Successful retail bakeries usually know their customers by name, produce high-quality products that cater to their specific neighborhoods and keep a close eye on profitability. Walt's Country Bakery, the in-store bakery department of Walt's Food Centers, South Holland, Ill. does all that, too. Plus, it gracefully manages the added labor, production and corporate pressures that have pushed other supermarket chains to cut corners in their bakeries and take the easier cookie-cutter approach.
Walt's in-store strategy isn't easy, but it is old school in that the company focuses on what its customers really want in bakery and empowers in-store bakery staff and other perishables departments to make smart decisions for their customers and ultimately Walt's Food Centers. Central to that focus in the bakery department has been the leadership of Bakery Director Dean Sytsma, a fourth-generation baker who trained at the Dunwoody School of Baking in Minneapolis and was hand picked by Walt's co-owner John Lagestee to develop its in-store bakery program in 1979.
Walt's remains a family-run independent supermarket chain, still operated by the Lagestee family. Walter Lagestee started the business as a farm stand in 1938; his sons John, Bob, Bill and Jim helped evolve the business into the full-service supermarket chain it is today. Now with seven stores, located primarily in Chicago's south suburbs, the third generation of Lagestees (John Jr., Tim, Paul and Rob) are at the helm pursuing new growth opportunities for the independent chain.
The Lagestees' foresight to be among the first stores to take on once emerging services, like adding delis and bakeries and more recently banks and pharmacies, has been among Walt's strengths. The supermarkets are equipped with the services of the large national chains while still maintaining a manageable store size (ranging from 30,000 to 40,000 sq. ft.) and retaining the personal customer service of a neighborhood store. Now engrained in the company's strategy, Walt's perimeter perishables departments, particularly bakery, are integral to top management's plans for new stores and remodels.
“If I were designing a store and building it from scratch, I'd prefer bakery early in the traffic flow. It sends a fresh, service message,” says John Lagestee Jr., Walt's general manager. The privately held company declined to offer exact sales figures, but its in-store bakeries contribute about 3.5 percent of total store sales and generate more than $2 million annually.
The Lagestee family incorporates staff as part of the larger Walt's Foods family and remains hands-on in the business, but avoids micro managing. With the Lagestees leading by example, Walt's staff knows its customers and welcomes the freedom to take ownership in their departments. The bakeries, in fact, do not have problems finding and keeping skilled labor and are even benefitting from other chains' inattention to bakery. An example of this is Toni Rambo, cake decorator at the Frankfort location, who has decorated cakes for 30 years, much of that time for in-store bakeries. She's been at Walt's for less than a year, but jumped at the opportunity to work for its reputable in-store bakery program.
“Working for a family store is appealing. This is much more comfortable and allows me to be more creative,” Rambo says.
Encouraging creativity
In-store bakeries carry a full line of products prepared primarily from scratch/mix and bases. Frozen layers are used for cakes as well as some frozen and par-baked doughs for the bread line. The bakeries try to maintain consistency store to store in some products, but bakery managers are encouraged to decorate, finish, merchandise and order products according to customer demand for each particular store.
“We allow them to be creative with some of the different products and extend successful items out to the other stores. And if it is a product we make, we'll make more profit on it than a thaw-and-sell item,” says Dean Sytsma, bakery director. “There is a place in the market for thaw-and-sell, but that is for the stores that don't have the trained help that we're lucky to have.”
Sytsma balances Walt's product line profitably with a keen eye toward quality and production flexibility that can only come from experience. While each in-store produces most of its products at store level, two major product lines-cake donuts and breads-are centralized to improve consistency and produce in mass.
The Crete store houses the cake donut central facility, and the South Holland store handles Walt's exclusive line of pan breads and buns. “These items were extremely labor-intensive, so I put them in a manufacturing situation,” he says.
The in-store bakery measures about 5,000 sq. ft., which includes 2,000 sq. ft. of production space. A fully automated donut machine drops as many as 200 dozen donuts an hour. “We brought in this machine to help us control cost of goods and improve consistency in our cake donuts and donut holes,” Sytsma says. Yeast-raised donuts, however, are mixed, proofed and fried at each store. “That is one thing I won't centralize,” he says.
Along with maintaining its own in-store bakery, the Crete store manages the donut orders from the other six stores, manufacturing and prepping the donuts for shipment by 4 a.m. each day. In turn, the South Holland store begins baking breads at about 5 a.m., packaging them by 6 p.m. and starts delivering the breads to the other stores at around 10 p.m.
With Crete the last bread stop for the South Holland delivery truck, donuts are then backhauled on the empty truck for delivery to the other stores as it returns to South Holland, the truck's final destination until the next morning when the delivery route begins again.
Just as Walt's in-stores developed an efficient system for its labor intensive lines, Sytsma also maintains a balance of production methods at each in-store, opting for scratch/mix production for the bulk of Walt's products and frozen or par-baked doughs for others. Using frozen and par-baked doughs improves freshness of some products because bakers can bake on demand. “We're able to control our stales a little better that way,” Sytsma says. “The more we can produce of our own, the better off we are profitwise.”
Customer contact key
Each bakery has a bakery manager, experienced bakers and cake decorators and sales people who all have a direct line into what their customers want.
“The quality is better here because we make it ourselves. The fact that this is still a family-owned business adds to this made-from-scratch image,” says Greg Lockwood, head baker for the Frankfort store. “Certain customers come to Walt's just because of that.”
Most stores feature open production, so customers know fresh baking is going on. The aroma alone can tell them that. And, cake decorators work in view of customers. While the bakeries merchandise some packaged items on self-service merchandisers to promote convenient shopping and impulse sales, Walt's in-stores rely more on sales through its service cases.
“Walt's was founded on the firm belief in customer service. That's what makes us different as an independent supermarket in the industry,” Sytsma says. “We still wait on the customers personally, take care of their needs and haven't gone too far into the self-service aspect.”
 |
 |
 |
| (from top) Walt’s signature line of sandwich breads, including its topselling chunky cinnamon bread, are centrally produced in the South Holland store. Kris Scroggins decorates cakes in view of customers. Walt’s is renown for the quality and variety of its donut line. |
Service cases are always manned, bringing customers in contact with sales associates. Sytsma also feels service cases are more hygienic than displaying pastries and other individual products in self-service cases where customers pick out and bag the items themselves. Plus, full cases of beautifully decorated and garnished cakes, pastries, donuts and cookies stop most customers in their tracks.
Good position in tough economy
Even during these lean economic times, Walt's in-stores are in a good position as customers are looking more to supermarkets for help preparing meals at home rather than eating out at restaurants. “We're seeing an increase because we offer comfort foods,” Sytsma says. “I don't wish for a recession, but we appreciate the extra business.”
An aging population and consumer trend preferences toward smaller, more convenient supermarkets also give Walt's Food Centers a distinct advantage over mass merchandisers. And, Walt's down-home customer service is hard to replicate in large national chains.
“Our customer base has always been a little older than the zip code demographics,” Lagestee adds. “I say that's because it takes a few years of experience for people to understand what true value is.”
Walt's Foods' at a glance
Founded: 1938 by Walter Lagestee
Headquarters: South Holland, Ill.
Website: www.waltsfoods.com
Bakery management: John Lagestee Jr., general manager; Dean Sytsma, bakery director
Number of stores/in-store bakeries: 7/7
Store sizes: 30,000 to 40,000 sq. ft.
In-store bakery size: (Crete store) 5,000 sq. ft., including 2,000-sq.-ft. production, 3,000-sq.-ft. retail area
Primary production methods: coffee cakes, cookies, yeast-raised donuts, cake donuts, pan breads: scratch/mix in centralized bakeries; decorated cakes: frozen cake layers; artisan and specialty breads: scratch/mix, frozen and par-baked doughs
Bakery equipment: vertical mixer, rack ovens, proofer, refrigeration, bread slicer, sheeter, donut fryers, automated donut machine, computerized cake decorating equipment
Plans: explore additional store locations in south and west Chicago suburbs and possibly Indiana; continue remodeling and maintaining current stores
Bakery distributors: Best Brands, Dawn Food Products
Walt's Foods' sampling of prices
| Pastries: | |
| Bear claw, 3 ozs. | $0.99 |
| Almond croissant, 3 ozs. | $1.29 |
| Pecan roll, 3 ozs. | $1.49 |
| Butter cookies, per lb. | $7.99 |
| Cake donut, 2 ozs. | $0.55 |
| Yeast-raised donut, 3 ozs. | $0.79 |
| Brownie, 2 ozs. | $1.49 |
| Cream puff, 3 ozs. | $1.59 |
| Napoleon, 3 ozs. | $1.59 |
| Blueberry muffin, 4 ozs. | $0.99 |
| Gourmet coffee cake, 24 ozs. | $5.49 |
| Strudel, 24 ozs. | $4.99 |
| Cakes and Desserts: | |
| Bar cake, 24 ozs. | $10.99 |
| Torte, 8 ins. | $9.99 |
| Decorated cake, ½ sheet | $25.99 |
| ¼ sheet | $15.99 |
| 8-in. round | $13.99 |
| Specialty breads: | |
| Buttercrust bread, 1 lb. | $2.49 |
| Cinnamon raisin bread, 1 lb. | $3.29 |
| Vienna bread, 1 lb. | $2.49 |
| Whole wheat bread, 1 lb. | $2.49 |
| Egg twist bread, 20 ozs. | $2.89 |
| Rye bread, 1 lb. | $2.49 |
| Artisan Breads: | |
| Seeded wheat, 20 ozs. | $3.99 |
| French baguette, 20 ozs. | $2.49 |
| Pecan raisin, 20 ozs. | $3.99 |
| Country white sourdough, 20 ozs. | $3.29 |