Modern Baking's 2012 Retail Bakery of the Year is Bit of Swiss, a retail and specialty wholesale bakery in southwestern Michigan that has seen sales growth every year since it opened in 1987.
If ever a retail bakery owner embraced the adage “to make money, you have to spend money,” that baker is Tim Foley, who with his wife, Pat, owns Bit of Swiss Bakery, a retail and specialty wholesale operation in southwestern Michigan.
Since acquiring Bit of Swiss in 1987, the Foleys have invested capital well into the six figures to expand and remodel facilities, open a second location in a Martin’s Super Market (see story on page 42), purchase new equipment, buy high-quality ingredients, pursue marketing and promotion projects, and hire, train and retain highly skilled staff. As important as investing funds, so, too, is the Foleys’ commitment to invest time and energy into their community and the baking industry.
Combined, their efforts have contributed to retail sales growing 10 to 14 percent year to year for the last five years and total sales rising annually for the last 25 years.
For all of these reasons, Modern Baking selected Bit of Swiss Bakery as its 2012 Retail Bakery of the Year.
Baking actually is a second career for the Foleys. Tim and Pat met while studying at the California Culinary Academy in San Francisco. They moved to Chicago where they worked in high-end restaurants. While in Chicago, the couple visited Pat’s family in the Stevensville area and learned that the bakery’s owner/founder was planning to retire. At that time, the bakery had 10 employees, a 12-pan revolving tray oven and was closed January through March–the area is popular spring through fall with vacationers from Chicago and Detroit.
The founder opened the bakery in 1967 and developed a small, yet loyal, customer base, having earned a reputation for offering high-quality bakery foods. “We believed the business had good growth potential,” Tim says. In 1987, after about five months of informal discussions, the Foleys purchased the business and property.
The Foleys also believed that they could continue to operate the bakery nine months a year and “have lives something like teachers.” They quickly recognized that would not work. “It would be impossible to grow the business and each year replace and train employees who didn’t return after being laid off for three months. Plus, we feel a responsibility for the people who work for us to provide a stable, professional work environment,” Tim explains.
The first order of business was to build the wholesale business to support the bakery, especially from late autumn through late spring. Bread would be crucial, he says. From the beginning, Tim wanted to introduce high-quality bread products. He became a charter member of the Bread Bakers Guild of America.
“A trip to France with Guild members opened my eyes to what really good bread can do for a bakery,” Tim says. After he returned, he visited several of the members’ bakeries and immersed himself in learning more about bread baking, which included experimenting with artisan procedures. Meanwhile, wholesale volume of bread and breakfast pastries climbed steadily, eventually straining production capacity.
After two years, “we had to make a decision,” Pat recalls: Remain where the bakery was off the beaten path within what later became an upscale residential community or relocate to a high-traffic commercial area. They chose to stay. “We believed we would succeed–people would come–if we offered high-quality products made with the best ingredients and if we were innovative with new products,” she says.
The decision made, the Foleys increased the bakery’s size, building a larger shell around much of the existing structure and increasing the size to 3,200 sq. ft. from 1,300 sq. ft. “The decision was the correct one,” Pat says. “People go out of their way for top-quality products that they cannot buy anywhere else.”
With the remodel, the Foleys installed a retarder/proofer, replaced the revolving tray oven with a rotating double-rack oven and pursued artisan bread production. Expansions since then have accommodated an office and additional new equipment, including a three-deck, nine-door hearth oven.
Invest in ingredients
Each day the bakery offers about 60 different pastry and bread items, taken from a product mix that includes 25 breakfast pastries, 40 types of cakes and tortes, and 10-plus bread varieties in more than 20 shapes. “During the first 10 years we made almost any cake that a customer requested,” Tim says. The list was trimmed to a manageable number. When a customer asks for a cake not listed, the staff ask the customer the occasion for the cake and the desired flavors for the cake, icing and filling. “Then we suggest an alternative. It works every time,” he adds.
Investing in high-quality bakery foods includes purchasing premium-grade ingredients. “We use the best ingredients that we can and push ourselves to make products better and better. I just won’t settle for anything less, and I do not deviate from the brands of chocolate, flours and pastry products we use because of spikes in pricing,” he says.
As Bit of Swiss has grown, Tim and his crew have taken production steps to ensure that they maintain high quality. For example, bakers scale ingredients for bread doughs in advance, which helps minimize errors during the press of production. And, Tim monitors ingredients markets, taking action when needed to avoid disruptions. Early this year, he learned that the Michigan Montmorency cherry crop would fall short because of an excessively warm spring, so he purchased and froze 5,000 lbs. of cherries to ensure adequate inventory.
Product development key
The Foleys recognized that investing in product development would be essential to building the business. The former owner had developed a reputation for high-quality products, including almond horns, Bavarian creams and Napoleons, which Bit of Swiss bakers still make the way he did. Indeed, Tim says, he considers two of the former owner’s products, salted rye bread and Bavarian cream cake, signature products.
“Yet, people’s tastes change, and we had to evaluate the product line,” he says. “The more we traveled across the U.S. and to Europe, the more we discovered interesting products. Not only did they taste great, they looked spectacular, too.” Because the store is off the beaten track, the Foleys needed to attract customers to the store, hear them say, “wow!”, when they see displays and explain that products taste as good as they look.
The Bit of Swiss crew initially developed new products nearly 20 years ago, introducing artisan breads, which helped increase wholesale volume. Tim notes that the community readily accepted artisan breads, largely because many residents were of German and other northern European extraction who were accustomed to Old World bread products.
Bakers use 16 different doughs to make up some 40 products that appeal to all local tastes–from classic, light-textured French baguettes and petit pain to dense, dark loaves and rolls with no white flour, such as Finnish rye with molasses and flax seed, multi-grain bread and German rye. The bakery also offers seasonal breads.
Prefermentation methods include rye and white sourdough starters, liquid levain and poolish for baguettes, and stiff levain and poolish for Paeano (Italian) bread. Some breads have three to four preferments, depending on the flavor and other desired characteristics.
Savory items marked a major new category a few years ago. For example, bakers sheet leftover croissant dough and spread with pesto sauce, feta cheese and artichoke for a lunch item. “This uses scrap dough, while it introduces a new product instead of relying on the usual spinach-and-feta croissant,” he says. Another item is the ham-and-cheese croissant topped with béchamel and cheese. Cheddar cheese bread, sold only on Saturdays, has become popular. “Many of our customers are well-traveled–San Francisco, New York, Paris–and recognize great bread and pastries. We’re offering high-quality products they cannot get anywhere else.”
Meanwhile, the bakery continues to offer traditional items such as coffeecakes and croissants just as it did 45 years ago. “Saturday mornings especially, the store is visually exciting with a mix of new and traditional products–there’s something that will appeal to everyone,” Pat says.
Sampling is integral to introducing new products, she continues. The sales staff samples different products every day, among them small sizes of new cakes. “Maybe a customer won’t buy an item after sampling it,” she says. “But, we will have planted a seed, and the customer will remember the product and may buy it later.”
Freshening the sales area
Investing in the business includes keeping the sales area fresh and up to date, the Foleys observe. While wholesale sales climbed steadily after they purchased the bakery, retail sales did not keep up. Tim attributed the lackluster performance in large part to the store’s dated displays and uninspired merchandising. “We also were concerned about the bakery’s image,” he says.
During the last five years, the Foleys replaced the service cases with modern units, which display product more effectively, and installed a marble display counter to present breakfast pastries. Plastic display trays were replaced with assorted china and wicker baskets lined with linen. On the walls behind the showcases, they mounted custom-designed ceramic tile art from France that portrays boulangerie and patisserie scenes. A new ceramic floor helped tie the elements together.
The sales staff starts arriving at 6 a.m. to fill the displays for the 7 a.m. opening weekdays. No products are held over except packaged items, such as biscotti, granola and ginger cookies, which have extended shelf lives.
Pastry chefs and cake decorators arrive from 5 a.m. to 6 a.m., followed by day bakers who produce cakes, laminate doughs and make up breakfast pastries. Clean-up personnel work throughout the day, and the store closes at 6 p.m.
The night baking crew arrives at 7 p.m. to feed starters and levain pre-ferments stored in a retarder, begin mixing bread doughs and proofing breakfast pastries. Baking begins at about 9 p.m. and concludes between 5 a.m. and 5:30 a.m., when the bakers again feed the starters and preferments. The packing crew starts between 2 a.m. and 3 a.m. Delivery trucks leave at 6 a.m. with wholesale orders.
Bread production required greater efficiency, Tim says. After introducing the artisan products, “we found we were using several different flours, including five different white flours,” he explains. “We spent too much time keeping track of their use and inventories.” The solution was a single, basic white flour (12.8 percent protein).
The flour works well for crusty French loaves; to produce dense breads, bakers avoid adding ingredients, such as vital wheat gluten. “Instead, we manipulate the doughs and, when appropriate, use small amounts of ascorbic acid,” Tim says. “All of this made production much easier without sacrificing quality.”
The bakers use the winter months to refine production procedures, which includes attending classes and visiting artisan bakeries. Such activity is part of Bit of Swiss’s strategy to invest in staff training. Employees attend culinary schools for advanced classes in baking and pastry production. Others have worked in bakeries across the nation and attended other schools, including the former National Baking Center.
“I’ve found that while an employee learns a lot at a school, two employees attending together get more from the experience because they share their knowledge with one another,” Tim says.
Quality commands prices
Bit of Swiss customers willingly pay for high-quality bakery foods that are priced fairly for them and for the bakery, he says. A typical 8-in. dessert cake, such as the top-selling Bavarian cream cake, retails for $20.50.
“Sure chain stores sell dessert cakes at cheaper prices, but we make our cakes from scratch, using fresh ingredients like eggs, cream and top-quality chocolate,” Tim says, adding that when ingredient prices climb “we have to pass along our costs.”
Labor costs (40 to 41 percent of sales), however, are a greater concern, he says, compared with ingredient costs (22 percent of sales) because production is nearly all scratch. “This is part of putting money back into the business to ensure that we keep good employees and grow,” Tim explains.
Growth depends also on promoting the bakery and its brand, he continues. Each year, Bit of Swiss spends about 2.7 percent of sales on marketing and promotional activities. Some include donating breakfast pastries for volunteer workers and exhibitors each year at the Krasl Art Fair, ranked as one of the nation’s top 25 juried events in nearby St. Joseph, Mich.
The bakery also donates to local schools and United Way fund-raising events, such as golf outings and dinners. “All charitable organizations are deserving of donations, but we must draw a line,” Tim says. In lieu of donating product, the bakery gives credit card-style gift cards.
Promotion includes two billboards, located 50 yards apart, along the eastbound lanes of Interstate 94 approaching Stevensville. Beginning three years ago, the bakery had five to six billboards during Christmas to promote seasonal products, such as stollen. “Holiday traffic seemed to pick up. So we decided to have two billboards year-round,” he says.
Both are simple with a photograph and minimal text. One of the current billboards features Tim’s hands holding a loaf of artisan bread and text: “Bit of Swiss Bakery, Stevensville, MI. Celebrating 45 sweet years.”
“Travelers must be able to see and read a billboard message in a few seconds,” Tim observes. The second billboard catches the attention of travelers who only glanced at the first billboard but were curious.
The goal, he adds, is to build brand awareness within the local community as well as with tourists. “Residents regularly say they see them, and travelers have mentioned that they saw them.”
Visitors to Bit of Swiss’s website can register to receive emails with news about the bakery and coupons for seasonal and other products. For example, last January an email included a coupon good for 45 percent off the price of all bread items in recognition of the bakery’s 45th anniversary this year. About 40 percent of those customers purchased additional items. “We send coupons infrequently, however, because we do not want email-driven sales to become coupon-dependent,” Tim says. “When customers receive a coupon, we want them to regard it as special.”
To pursue promotional and marketing efforts, Tim has increasingly stepped away from the bench the last couple of years. The business is growing, and “I must give up some things in order to keep good people,” he says. “We are a hands-on bakery. The department heads have been with us a long time, are well-respected and have high quality standards. I have found it is better to manage through a few people than to micro-manage everyone. And, since I’ve removed myself more from production, our business has become more profitable.”
Still, Tim maintains an interest in production, notably looking for opportunities to enhance productivity. Currently, he and his crew are examining options to improve laminated dough products. Volume has exceeded capacity of the reversible sheeter and hand makeup, he says, and likely will require more automated equipment.
Purchasing the equipment would be yet another example of the Foleys’ belief in investing in their business. “You have to do it if you expect to be successful,” Tim says.