Owners Mark and Rhonda Atwood channeled more than 30 years of business acumen into their dream bakery. They created a retail experience that helped double sales in the first six months.
|(left) Jennifer Atwood-Ruiz is one of four Certified Decorators at the bakery. (above) Mark and Rhonda Atwood (seated) believe in keeping staff motivated by sending employees to industry conventions and professional classes.|
|Brick dividers guide customers into the bakery with showcases in front, impulse items to the right and |
demand products to the left.
The days of operating a very successful full-line retail bakery based primarily on selling top quality bakery products have passed. Consumers expect more when they shop, which Mark and Rhonda Atwood understand. In 2004, the couple relocated their then-27-year-old business in Alexandria, La., to their dream bakery. More than bricks and mortar, the building became the embodiment of 25 years of research to design and construct the optimum retail bakery for their market.
They gathered ideas largely when traveling for the Retail Bakers of America. Mark was a board member for several years and is a former president; he currently is chairman of the Retail Baking Industry Foundation. While at RBA functions, they visited bakeries. “We identified five things we liked and five things we didn’t like about each,” Rhonda recalls. “The information and photos grew to fill a file drawer.”
The goal in designing the bakery was to offer “a shopping experience,” Mark says. “That’s what we saw in successful bakeries in large communities. But, we believed that if customers could have an experience, we could generate good income even in a town of 50,000. We’ve proven that.”
Indeed. Within six months of opening, the new bakery’s sales doubled from those at the former facility, located only two blocks away. Growth continued last year as sales increased by 12 percent from 2005 to $1.4 million.
The Atwoods began collecting ideas soon after opening a cake shop with Mark’s mother, Joy, in nearby Pineville. The couple had met a few years earlier during college, married and had their first of two children when they went into business.
In 1980, they purchased a 3,200-sq.-ft. bakery (later adding 1,200 sq. ft.) in a commercial/residential neighborhood of Alexandria, where they operated until 2004. “The first thing we did was ‘fire’ our customers,” Mark says. “The bakery had focused largely on donuts, its retail prices were too low, and it was losing money.”
Having experienced the profit potential of decorated cakes, the Atwoods wanted to sell cakes. “So, we raised our prices. Many customers left, but they weren’t paying the bills,” he says.
The couple began applying what they call the “17 percent rule,” which postulates that 17 percent of consumers buy for quality, image and personal gratification: They care little about price, Mark explains. Low prices drive another 17 percent; the remaining consumers are a mixed bag.
Designing new location
Despite having lost customers, sales almost doubled within a year, “largely because our quality was so superior,” Mark says. “Since 1980, we have geared our business around that top 17 percent, which is not always the wealthiest.”
For the new location, the Atwoods had other bakery owners at RBA meetings
critique the floor plan. By 2003, it was time to put their plans into action. The couple already had purchased a 4,800-sq.-ft. building on a 1-acre lot along a busy traffic route, which was far superior to the bakery’s original location.
They retained a contractor for a 5,000-sq.-ft. addition, which included a 2,400-sq.-ft. mezzanine for storage. “We’re off the beaten path for bakery distributors and need to buy in larger quantities,” Mark explains.
A contractor’s quote in the mid 1990s estimated the building renovation and addition would total about $1 million. However, Mark handled the renovation himself. The actual cost, including land, equipment purchases and indebtedness on the building, totaled $700,000, he says. About $200,000 of the total went toward buying the additional equipment. “So, we saved at least $500,000 by doing the work ourselves,” he adds.
After completion of the addition’s shell, Mark took off three months from the bakery and turned to renovating the original building and finishing the addition with his father and a hired worker. At the bakery, Rhonda managed the sales area and decorating department; Mark’s brother, Ed, head baker, directed production.
Atwood and his crew finished 90 percent of the interior, including pulling all communications lines. A contractor handled a few of the interior projects, including masonry work.
The results are impressive, reflecting the thorough planning. “We wanted to create an extension of consumers’ living rooms in which our customers would be encouraged to remain a while to enjoy a lunch, or dessert and beverage, as well as shop,” Mark explains.
Creating an experience
He and Rhonda addressed every detail. For example, they learned about how color affects consumers. Red and yellow, used by McDonald’s, spur action, while blue, used in doctors’ offices, creates a calming environment. Warm earth tones fit into the Atwoods’ plan to encourage customers to linger.
With this in mind, they chose appropriate chairs for on-site dining. “Foodservice seating has different levels of comfort–short-term to turn tables and longer term to encourage longer stays,” Rhonda observes. “We chose a style comfortable for at least one hour.”
They also learned that customers tend to enter a store and turn to the right. Applying this principle, Mark installed 10-ft.-long by 3-ft.-high brick room dividers at both sides of the entrance doors. Even the brick wall’s mortar did not escape Mark’s attention. To replicate naturally occurring grit in 18th century European mortar, Mark selected stone aggregate for his mason to add to his mix. After the mason completed troweling the joints, Mark used a brush and water to expose the stone bits. The dividers lead customers toward the 24 ft. of service cases; wrought iron fencing spans the dividers’ tops. “The dividers cause customers to focus ahead to the cases,” he notes. The ends of the cases curve slightly toward the store entrance.
Creatures of habit
After viewing the center cases, customers, as expected, mostly turn right, Mark says. Those cases and counters offer impulse items, such as candy, gelato, gourmet loose tea, espresso and brewed coffee; adjacent is seating for 48 deli customers. To the left, customers find demand items, notably cake ordering and pickup, and wedding cake planning. The area also features self-service displays of gift wares, many of which tie into gift sales.
Outside, details in the building’s facade, such as custom-made arched wood-framed windows and doors, project a European influence. Each window is glazed with 18th century-style beaded panes; unseen behind the windows, low-emittance glass conserves energy and helps ward off summer’s searing heat.
The “shopping experience” actually begins when a customer telephones the bakery. All sales employees learn proper telephone etiquette; such training is part of the bakery’s formal sales training program.
If it is necessary to place a customer on hold, callers are not subjected to mind-numbing music or banter from a local radio station. Instead, a recording of Mark’s deep, baritone voice vividly describes a bakery or deli product in mouth-watering detail.
“Most retailers play a local radio station; but why run free advertisements for other companies?” Mark asks.
“For about $250, you can buy a recording device that will enable you to tell your customers about your bakery and your products.”
Expanded product line
Beyond the aesthetic touches, a big plus with the new location was having gained more sales space, allowing the Atwoods to add some 100 products. Customers may select from as many as 350 different bakery and deli items, plus scores of gift wares. An expanded pastry line and new dessert cake varieties highlight the center portion of the 24 ft. of service cases.
Three signature desserts especially stand out:
• Chocolate killer mousse torte: Pastry chefs use authentic chocolate mousse. “Few bakeries and restaurants make a true, scratch non-gelatin European mousse,” Mark says. “It requires 24 hours to congeal.” An 8-in. torte sells for $28.75.
• Chai tea cup: Preparation begins with a hand-decorated white chocolate circle for a saucer. Pastry chefs make the cup by coating a half-sphere mould with chocolate. After the chocolate sets, they remove the mould and pipe on a chocolate handle, fill with chai tea mousse, top with whipped cream, garnish with powdered cocoa and insert a chocolate stirrer. The price is $3.25.
• Peach bun. Bakers bake two 1-oz. sweet dough buns individually on a sheet pan. Pastry chefs scoop the insides from the bottoms of the buns and spray the tops with red airbrush color. After the color dries, each bun cavity is filled with French cream, a scratch-made vanilla cream pudding that is folded into fresh, heavy whipping cream. Fresh chopped peaches are blended into the French cream and piped into each bun. The two buns are pressed together to form the peach. The crew dips the peach in apricot glaze, sprinkles it with coarse sugar and adds a green buttercream leaf on top. Each bun retails for $3.25.
The expanded sales area also allowed the bakery to offer some previously seasonal products year-round. For example, the bakery previously could only make pies to order, but now offers them daily. In addition, the display includes pies and cakes by the slice. Similarly, candy previously was available only for Christmas; a new dedicated showcase allows year-round sales.
Mark’s attention to detail extended to designing and equipping the production area. An overall goal was to install equipment and develop procedures to generate the volume needed “without killing ourselves,” he says.
This includes making up, baking or decorating large batches for the freezer, rather than baking for the display cases. Each department has its own refrigerator and freezer, instead of competing for space in one central refrigerator and freezer.
“This helps keeps an even flow of production, keeps us from going crazy and allows us to work sane hours,” Mark notes. All production personnel work days, and the bakery is closed Sunday and Monday. “We could make more sales by being open Sunday, but this way, we have lives outside the bakery.”
A new wire-cut depositor has added efficiency and provided flexibility to offer more cookie varieties. Bakers also use it to deposit divinity candy; the candy department produces all other candy varieties.
Candy production occurs in a separate climate-controlled room, equipped with marble work surfaces and a tempering machine. Production occurs for two to three days to produce about a month’s inventory.
Also new is an infrared oven and glazer to heat and finish thawed, pre-fried donuts. “We don’t push donuts,” Mark says. “Every convenience store and fast-food restaurant sells donuts. But, we need to have them. So, we buy good quality frozen product and finish it. We still make a little money on them.”
By not installing a fryer, the Atwoods saved $150,000 on fire safety construction, and fryer installation and venting costs, plus avoided higher insurance premiums.
To further enhance efficiency, they opted to use frozen dough for two other low-volume products: croissants and scones. “Cakes and desserts are our main products, but we still must have breakfast items,” Mark says, acknowledging that the decision to use frozen product was not difficult because quality has improved greatly.
Baking for the freezer, especially for Thanksgiving and Christmas, also has enabled the bakery to maintain, even improve, product quality. Each Christmas, the bakery sells about 1,000 deep-dish pecan pies ($16 each), prepared in 9-in. cake pans. Because pressing the crusts and laying pecan halves on them is labor-intensive, bakers prepare the crusts and freeze them before fall. “That’s $16,000 in crusts waiting to be filled and baked,” Mark observes.
The bakers make fruit cakes at least eight months before Christmas. “I like aged fruit cake, which we get by refrigerating the cakes for three to four weeks–that also enhances the moisture content–then freeze them,” he explains.
These tactics and others have allowed the bakery to hold labor costs to an average 35 percent of sales. Such productivity does not go unrewarded.
When productivity increases and the labor percentage decreases, employees receive the difference in bonuses. For example, the bakery distributed $5,000 in bonuses in February.
The funds are divided based on hours worked per employee. Thus, the head baker earns no more bonus than does the cleanup person. “This system rewards the people who really create the extra profit,” Mark says.
When the labor percentage exceeds 35 percent, say 37 percent, the 2 percent deficit is deducted from the next bonus. By year-end, the bonus account must net out at zero, he adds.
The Atwoods’ also strive to inspire and encourage their employees to improve their skills. One example is Kari Tyler, a pastry chef, who joined the bakery as a salesperson and subsequently learned to ice, then decorate cakes. In 2004, she moved into the pastry and candy department, and in April, attended a 6-day pastry course at the Culinary Institute of America, Hyde Park, N.Y., paid by the Atwoods.
The couple also expose their employees to educational opportunities at industry conventions. Each year, several employees travel to local and regional bakery conventions; every two years, the Atwoods take four to five staff members to national RBA conventions. “These events give them first-hand experience to learn about new things,” Rhonda says.
Mark, Rhonda, their daughter Jennifer and head decorator Karen Blais are RBA Certified Decorators; Mark and his brother, Ed, are Certified Master Bakers, the only two in Louisiana. Mark also is one of two professionals in the industry to be both a certified decorator as well as a certified master baker. Having certified master bakers and decorators on staff has opened marketing opportunities.
The Atwoods have promoted their certified staff to the local news media to convey that the bakery is an official source for information about baking and pastry. As a result, one local television station asks Mark to appear on its morning program to demonstrate products five to six times a year, usually three to four days before a holiday.
“When the trans-fat issue broke, the media called me, rather than use a national Associated Press report,” he says. “Certification gives us credibility with the media, resulting in great publicity and in turn, credibility among our customers.”
Building a brand
Whether appearing as a guest on radio or television, or creating a commercial, “we seek to develop top-of-mind awareness of our bakery, not to necessarily sell a specific product,” he explains. “The most boring radio spots are lists of available products. We use descriptive adjectives to build images.” Rhonda writes the copy; Mark records it for airing. For example:
“Chocolate killer mousse. The name sounds sinful and decadent. We start with a layer of double chocolate fudge cake, then add a layer of mousse made with heavy whipping cream, fresh eggs, butter and Belgium chocolate. We take another layer of cake and mousse. We cover that with fudge and crown it with 16 wedges of chocolate.”
The latest marketing venture is the bakery’s first product catalog, Atwood Bakery’s 2006-2007 Special Memories Catalog. Printed on coated paper stock, the 5½- by 8½-in. brochure introduces the Atwoods and a brief history of the bakery. It features 16 pages of four-color photos with descriptions of nearly every product category offered, for personal and business gift-giving, many available for mail order. The bakery’s Web site includes similar information and photos and focuses on products for online and mail order sales.
The Atwoods and their managers direct every effort–from efficiently producing the best possible products to reaching out to gain to new customers to providing first-class service–to build the bakery’s reputation as a must-go shopping experience.
Mark notes that in the South, more than most parts of the country, the need to be a destination location is critical. “We don’t have a dense population, and consumers don’t shop for food as often as in other regions,” he explains. “Stopping at a retail bakery requires an extra special trip.
“This is why we created our shopping experience. Consumers walk in and feel a desire to shop. We’ve adapted to what consumers expect. And, that’s what we will continue to do.”