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| The Kolache Factory offers 28 varieties of kolaches, from the traditional cheese-or fruit-filled to versions with chicken or eggs. |
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| Beard Papa's proprietary process produces a cream puff with two layers of dough, a pie-crust like exterior with choux pastry interior. |
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| Lee's Sandwiches draws crowds with its fresh-baked baguettes. |
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| Paul French bakeries are noted for their black facade and front window filled with bakery products. |
Sandwiches prepared on fresh-baked breads. Donuts served warm with sugary glaze. Even made-to-order cream puffs. Modern Baking's Top 50 largest foodservice bakery chains find niches for fresh-baked products in multi-unit foodservice environments. Bakery cafes, donut chains, restaurants and bagel bakeries are among the categories tracked. Businesses with new twists on these categories also are tempting America's palate.
The bakery café category continues to show strong growth by focussing on consumers' increasing demand for more healthful food options. From the healthful to the indulgent, Dunkin' Donuts and other donut chains are finding high profits outside of donuts, particularly in beverages. And, Krispy Kreme continued to struggle this year with legal troubles and lost focus. While the Krispy Kremes and Panera Breads of the world gain much mainstream media attention, some smaller foodservice bakery chains are making inroads into Modern Baking's Top 50 with fresh concepts.
Bakery cafe chains continue to grow as they develop menus relevant to consumer demands. Panera Bread, Richmond Heights, Mo., grew by more than 100 units in the last year, and plans to add another 155 units by September next year. Atlanta Bread Co., Smyrna, Ga., opened its first location in the Northeastern United States and plans to add 25 more stores in the region. The company also recently rolled out new all-natural, all-organic products to tap into growing consumer demand for more healthful product choices. To address the trans-fat issue, Au Bon Pain, Boston, has reformulated its muffins, cookies and other desserts to eliminate trans-fats.
Donut chains also are weighing in on trans-fats. Dunkin' Donuts, Canton, Mass., has removed trans-fat from its cookies and muffins. Dunkin', which has a stronghold in the Northeastern United States, is planning aggressive expansion in the rest of the country to improve its market share. The company is shifting donut production from each location to central commissaries, called Central Production Locations. The CPL's prepare the donuts and deliver them fully fried twice daily for icing and filling in the individual locations. Each CPL can support 100 units, and plans call for CPL's to support 2,000 locations by 2006.
The beleaguered Krispy Kreme sold Montana Mills to Great Harvest Bread, Dillon, Mont. Krispy Kreme had purchased the bread bakery chain in 2003, and had shut-tered most of the stores by 2004. Great Harvest purchased the remaining eight stores in upstate New York.
As large bakery chains continue their march up or down the Top 50 ranks, some new comers are offering fresh concepts in foodservice baking. Modern Baking reveals how four chains are finding markets for their fresh bakery foods.
Kolache Factory: Eat different
"I THINK THERE ARE MORE KOLACHES sold in Texas than in the rest of the world," says John Banks, president and co-founder of the Houston-based Kolache Factory.
Kolaches, which originated in Eastern Europe, are sweet pastry rolls traditionally filled with a variety of fruit fillings, meat or cheese. Banks has taken the kolache a step further, expanding beyond the typical breakfast fare. The chain now offers 28 varieties, including barbecue beef, pepperoni and mushroom, jalapeno and cheddar cheese and creamed spinach. The Kolache Factory also offers gourmet coffee and traditional pastries, including cinnamon rolls, croissants and muffins.
Even though Texas was in the midst of the oil bust when the Banks opened their first Kolache Factory in 1982, they had big plans. "We started with the idea for multiple stores, and in 1986 we opened the second one," Banks says. The chain currently operates 13 company-owned units and 15 franchised locations. He plans to open 12 more this year, with five in the works in California, Florida and Illinois. Kolache Factory locations already operate in Colorado, Georgia, Indiana, Minnesota, Missouri, Ohio and of course, Texas.
The company opened the first franchise unit in 1997, but franchising took off in 2000. By that time, the company had set up a computerized point of sale system, hired someone as a trainer for franchisees and established a full-time sales position for franchises. "After we sold the first franchise in 1997, we stepped back and real-ized we'd done it too soon. Now we have all the support our franchisees need," Banks says.
Open for breakfast and lunch, the Kolache Factory makes 80 percent of its sales by 10 a.m., Banks says. "We open at 6 a.m., so we have a short window to make a lot of sales. People won't cross the street for breakfast. It took me two locations to figure that out."
To keep the traffic moving (Banks has discovered that customers will wait for two minutes to be waited on, but not three), Kolache Factory employees are cross-trained between the kitchen and sales/customer service. Banks estimates that almost 80 percent of the bakery's sales are take-out. "People like the hand-held aspect of the kolaches," he says.
The company has tried to maintain a consistent look for the interior of Kolache Factory units, and all locations offer the same products, although regional flavors are available. To generate new product ideas, the company hosts the Kolache Olympics at its commissary in Houston. Company employees and franchise owners are divided into five teams, and each team has to produce two items. These variations are then used for the Kolache of the Month promotion to determine the staying power of the new products.
Puffed up sales at Beard Papa's
WHAT WISCONSIN BAKERS have known for years, the rest of America is finally figuring out. Cream puffs can be big business. Bon Appetit magazine even named them one of the hot desserts for 2005. And, Beard Papa's, a Japanese chain with five stores in the United States, is poised to take advantage of the trend.
Muginoho Limited, the parent company of Beard Papa's, was created in 1996 as a holding company for several Japanese restaurant chains. Yuji Hirota, founder of the company, developed a proprietary two-layer choux crust in 1999. He used the crust as the basis for cream puffs, and the Beard Papa's brand was born. The inner crust is a choux pastry shell, and a piecrust forms the outer layer.
In 2004, Beard Papa's opened its first store in the United States on the Upper West Side of Manhattan. Currently, franchisees have opened two more stores in New York City, one in Boston and one in New Jersey. Twenty-five more franchised stores are scheduled to open in the next year, including the new markets of California, Nevada, Hawaii and Texas, says Craig Takiguchi, executive vice president of Muginoho USA.
Takiguchi credits the popularity of Beard Papa's cream puffs to its milder, lighter flavor. "It's a product that people with a sweet tooth can eat everyday," he says.
The frozen choux dough is shipped from Japan for baking off in the stores. "All products are baked on site, and the creams are made on site," Takiguchi adds. The cream takes two hours to prepare and is made four to six times a day. It is made with natural Madagascar vanilla beans that yield a distinctive aroma. The shells are injected with cream in front of customers, and are filled only when customers order a cream puff, Takiguchi says.
Besides the traditional vanilla cream puffs, the company also offers green tea, chocolate, caramel, mocha and strawberry fillings. While cream puffs are the bread and butter of the business, Beard Papa's also offers other products, such as hand-held soufflé cheesecake sticks; Fondant Chocolate, a single serving of chocolate cake with chocolate filling that oozes out when cut; and Mango Ice Showers, shaved ice with an apple mango flavoring.
The Beard Papa concept is still being fine-tuned for the American marketplace, Takiguchi says. "Originally, we thought it best to operate 1,200-sq.-ft. locations with sit-down areas. Now, we are looking at fine-tuning the back end to be able to operate in malls and kiosks. Our goal is to get into key markets, set up a flagship store for preparation of products and then open up satellite stores."
Hot baguettes now
LEE'S SANDWICHES, San Jose, Calif. is using fresh-baked baguettes to catapult this family-run business into a multi-unit sandwich chain. Central to the restaurant's appeal are its Euro-Asian sandwiches served on baguettes and croissants.
The company currently has 20 stores and has plans for 10 more stores in a year, says Chieu Le, Chief Executive Officer, Lee's Sandwiches.
"People love it because we use very good deli meat, and every 30 minutes we have fresh baguettes," says Le. "Our baguettes are crispy, not too hard like some American baguettes."
The company has developed four different size Lee's quick-service restaurants. The largest ones, at about 8,000 to 10,000 sq. ft., are production stores, which house automated bread make-up equipment that produce about 10,000 baguettes a day. "They can produce a maximum of 3,000 baguettes an hour," Le says.
The production stores supply themselves with finished baguettes and croissants and deliver refrigerated dough to other stores, which bake the products in rack ovens every half-hour. Production occurs behind glass walls in full view of customers.
"Our dough is never frozen," Le says. Lee's signature sandwich, called banh mi, features Vietnamese cold slices of barbecue pork, head cheese, ham and duck liver pâté topped with daikon radish, carrot, mayonnaise, onion, jalapeno, cilantro, salt, pepper and a dash of soy sauce. The restaurants serve a full range of Vietnamese and Euro-American sandwiches as well as ice coffee and a variety of smoothies using unusual fruits, such as avocado, duran, sour sop, jack fruit, taro, papaya and lychee.
Lee's Sandwiches is proving popular for its fresh baking and multi-cultural flavors. Founded in 1980 when the Le family emigrated from Vietnam to San Jose, Calif., the company started as a foodservice catering truck. The family called it Lee's Foodservices with the extra 'e' to appeal to the American market. In 2001, Lee's Sandwiches opened its first fast-food sandwich store in Westminster, Calif.
The most recent Lee's Sandwiches opened in Chandler, Ariz. to lines of customers in June, and another full-production store is scheduled to open in Houston this summer.
French bakery cafe eyes U.S. market
PAUL BAKERY CAFE'S newest location in Miami is only the beginning of this French bakery chain's grand plan for expansion in the United States.
Paul traces its history back more than 100 years to a small bakery in Northern France. Today, the company has grown to more than 300 bakeries and cafes in Europe, the Middle East and Asia. Paul plans to open 100 bakery cafes in the Southeast United States during the next few years, including about 30 in Florida, under the direction in the United States by Paul U.S.A. Vice President Luc Bansay and C.E.O. Vladimir Alfa of the Apety Group.
Paul's décor and product line are designed to evoke the sense of a cozy village café, according to company officials. Its décor features antique chairs and tables imported from France and an open bakery that provides guests full view of production.
The restaurants serve breakfast, lunch and dinner, and central to its product line are 140 varieties of artisan breads produced from scratch using traditional long fermentation methods. Among the most popular breads are the Paul Bread, a traditional-style white bread; the Healthy 6 Grain and Fougasse, a bread from Southern France made with olive oil.
The 3,200 sq.-ft. Miami location offers seating for 40 indoors and 40 outdoors. The restaurant also offers an array of fruit tarts and specialty confections, such as Paul Macarons, meringue cookies in chocolate, vanilla, coffee or pistachio flavors. The menu includes French-inspired sandwiches, soups and salads. Paul's Parisian sandwich, for example, features French ham, butter and gherkin pickles served on rustic bread.
Paul bakeries are noted for their classic black façade and storefront windows continuously filled with bakery products to tempt window shoppers. "We didn't want to change the look every four years just to seem trendy," says Francis Holder, Paul's founder. "Our customers feel comfortable in our boutiques because they give the impression of always having been there."
Negotiations are underway for three more stores in the Miami tri-county area by the end of this year, Alfa says. The 3,000-sq.ft. Paul bakeries average $2 million in sales annually, he added.
50 largest foodservice bakery operations | ||||||||
| Rank | | | | U.S. baking units* (franchised, co.-owned, licensed) | Planned addtions | Sales (fiscal or calendar yr.; $ millions) | ||
| 2005 | 2004 | Chain | Headquarters | Business | 2005 | 2004 | 2005 | 2004 |
| 1 | 1 | Dunkin' Donuts | Canton, MA | donut shops | 4418 | 4000 | 100 | 4,100# |
| 2 | 2 | Mrs. Fields Original Cookies | Salt Lake City, UT | cookie, pretzel bakeries | 1125 | 1324 | 30 | 173.9# |
| 3 | 7 | Daylight Donuts | Tulsa, OK | donut shops | 900 | 575 | 75 | 227# |
| 4 | 5 | Panera Bread | Richmond Heights, MO | bakery cafes | 773 | 669 | 155 | 1,163# |
| 5 | 4 | Auntie Anne's | Gap, PA | pretzel, cookie bakeries | 712 | 692 | 60 | 236.6# |
| 6 | 3 | New World Coffee-Manhattan Bagel/Einstein-Noah Bagel | Golden, CO | bagel bakeries | 700 | 720 | 60 | 373.9# |
| 7 | 8 | Bob Evans Restaurants | Columbus, OH | restaurants | 538 | 550 | 12 | 997# |
| 8 | 9 | Perkins Family Restaurants | Memphis, TN | restaurants | 470 | 494 | 8 | 787.1# |
| 9 | 10 | Golden Corral | Raleigh, NC | restaurants | 468 | 475 | 15 | 3,340# |
| 10 | 6 | Cinnabon | Atlanta, GA | cinnamon roll bakeries | 400 | 617 | NA | 169.9# |
| 11 | 12 | Krispy Kreme Doughnut | Winston-Salem, NC | donut shops | 375 | 337 | 0 | 975# |
| 12 | 11 | Ryan's Family Steak House | Greer, SC | restaurants | 297 | 344 | 19 | 827# |
| 13 | 13 | T.J. Cinnamon's | Ft. Lauderdale, FL | cinnamon roll bakeries | 287 | 250 | NA | 91.8# |
| 14 | 23 | Big Boy Restaurant & Bakery | Warren, MI | restaurants | 269 | 151 | 0 | 390# |
| 15 | 16 | Tim Hortons | Dublin, OH | full-line bakeries | 251 | 227 | 83 | 183# |
| 16 | 14 | Bruegger's Bagel Bakery | Burlington, VT | bagel bakeries | 246 | 243 | 20 | 153.2# |
| 17 | 15 | Cookie Bouquet/Cookies by Design | Plano, TX | cookie bakeries | 230 | 240 | 15 | 56= |
| 18 | 17 | Village Inn | Denver, CO | restaurants | 224 | 224 | 20 | 326.3# |
| 19 | 19 | Great Harvest Bread | Dillon, MT | bread bakeries | 210 | 181 | 4 | 4# |
| 20 | 20 | Winchell's Donut House | Santa Ana, CA | donut shops | 200 | 180 | 0 | 60# |
| 21 | 18 | Au Bon Pain | Boston, MA | bakery cafes | 188 | 197 | NA | 245 |
| 22 | 21 | My Favorite Muffin/Big Apple Bagel | Chicago, IL | muffin/bagel bakeries | 170 | 167 | 5 | 5.7# |
| 23 | 22 | Atlanta Bread Co. | Smyrna, GA | bakery cafes | 170 | 166 | 25 | 177.5# |
| 24 | 25 | Bakers Square | Denver, CO | restaurants | 150 | 149 | 4 | 220.4# |
| 25 | 24 | Honey Dew Assoc. | Braintree, MA | donut shops | 148 | 150 | 3 | 59.2# |
| 26 | 26 | Marie Callendar | Orange, CA | restaurants | 145 | 144 | 20 | 321# |
| 27 | 28 | Wetzel's Pretzels | Pasadena, CA | pretzel, cookie bakeries | 143 | 122 | 75 | 3# |
| 28 | 27 | Coco's Café & Bakery | Irvine, CA | restaurants | 127 | 133 | 0 | 185# |
| * actual figures and Modern Baking and industry estimates | # all foodservice sales | =retail bakery sales | + not listed | |||||
50 largest foodservice bakery operations | ||||||||
| Rank | U.S. baking units* (franchised, co.-owned, licensed) | Planned addtions | Sales (fiscal or calendar yr.; $ millions) | |||||
| 2005 | 2004 | Chain | Headquarters | Business | 2005 | 2004 | 2005 | 2004 |
| 29 | 38 | Wall Street Deli | Lake Success, NY | bakery cafes | 100 | 50 | 15 | 50.1# |
| 30 | 29 | Frullati Café & Bakery | Scottsdale, AZ | bakery cafes | 94 | 99 | 55 | 10# |
| 31 | 33 | Cosi | Deerfield, IL | bakery cafes | 90 | 83 | 10 | 110.6# |
| 32 | 34 | The Cheesecake Factory | Calabasas Hills, CA | restaurants | 87 | 77 | 14 | 865# |
| 33 | 31 | Corner Bakery | Chicago, IL | bakery cafes | 86 | 90 | 12 | 212# |
| 34 | 30 | Southern Maid Donuts | Garland, TX | donut shops | 86 | 95 | 0 | 2# |
| 35 | 32 | Grandy's | Lewisville, TX | restaurants | 81 | 85 | 15 | 52# |
| 36 | 35 | Yum Yum Donut Shops | City of Industry, CA | donut shops | 71 | 75 | NA | 21# |
| 37 | 36 | La Madeleine Bakery, Café & Bistro | Dallas, TX | bakery cafes | 62 | 62 | 0 | 119# |
| 38 | 39 | Great American Bagel | Westmont, IL | bagel bakeries | 47 | 48 | 6 | 31# |
| 39 | 40 | Paradise Bakery & Café | Aspen, CO | bakery cafes | 40 | 40 | 5 | 27.7# |
| 40 | 37 | Paradise Donuts | Catoosa, OK | donut shops | 39 | 61 | 14 | NA |
| 41 | 41 | Breadsmith | Whitefish Bay, WI | bread bakeries | 35 | 36 | 3 | 17.5# |
| 42 | 44 | Bear Rock Café | Cary, NC | bakery cafes | 33 | 29 | 18 | 3.2# |
| 43 | 43 | Cindy's Cinnamon Rolls | Fallbrook, CA | cinnamon roll bakeries | 30 | 34 | 2 | 23# |
| 44 | 47 | LaMar's Donuts | Centennial, CO | donut shops | 28 | 23 | NA | 13# |
| 45 | 46 | The Kolache Factory | Houston, TX | bakery cafes | 28 | 24 | 5 | 13.3# |
| 46 | + | Lee's Sandwiches | San Jose, CA | bakery cafes | 20 | NA | 10 | NA |
| 47 | 45 | André-Boudin Bakeries | San Francisco, CA | bakery cafes | 20 | 26 | 0 | 35# |
| 48 | 48 | Finagle A Bagel | Newton, MA | bagel bakeries | 19 | 19 | 3 | 19# |
| 49 | 49 | Crescent City | Houston, TX | bakery cafes | 18 | 17 | 6 | 11# |
| 50 | 50 | Champagne French Bakery Café | San Marcos, CA | bakery cafes | 16 | 16 | 0 | 9# |
| * actual figures and Modern Baking and industry estimates | # all foodservice sales | =retail bakery sales | + not listed | |||||