by Heather Brown, executive editor
CAKES MEAN BIG BUSINESS for most supermarket bakeries. Custom-decorated, all-occasion, wedding and upscale dessert cakes generate nearly a third of in-store bakery sales and more than $5 billion annually, according to Modern Baking's 2004 Supermarket Bakery Research. Because cakes are such an essential part of in-store bakery success, maintaining and even growing the category can be daunting.
What worked in the past, such as "Cake-O-Ramas" and merchandising in mass, may not always be the answer. The key is finding your in-store's cake niche, promoting it well and keeping up the customer service that brought you the business in the first place.
Promote beyond weekly flyer
Big Y Foods, Springfield, Mass., had long offered photo cakes for its customers, but the supermarket chain saw more potential in its program. The company invested in new photo cake equipment with improved capabilities, such as photo cropping, enlarging and high-resolution printing. Once the systems were in place in its 50 stores, Big Y supported the program with an extensive marketing campaign, including full-color brochures.
The brochures were distributed to each store and displayed in departments beyond the bakery. Promotional buttons worn by bakery employees and in-store signage touted the photo cakes. And, the company developed an extensive television and radio advertising campaign.
The promotion tripled and even quadrupled photo cake sales in some stores, according to Steve Bordonaro, Big Y's bakery director. By providing customers more detail about what Big Y can do with photo cakes, the bakery boosted sales.
Differentiate from the competition
Photo cakes are not new to instores. Eighty five percent of in-store bakeries offer them, according to Modern Baking research. But, Big Y's marketing blitz encouraged customers in its area to think of Big Y first for photo cakes. Focusing on the in-stores' specialty pumped up the entire cake category.
You may know what your cake specialty is, but do your customers? Henning's Market in Harleysville, Pa., differentiates its cakes by using a unique sour cream cake variety available in four flavors: chocolate chip, raspberry swirl, marble and lemon.
"Our cake is different," says Sandy Rosenberg, bakery-deli director for Henning's. "It's not like a box cake. Once you try it, you're hooked."
While Henning's produces its cakes using a proprietary scratch formula, quality mixes, frozen layers and even finished cakes are more readily available for supermarket chains to round out their cake lines and maintain consistency throughout the chain. The instore industry's use of thaw-and-sell cakes has nearly doubled since 2002.
In-stores are relying more on thaw-and-sell because of their labor saving advantages. But, they are also using these cakes to offer a broader array of flavors and sizes. When executed well, quality thaw-and-sell cakes can provide customers with more upscale varieties, odd shapes and sizes or meet special dietary needs, which can be too labor-intensive to produce in-store.
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| Custom decorated | 11.4% | $2,154 million |
| All-occasion cakes | 10.6% | $1,895 million |
| Upscale dessert cakes | 4.6% | $869 million |
| Wedding cakes | 1.5% | $284 million |
| Total | 28.1% | $5,202 million |
| (Source: Modern Baking Supermarket Bakery Research, 2004) | ||
Make cakes fun
Once your cake line is established and your special niche is determined, merchandising and sales strategies can push cake sales above the norm. To initiate interest in its cakes, Hannaford Bros., Scarborough, Maine, gets creative with its cake names. Few customers can resist Hannaford's Chocolate Binge or Peanut Butter Rave cakes. Balducci's Food Lovers Market, Bethesda, Md., offers a Chocolate Mousse Delight, and positions "new & exciting" labels with detailed descriptions next to each new cake.
Marketplace Foods, Minot, N.D., creates themed events in its cake department around national movie debuts and local events, such as its Scandinavian food festival. Bakery employees dress up in costumes based on characters from movies and promote decorated cakes featuring those characters. Customers are given advance notice of the event, so they can treat children to a special trip (and sure-fire sale) to Marketplace Foods cake department.
Marketplace Foods; Strack and VanTil, Highland, Ind.; and Haggen Food, Bellingham, Wash. are among the many supermarket chains bringing cake decorators to the front of their bakeries. If you have the talent and the space to support decorating cakes in customer view, the bakery action is a natural draw to the department.
Refine basic customer service
Moving cake decorators to the forefront educates consumers about the process and encourages communication between the customer and cake decorator. Key to custom-decorated cake sales, in particular, is the customers' ability to customize their orders with ease and accuracy.
To improve the cake ordering process in its bakery, Henning's Market is developing a centralized ordering station in its supermarket where customers go for custom bakery, deli and foodservice orders. One person will handle the orders in the designated location for those departments.
Quality wins
Above all, quality cakes win. The cake category in particular has been hard hit by mass merchandisers' lowball prices. A decorated half sheet cake sells for $15 at Sam's Club and Costco, and a full sheet retails for $25. Fortunately for most supermarket in-stores, cake variety is limited at most discount or club stores.
The opportunity to develop a cake line like no other in your market is immense. Independent retail bakers dropped price wars long ago, and are coming out the winners in terms of the profit margins they achieve with their cakes. The challenge for in-store operators is to maintain a quality cake program and follow through with marketing, merchandising and sales strategies that make customers aware of your quality difference.
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| Year | Percentage of operators | |
| Mix | 2004 | 46% |
| 2002 | 47% | |
| Thaw & Sell | 2004 | 41% |
| 2002 | 22% | |
| Frozen batter | 2004 | 16% |
| 2002 | 31% | |
| (Source: Modern Baking Supermarket Bakery Research, 2004) | ||