| Balducci's... at a glance Parent company: Sutton Place Group |
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| Breakfast pastries, including fruit tarts prepared with fresh whole berries, represent a third of sales. |
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| The high peaks on Balducci's meringue pies bake golden brown and contribute to the bakeries' eye-cathching displays. |
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| "New & exciting" labels draw customers' attention to new products and provide thorough descriptions. |
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| Sutton Place Group's central bakery staff of 85 produce most in-store products. |
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| Customers can chose to have their artisan breads sliced by bakery staff. |
Last year, Bethesda, Md.-based Sutton Place Group reached a turning point in its corporate direction. Long known for its gourmet markets filled with pricey, hard-to-find specialty foods from around the world, the company found itself not as special as it once was. The gap between gourmet food stores and supermarkets had narrowed. Specialty foods are increasingly found in traditional supermarkets, department stores and even convenience stores. And, competition continues from other growing specialty chains in its territory, such as Whole Foods Market, Wild Oats and Wegman's Food Markets.
"Customers loved our stores and our products, but they shopped our stores mainly for special occasions," says Pascal Jubault, vice president, buying and merchandising and bakery director.
The company operated six supermarkets in the Washington D.C. area under the Sutton Place Gourmet name, four in New York and Connecticut as Hay Day Farm Markets and one Balducci's store in Manhattan. But, all stores either have been transitioned or are in the process of changing to Balducci's Food Lover's Markets. All eleven stores have in-store bakeries supplied primarily from the company's central bakery in Rockville, Md.
The name change and more focused approach comes under the direction of its new president and chief executive officer, Mark Ordan, founder of natural foods supermarket Fresh Fields. (After building the chain to 22 stores, he sold it to Whole Foods Markets in 1996.) Ordan's vision for Sutton Place includes revamping its stores by reducing prices on more than 1,000 SKUs, adding more household items, dropping its branded wholesale lines and incorporating store redesigns and its new name.
"While continuing to offer some of the most special foods available, we are also aiming to capture more of the everyday shopping dollars in our market areas," said Ordan in a company release. "And, you can't do that when your prices are out of whack."
Bakeries tweak product line
This transformation is evident in its in-store bakeries' more concentrated product line and wider range of price points, according to Jubault. "When you offer too much variety, you tend to lose focus," he says.
For example, the bakeries now offer three different Danish varieties instead of 10. "That way, we can concentrate on making those three varieties the best," Jubault says. The challenge, he adds, is that customers get used to having so much variety. It requires careful planning to back off and find the right ones.
Reducing SKUs does not, however,-translate to a stagnant product line. The bakeries are continually developing new products to maintain customer interest. Many new products, particularly among Balducci's-gourmet cake line, are developed around the supermarkets' themebased promotional festivals.
Balducci's bakeries debuted the Dacquoise torte for the French festival, the Zuccoto torte for the Italian fest and the Wild Berry cake with three fresh fruits for its Mardi Gras celebration. The new cakes earned their place as regular items in Balducci's product line, replacing other less popular varieties.
While the product line may be more controlled, the quality ingredients and care taken to produce the products remain a priority for Sutton Place Group. The company sources top-notch food products from around world, from Australian honey to Oregon preserves. If the products are available as bulk ingredients, some are incorporated into bakery formulas, Jubault says. The bakery does not skimp on other bakery ingredients either. The fine chocolate and European-style butter used in its products caters to Balducci's food savvy customers. "Here, quality still comes first," he adds.
Most products for the company's in-store bakeries are supplied by its central bakery, which employs about 85 people. About 16,000 sq. ft. of the 24,000-sq.-ft. space is dedicated to bakery, which includes a pastry room, cake finishing room and main bakery production area. The bakery produces a line of about 300 different bakery products daily, using primarily scratch/mix production.
The day shift, which begins at 5 a.m., is divided into bread and pastry crews. The crews mix, shape and prepare products for finishing by the night crew, which begins at 2 p.m. The night crew bakes products, finishes decorating cakes, fills and tops pastries and packages products for delivery. Trucks begin delivering to the Balducci's stores at 2 a.m.
Organized management
Organized management and cross-trained staff keep production running smoothly. Each department, bread and pastry, is broken down into sub-departments for specific product categories. Each sub-department has a supervisor, and employees move to different areas of responsibility at least every six months. Working with a variety of products keeps staff challenged and broadens their skills.
Four head managers oversee the entire operation: Nelson Bustillo, bakery manager; Louis Mendoza, bread; Manuel Ahmida, pastry; and Julie Leyis, project manager. "We're not a factory," Jubault says. "We take solutions and ideas from everyone."
Also essential to its organized production are the central bakery's freezers, including a blast freezer used for freezing cake layers, parbaked breads and other products that benefit from a quick deep freeze. The blast freezer is particularly essential for Balducci's par-baked breads, which are baked at each instore to provide fresh-baked breads on demand. Varieties include baguettes, sourdough, olive and rosemary breads.
The artisan bread line is produced at the central bakery using a 48-hour sourdough process. Bakers use seven preferments, such as sponges, pumpernickel sours, rye sours, etc., to create about 25 different doughs. Challah and rosemary breads are its top selling varieties.
Product sales breakdown evenly at about 33 percent of bakery sales among breakfast pastries, cakes and breads. Custom-decorated cakes have become a strong growth category for Balducci's, according to Jubault. Evidence of the company's efforts to reach a broader customer base, the bakeries found an untapped demand in their custom-decorated cakes. Not as complicated as its gourmet tortes, its decorated cakes are an "easy sell" because of their mainstream familiarity. Cake borders and piping decorations are kept in a classic, subtle style, and the bakeries also offer licensed character images.
Showcases stop customers
Balducci's in-store bakeries display their decorated cakes in European-style, curved glass, refrigerated service showcases together with their complete line of gourmet tortes, tarts and other desserts. The showcases truly stop customers in their tracks as they shop. To draw attention to new items and direct customer focus through the showcase display, some products are marked with a "NEW & exciting" label.
Its lemon brioche buns, for example, feature the label and the description, "rich buttery roll, sliced and filled with wonderful lemon scented cream filling." Other new products include the Vergel Delight cake and Brazilian double chocolate cake. Vergel Delight is a yellow sponge cake soaked in vanilla syrup, layered with "orchard fruit" mousse (pear, apricot, plum and red current puree). The Brazilian features coffee-soaked almond sponge layers with chocolate and white chocolate mousse.
The in-store bakeries, although not competing with as many departments included in traditional supermarkets, represent 10 percent of total store sales. Even with the changing face of the company, Balducci's management wants to maintain that volume. As the company completes its initial transition to Balducci's Food Lover's Markets in name, logo, packaging, store facades and interior design, it is planning the second phase: opening more stores.
Phase two begins
It is opening a new 17,000-sq.-ft. store in New York City's historic New York Savings Bank building to open by February, 2005. More growth is planned for the New York metropolitan area with a goal of 15 to 20 more Balducci's in the next three to five years.
"I'm really excited to see us opening new stores again," Jubault says.
He says the central bakery will continue to supply the new stores as capacity allows. Some finished and parbaked artisan breads, however, may be outsourced to ensure the freshest product in the New York City stores.
Sutton Place Group is marketing its transition through radio advertisements and newspaper articles and print advertisements that tout its new, more versatile stores with the famed Balducci's name. "The high quality and selectivity are still there," Jubault says. "We're just more affordable."
| A sampling of Balducci's retail prices | |
| Lemon meringue pie, 9 ins | $12.99 |
| Apple pie, 9 ins. | $12.99 |
| Georgia pecan pie, 9 ins. | $16.99 |
| Rum cake, 8 ins. | $13.99 |
| Chocolate birthday cake, 8 ins | $16.99 |
| Chocolate raspberry truffle cake, 8 ins. | $25.99 |
| Decorated 1/4 sheet cake | $12.00 |
| Fruit tart, 10 ins. | $27.99 |
| Napoleon, 10 ozs. | $3.59 |
| Chocolate nut brownie | $1.99 |
| Blueberry muffin | $1.69 |
| Butter croissant | $1.69 |
| Raisin scone | $1.69 |
| Cheese Danish | $1.69 |
| Marble rye bread, 1 lb | $3.29 |
| Olive bread, 1 lb | $4.59 |
| Baguette | $1.99 |
| Sourdough boule, 1 lb. | $3.99 |
| Small country bread, 8 ozs. | $1.99 |