Controlling product stales is a balancing act–too many stales and bakeries lose money; too few stales and the bakeries may be losing sales by not producing enough product. Stales are a fact in the bakery business, but they don’t have to mean a complete loss. Many products can be recycled or repurposed into new products. John Chickery, bakery director, Riesbeck Food Markets, St. Clairsville, Ohio, shares his insight into successfully repurposing stales to control ingredient costs and increase a bakery’s profitability.
How does Riesbeck’s maintain profitability?
More than anything in the bakery, cost of ingredients is always on your mind. Every time you have a price increase for ingredients you have to look at raising your retail. I don’t think anybody wants to raise retail, but it’s part of business. If you’re not watching your costs, the next thing you know, you’re not going to be making money.
How often does Riesbeck’s look at ingredient costs?
Every time an invoice comes in, it is entered into the system and is tracked. If there’s an increase, the system raises a flag. The flag is very general, but just because you have a price increase doesn’t mean you want to raise your retail.
What is the threshold for a cost increase being flagged?
If it’s 5 percent or greater. When you have a price increase that’s 5 percent or more, and you’ve got X amount of products that are using that ingredient, then you need to look at it. [The system also looks at each product’s ingredient list. So, if one product has three ingredients with price increases that total more than 5 percent, it is flagged.]
There’s more to it than just ingredient increases when thinking about changing your retail. You also want to look at what the competition is doing and what people are doing in your general market area. Knowing your costs certainly is something everybody in the industry is looking at. Gross profit is something we look at overall on a monthly basis.
What prompted Riesbeck’s to repurpose product?
We’ve always done it. Recycling product isn’t something that Riesbeck’s created, it’s something the industry has done for a long time. It’s widespread. Bakeries do recycle product. One of the things about the recycling of product is it certainly is going to help your gross. Is it going to eliminate all your problems? No, it’s not. But it’s a tool you can use to improve your gross. Once we record it as a throwaway, then we’re not counting it back into the cost of ingredients for the product we use it in.
What categories of product are best suited for repurposing?
You can’t recycle everything, but certain categories work really well. Cake is probably the biggest category that’s recycled. It is used in several different items, like bear claw filling, poppy seed filling and cookies. I can’t tell you the number of formulas that call for cake crumbs. We don’t make a multitude, we only use cake crumbs for one cookie.
Bread is another category. There are several different things you do with bread. You can make bread stuffing cubes, bread crumbs or make garlic bread from stale Italian. You can’t recycle all bread. We usually just recycle white breads because you don’t want flavors influencing the other product. We also do a cinnamon toast bite, which it is an outstanding way to help with your bread stale factor. It’s a bread cube that’s been buttered and sugared and then toasted. It’s a great snack item, and it’s sold by the 8-oz. container. We don’t stale any of this product. If I’ve been sitting on bread cubes for a period of time and I want to convert the bread cubes to cinnamon toast bites, I can easily do that. And then I can replenish the bread cubes with the stale bread again.
Donuts, whether cake or yeast-raised, also can be recycled. Just about everyone has a Spanish spice cake. The item you’re using the most of in it is recycled donut, whether it’s cake or yeast-raised. Now, cake donut is what you want to use in that product, but you can use up to 10 percent of yeastraised product as well. It gives you an avenue for recycling both types of donut products.
If you look at the categories, cake is a huge category in almost every bakery. Bread is certainly a large category, and so are donuts. If you look at those three, that’s a huge chunk of your total business every day. So to take those three categories and say, “Here are some things I can do to recycle product that is going to improve or help my gross,” that accounts for a big chunk of total overall sales that you can recycle to help your gross.
What is the impetus behind repurposing product?
I think when you can, if you’re trying to drive or increase sales, it’s an escape route you can use. I’ll use bread as an example. If I want to increase bread sales, the people at bakery level look at the stale factor and say, “Look how much I’ve staled, I need to cut back.” And then you’re cutting back, and instead of driving sales upwards, you’re reducing the amount of product you put out so much to control stales that you lose sales. If you have an escape route, you say, “I don’t care what we stale because we’re going to turn stale bread into this, this and this.” This gives that bakery the freedom to say, “OK, I’m going to try to drive sales, and I’m not going to worry about my stales because I can convert it to something else.” So it’s a plus. It’s a win-win for everybody if you can look at it from that viewpoint.
Is it a total answer to all of your problems? No, it isn’t. But it does give you an out. When you recycle product, it’s only going to help your gross and your bottom line. You certainly aren’t going to rely on recycling all of these products to make you or break you. It just doesn’t happen. You’ve got to have the sales with your first run product. But by recycling some product, you increase your gross profit structure.
Because you are allowing recycling of certain product categories, do you allow a higher stale percentage for those categories?
We try to keep stales at 8 to 10 percent, and we record everything we pull– stales, donations and throwaways. We don’t account for the recycling of the products as cost of ingredients the second time around because we’ve already paid for it. Because they recorded it as a throwaway, they have paid for it.
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So overall stales, we still look at that 8 to 10 percent but it goes back to driving sales. If I want to try to drive sales, I tell everybody, “Don’t worry about what you’re going to stale on this product because you have an avenue of escape to use the product if it doesn’t sell.” It kind of takes a little bit of pressure off and gives them some freedom.
They’re not going to worry about the stales because it doesn’t matter; they’re going to recycle the product.
Have there been products that you’ve tried to repurpose that haven’t worked out?
Yes, unfortunately. The one that comes to mind is cobbler, which uses recycled pie. Our pie has a three-day shelf life. We may cut it for pie slices or we may make a pie parfait from it, and then it give it two-day shelf life. But cobbler is something we’ve never been successful with it. We’ve tried several different formulas, but it obviously is not for us. It’s not for this area. There are areas where cobblers do very well and I’m sure it’s from recycled product.
What are some of your most popular products made with repurposed product?
Spanish spice bar, without a doubt. We don’t have it all the time, but there have been times when I put it in the ad and we actually have to make it with fresh donuts. Cinnamon toast bites have been a home run. We give each package a 14-day shelf life; we could easily give 90 days, but we don’t and we don’t stale it. If we ran into a sales problem, then we would look at lengthening the shelf life, but we don’t need to in this point in time and we’ve been offering it for about nine months.
I think if there are bakeries out there that don’t really recycle, then maybe they should think about it. There’s nothing wrong with it. It’s been going on probably since the beginning of time in some form or another. Nobody likes waste. When you’re recycling, you’re using good product. The quality is there to begin with.
John Chickery has worked for Riesbeck Markets since 1966 when he started as a carry-out person. Since then, he has worked in every department, including being a store director for 25 years before signing on as bakery director in 1996. The original agreement was Chickery would fill in as bakery director for six months, and 15 years later, he’s still enjoying running the scratch/mix operation. Riesbeck’s operates 14 stores under several different banners, including Riesbeck Food Markets, Riesbeck Pick’n Save, More for Less and Village Market. Riesbeck is currently run by the third generation of the Riesbeck family with the fifth generation working in the stores.