Tom Ivory is the first to admit that it has been somewhat of a roller coaster ride for Baker Street Bread Co. It has gone from a $1 million retail operation to a $2 million primarily wholesale supplier. For him, maintaining a high profile and continually increasing profitability in a maturing market has been a matter of flexibility–and learning to roll with the punches.
In 1992, Baker Street Bread Co. was the buzz of Philadelphia when brothers Tom and Tim Ivory opened their European-style artisan bakery in the upscale neighborhood of Chestnut Hill. Within a year, Baker Street had earned a multitude of local food awards and widespread national recognition. By 1994, bakery sales had soared to $1 million.
Buoyed by the early bread boom, Baker Street opened four additional retail locations (three of which were cold sites) in the Philadelphia area, and by 1998, sales had climbed to almost $2 million. But market maturation and an influx of competitors began to slow down the retail momentum.
In 2001, Ivory, who has been running the operation solo since 1998 when Tim returned to upstate New York, had projected that Baker Street’s best bet for future growth and success would require expanding the wholesale side of the business. The bakery’s premium breads were soon appearing on tables of upscale restaurants and country clubs and on the shelves of selected specialty food stores in and around the city.
But ramping up for wholesale expansion required a shift in focus and resources, prompting Ivory to close all of Baker Street’s retail units except the original Chestnut Hill location.
“I felt that we needed to bring the entire operation back under one roof to allow us to streamline production and more effectively manage both the wholesale and retail sides of the business,” he says.
Accommodating this growing segment of the business required other basic operational changes as well. One major change was a dramatic increase in production of dinner and burger rolls, which the bakery had previously only offered in a few varieties and limited to its retail customers.
“We had always regarded the production of more than a few types of artisan rolls as too time- and labor-intensive to be profitable on a retail level, but we provided about three or four kinds because our customers requested them,” Ivory explains. “When it comes to restaurants, though, Philadelphia is definitely a roll town, so if we were going to be truly competitive as a wholesale supplier, we had to commit to increasing our offerings in that category.”
To support the rise in roll production, Ivory purchased two rack ovens and a pair of roll presses. These equipment additions allow the bakery to turn out 150 dozen rolls at a time.
About half of Baker Street’s roll varieties, including the bakery’s best-selling ciabattini and onion poppy brioche burger rolls, require some level of hand-finishing to refine their shapes. Rolls account for about 40 percent of Baker Street’s total sales.
Shift in pastry production
Another area of the business targeted for makeover was pastry production. During Baker Street’s retail-focused years, pastry, including muffins, cookies, scones, hand-rolled cinnamon rolls, sticky buns, Danish and croissants, accounted for about 20 percent of the company’s total production.
For its retail store, the production crew still bakes four different kinds of cookies from scratch. But other pastry items, except for scones, are outsourced.
“Bread and pastry production require two different sets of skills,” Ivory explains. “Europeans traditionally separate the two into different operations; in France, for example, there are boulangeries and patisseries.”
Three different flavors of scones, which are available to wholesale as well as retail customers, are still made in-house. For wholesale clients, scones are offered in two sizes, 12-oz. full-size and 8-oz. medium.
Cookies and scones account for about one-half of Baker Street’s retail pastry sales. The fragility of the products limits them to Baker Street’s retail store.
Three-quarters of the sales at Baker Street, which Ivory notes is currently operating at 90 percent of its 4,000-sq.-ft. capacity, are from wholesale accounts. About 500 sq. ft. of the bakery’s storefront space is set aside for retail.
Designed to create a cozy boutique bakery environment, the space lines up its available loaves on a rack behind the front counter. Cookies, scones and other pastries are displayed on glass plates.
For customers in a hurry, a table filled with sliced, bagged loaves allows for grab-and-go convenience. Sandwiches, made daily with Baker Street bread, wait in the self-serve cooler.
Fifteen full-time and three part-time production employees work from 3 a.m. to 10 or 11 p.m. (not including a two-hour cleaning time) seven days a week to produce an average of 2,300 loaves in 25 varieties. About 350 of the loaves are earmarked for sale in Baker Street’s retail store.
A sampling of wholesale prices
Baguette, 14 ozs. $1.30
The production staff also makes several thousand dozen rolls in more than a dozen shapes, sizes and flavors from 10 different doughs per day, Ivory says. Because production is ongoing through out the day in the exhibition bakery, retail customers are surrounded by the sights and aromas of fresh baking as they line up for their loaves.
After closing, the retail space is quickly converted into a packing area for wholesale orders.
Three starters–white, rye and whole wheat–provide the foundation for many of the loaves and rolls. San Francisco sourdough and raisin walnut require three days to ferment; the others have four- to 12-hour fermentation times.
From the beginning, Baker Street has been known for its baguettes. In addition to the traditional variety ($2.25 retail, $1.30 wholesale), the bakery also produces garlic Parmesan and sesame-seeded versions of the classic French loaf. Among the wholesale clientele, it’s the 3-lb. pullman and large artisan sandwich loaves that are in the highest demand.
The most exotic variety, the apricot pistachio bread, developed as a retail specialty, found its way onto the wholesale menu when a celebrated Philadelphia restaurant requested it. At $5.25, this dried fruit- and nut-packed signature selection is the priciest bread on the everyday retail menu, and has been a brisk seller since its introduction in the bakery’s early years, Ivory says.
Exclusive to the retail menu are limited edition seasonal specialties, such as pumpkin cranberry bread (November and December), chocolate cherry bread (February) and Irish soda bread. Each of these 20-oz. loaves is priced at $5.95. Holiday breads, such as Easter babka and Christmas panettone, also are limited to retail. The panettone, made with orange peel, currants, honey, butter and fermented brioche dough, is priced at $15 and wrapped for holiday giving. The bakery produces about 300 of the 2 1/2-lb. loaves at a time.
Ciabattini (with and without onion) are the strongest sellers in both Baker Street’s retail and wholesale businesses year-round. Summer brings a 20 percent spike in sales of the bakery’s distinctive brioche-based burger buns (also available with onion and poppy).
While wholesale accounts keep production levels consistent, overall sales increase by about 20 percent in the spring and winter. Country club sales, which account for 10 percent of Baker Street’s wholesale clientele, decrease during the
traditionally slower summer season.
Ivory points out that in addition to consistent product quality, service is key to Baker Street’s ability to compete in the Philadelphia wholesale arena against bakeries with much larger production capacities. About 90 percent of the company’s restaurant roster (dining establishments comprise 70 percent of wholesale accounts) receive seven-day-a-week deliveries.
Baker Street Bread Co. at a glance
“We deliver every day except for Christmas,” he says. “Just as important, our clients know that if they run out of bread at 3 in the afternoon, they can just give us a call, and we’ll get more right out to them.”
Fifteen years have passed since Baker Street introduced European artisan-style breads to Philadelphia. During that time, the business has gone through some dramatic changes. And, according to Ivory, more are to come.
Currently, he is looking for a larger production facility. Then, Baker Street will be ready to grow again.
“Product- and operation-wise, we’re ready to break the $2 million mark,” Ivory says. “Our goal is not to become the largest or least expensive wholesale bread supplier in the area, just to maintain our reputation as the one that delivers the best, in terms of product and service quality and consistency, in the business.”