loucks says. “We opened at a small market in a neighborhood where we thought our target demographic would be. You’re paying $125 to $150 for a booth to get your product out there for that entire season, so you can’t beat it.”
For Solveig Tofte, co-owner and operator with her husband Martin Ouimet of Sun Street Breads, Minneapolis, the market provided an unexpected vehicle for launching her own bakery café after 10 years with Minneapolis’ Turtle Bread.
“The farmers’ market is near and dear to our hearts since we got our start at our neighborhood market in late 2009,” Tofte says, adding that it was never in her plans to open a business–rather, she was seeking a change in her daily routine. “I asked a couple members of the farmers’ market board if they wanted some breads and pastries, and they said yes. Then I asked my boss at Turtle Bread if I could use the shop for my own little offshoot kind of bakery and bread lab, and he said yes. So my husband, daughter and I worked the market every weekend for the last month of 2009 and all of 2010. I saved every penny from those markets and that helped us open our own shop this past March.”
Sun Street Breads currently sells product at two local markets, including beer bread, baguettes, sourdough, figgy rye and buckwheat walnut bread, scones, savory biscuits, cinnamon rolls and cookies. During the season, which runs from April through October, the market contributes roughly 10 to 15 percent gross to the bakery’s overall revenue. Tofte attributes Sun Street’s success to the fleeting nature of the farmers’ market in her upper Midwest location.
“For those of us who live in Midwest, since the growing season is so short, when bounty is here, you jump on it,” she says. “There’s this intensity and sense of urgency in the Midwest markets that others in California might not have.”
Raising the bar
For Jory Downer, owner of Bennison’s Bakery, Evanston, Ill., participating in farmers’ markets the past 11 years has not only benefited his bakery financially–contributing about 11 percent to his overall business–it also elevated his product offering.
“Being associated with the farmers’ markets has raised the perception of our bakery so much, and the quality of our product has definitely gone up,” Downer says. “The markets we do are run by food people who are conscientious of locality and premium products.”
He first sought entry about 15 years ago into the Evanston farmers’ market–the oldest in the state–to generate a little extra revenue. However, city bylaws wouldn’t allow baked products to be sold at the market on Saturdays because they conflicted with a weekly bake sale that raised money for local nonprofit organizations. After some back and forth with the city council, Bennison’s got a stall at the market offering only artisan bread–Downer’s specialty.
Today, Bennison’s is renowned for handcrafted bread–it makes up 80 percent of the product sold by Bennison’s at the Evanston market, as is the case at the Glenwood, Ill., farmers’ market and Chicago’s Green City and Andersonville markets. Varieties include baguette, epi, ciabatta, flax seed rye, 7-grain batard, California loaf, semolina sesame and cracked wheat batch bread. The quality of Bennison’s breads also is helped by the fact that Green City Market only allows vendors to sell products made from locally procured ingredients.
“We have to submit all ingredient lists before the market starts. We can’t use anything that’s not local,” Downer says. “We only buy organic grain flours, seeds, oats and durums; we don’t buy conventionally milled rye or whole wheat. The other markets’ specifications are looser, but we usually make the same line of goods for all the markets.”
It seems that few bakeries differentiate their market product line from that of retail. Of the respondents to the Modern Baking online survey who sell product at the farmers’ market, 76 percent said they offer the same product sold at the bakery.
Michael Gassen, owner of Noe Valley Bakery, San Francisco, who sold bakery items at the Ferry Plaza farmers’ market for 18 years, says offering the same product at the market and the shop encouraged consistency.
“I treated the market both as a retail outlet and as a wholesale customer,” Gassen says. “When we baked product for the market, it was for the store–there was never differentiation between the two. I felt it kept my staff more honest, since it’s all coming from the same place. It really helped us have a consistent product in both places.”
Tofte says product sold at the market is heavily affected by the Midwest weather, which can sometimes be the case in her retail shop as well. “We have a lot of seasonal-dependent items. At the beginning of the year, we have these little crumble pies and biscuits and gravy that sell like crazy when it’s cool,” she says. “Then it gets too hot and people don’t want them. It’s the same case in the shop. You just have to keep an eye on what’s selling.”
Loucks has similarly built her inventory through trial and error, having watched the icing slide off many a cupcake on sweltering summer days. “We sell cupcakes and cookies, and we started doing breakfast breads. We thought our best sellers were going to be cupcakes, but some people found them hard to eat, so we started selling breakfast breads by the loaf. Those really fly. On a typical busy Saturday, we sell over five dozen quick breads and eight dozen cookies.”
The Modern Baking survey found that 73 percent of operators sell cookies. Pastries came in second at 57 percent. Bread and cupcakes were tied for third at 46 percent.
Priced to sell
Bakery operators in general are hesitant to raise prices on product at the farmers’ market, despite that most consumers are less price-conscious when they’re at the market. Gassen’s reasoning for keeping prices consistent was twofold.
“From a peace of mind standpoint, everything has to be the same,” he says. “Also, the people who shopped at the market almost always shopped at my store. As a consumer and a foodie myself, I never took advantage of my customers. You shouldn’t have to gouge me to run your business model.”
Since she doesn’t have a retail shop, Loucks priced her product by examining her competition and total costs. “We figured out our cost and what we wanted our margin to be on each item,” she says. “Then we came up with a value. If a customer is looking at this, what will they think is too much? If the competition was selling zucchini bread for $5 per loaf and we put it at $8, no one would buy it. We priced ourselves around what people around us were doing.”
Aside from competitive pricing and monitoring product, Phil Merrick, former owner of Merrick’s Bread & Coffee in Westport, N.Y., found a simple yet creative way to increase his weekly market sales from $900 to $1,600. “The last year I was at the farmers’ market, I put my sales people on a 5 percent commission,” he says. “I doubled sales. I don’t know if it was the incentive or the fact that they were good sales people, but something about it changed their view. It made them understand it was their responsibility to request what they needed.”
Not for everyone
Merrick’s latest venture, August First Bakery Café, Burlington, Vt., doesn’t have a stall at the farmers’ market, as it is restricted from the market by city ordinance. August First has expanded through other means, offering its bread through community supported agriculture (CSA) shares and sending employees out on “bread bikes,” selling loaves around the neighborhood each afternoon. “We thought about doing the market early on,” says Jodi Whalen, August First’s co-owner. “But the bread bike and CSAs serve us really well. So feel like we are doing plenty as is.”
Gassen pulled Noe Valley out of the market after 18 years when he saw sales consistently slumping. In the early years, the bakery would make $3,000 to $3,500 cash each Saturday during peak summer months. As time wore on, Gassen’s involvement in the market dropped as he focused more on the retail shop. And gradually, sales slipped to about $1,200 per week.
“The competition increased, but we had the same costs, same everything–in fact, more cost because all the commodity prices went sky high, while labor costs remained steady,” he says. “We decided our retail business had become king and the market was more of a drain, so we decided to pull out of one of the best farmers’ markets in the country.”
Nonetheless, he admits the market is a great way for startups to build their business and their brand. “If you’re young as a business, the benefit is exposing a lot of people to your product in a short time span.”
Tofte agrees, adding that the market continues to pay dividends for her business.
“From my history and watching friends with bakeries, I am a fan of diversifying your revenue stream,” she says, “because at any point, one part of your business could stop working. The more ways you have to sell your stuff and the more types of thing you have to sell, the better.”