Sweeten bakery sales with ancillary products

You already have customers craving your cakes and cookies, pining for your pies and drooling over your Danish. But a growing number of operators around the country are giving an extra boost to their bottom line by adding non-baked products, such as candies, chocolates, candy-coated popcorns and other gifts, to complement their retail mix.

Chocolates and other candies seem to be the most popular add-ons, whether purchased in bulk from outside suppliers or made in house. Upscale Frederick's Pastries, with stores in Amherst and Bedford, N.H., for example, offers hand-made confections from local and international artisan chocolatiers. The bakery sells the chocolates by the piece from an 8-ft.-long display case and packages them under the Frederick's name in various size boxes for gift giving as well as in small grab-and-go bags.

Although the chocolates have become “a solid part of our business,” according to proprietor Susan Lozier Robert, even more popular are the bakery's exclusive, house-made diamond-shaped clusters of pecans, butter, clover honey, brown sugar and heavy cream. Frederick's offers its signature Pecan Diamonds in four gift box sizes and includes the candies on its pastry trays.

Jenna Turner says that in addition to European-style bakery products, her Susina Bakery & Café in Los Angeles is known for the extensive selection of globally sourced gourmet chocolate bars displayed in baskets in front of the pastry case. Inside the case are elegant, yet easy-to-make, chocolate-dipped fruits. On shelves and countertops throughout the bakery are colorful bags of assorted hard and chocolate candies that Turner buys in bulk and re-packages in ribbon-tied cello bags bearing the Susina logo.

Home-oriented retail items, such as cake plates, pedestals and servers; salt and pepper shakers; loose-leaf imported teas and brewing pots and other accessories, add to the ambience of the bakery, while offering customers a one-stop-gift-shopping option. “A customer looking for a housewarming gift, for example, can buy a cake and give it on a beautiful cake plate,” she notes.

“Although the candies and gift items don't account for a huge percentage of our total sales-maybe 5 percent to 10 percent-they're a nice convenience that our customers really appreciate,” she adds.

For Chicago's Sarah Levy, the chocolates came before the pastries. In fact, they even came before her retail store, which she opened in 2005 after running a wholesale candy business out of her mother's kitchen. Now, the main kitchen at her Sarah's Pastries and Candies flagship store in the Lincoln Park neighborhood produces pastries and chocolates, including royaltines (feuilletine wafer pieces and caramelized almonds), molasses caramel, almond chocolate toffee and dried cherry rocky road, for her three shops and area wholesale accounts.

Customers can watch the candies being made, and frequent sampling also increases customer awareness of the products. Total sales are split evenly between pastries and chocolates.

“By selling both, we avoid putting all of our eggs in one basket,” Levy says. “The combination allows us to balance our sales year-round.”

In her retail stores, Levy has two showcases, one for the chocolate candies, with morning pastries displayed on the top; the other case is filled with cakes. One type of product often fuels sales of the others, she points out.

“When customers come for the chocolates, they'll often buy pastries and vice versa,” Levy says.

The bakery sells its chocolates by the piece or by the pound. Levy also packages them in 3 1/2-oz. bags to encourage impulse sales. For her gift baskets, she prefers to package the candy in clear-lidded boxes for maximum visual impact.

Levy also offers customized chocolates, using transfer sheets to print a company logo onto each piece. Companies frequently give the candies as corporate gifts and at seminars and holiday parties.

Candies and more

At his two eponymous pastry shops (the second location opened in January) in Muncie, Ind., Michael Concannon prominently features various flavors of house-made chocolates, hard candies and popcorn under the Concannon's name and bags of coffee beans under his Main Street Coffee brand. He introduced these product lines in 2005 to add diversity to his menu with items that were less perishable than pastries.

Now, between the two stores, candy and popcorn account for $1 million in sales, about 20 percent of total sales. Concannon's makes about 80 percent of its own candies. Only sugar-free items are purchased from a small outside producer.

Both the candies and popcorn are produced in a 5,000-sq.-ft., climate-controlled facility in downtown Muncie. Until recently, the bakery out-sourced its old-fashioned hard candies. But the addition of a copper kettle and marble slab now make it possible to produce these in-house as well. Requiring only about 40 cents worth of sugar, corn syrup and water to produce, a 6-oz. bag of hard candies sells for $7.99.

Concannon plans to install more candy-making equipment, including two new enrobers (used to coat cookies and popcorn), a cooling tunnel and additional marble tables, as well as expand the packaging area.

Holidays are prime selling season for the non-baked products. For Valentine's Day, Concannon's two locations sold 150 flats of chocolate-covered strawberries. And, customers purchased about $150,000 worth of coated popcorn per month during the three months before Christmas.

Of the 100 varieties of coated popcorn available (caramel and chocolate-enrobed caramel are year-round best sellers), the bakery carries 20 flavors at any given time. Although making the coated popcorn is a labor-intensive process, it can be made in batches of 1,000 gallons per day and, once packaged, has a shelf life of several months.

A quartet of 4-ft.-long climate-controlled service cases filled with candy sit in line with the bakery's pastry cases at the downtown bakery with two candy-centric cases at the second location. Chocolates are sold by the pound from the case and by 1-oz., 1/2-lb. and 1-lb. sampler packages. While the shelf life of Concannon's chocolates is about three months, they are made every day to keep up with customer demand. Counting flavor and packaging varieties, the bakery stocks close to 50 SKUs of chocolates, including the popular chocolate-covered pretzels.

The coated popcorn is packaged in 4-oz. to 16-oz. bags and 1-gal. to 6-gal. tubs and tins colorfully decorated with seasonal designs or the names and logos of college and professional sports teams. All are sold under the Concannon's brand.

“Muncie residents are really into sports and, in addition to buying the popcorn for themselves, they like to send the team-themed tins to friends and family members across the country,” Concannon says.

He notes that the candy- and popcorn-packed cases, shelves and tables give the bakery an extra “wow” factor. With more than 1,000 customers per day coming through the stores, customers who are waiting in line to buy cakes and other pastries have plenty of opportunity to sample the sweets. Afternoons are especially good for candy sales, Concannon says, because customers are not in so much of a hurry and can take the time to browse the candy offerings.

Gift items

Gift baskets also are big business for bakeries. Susina Bakery's Turner creates customized $30 to $300 product arrangements in wicker baskets, aluminum tins and retro vinyl lunchboxes, each focusing on particular products (e.g. cookies or chocolate), recipients (e.g. friend or office), meal occasion (e.g. brunch or tea) or holiday. In addition to holiday gifts, corporate accounts order thank you or congratulatory baskets year-round.

Popularity of gift baskets is not limited to Los Angeles. Last December, Concannon's sold 1,500 gift baskets, both pre-made and customized, ranging in price from $18 to $80 each, from its downtown store alone.

Outsourcing confections for gift baskets and grab-and-go snacking can help expand product variety without adding labor time and costs. Chocolate Chocolate Chocolate Co. in St. Louis, for example, offers 14 items with suggested retail prices of $10 or less and at least 40 regular product SKUs plus 10 to 12 more for holidays.

According to owner Dan Abel, Jr., the products have a 50 percent profit margin and a shelf life ranging from three to five months. Among the most popular are 8-oz. cello bags of milk, dark and white chocolate-covered mini-pretzels; 4-oz. bags of non-pareils; six-piece window boxes of truffles and six-pack bags of chocolate-dipped licorice.

Decorated and non-decorated novelty treats spur brisk sales during holidays and every day. Chocolate Chocolate Chocolate offers two-packs of chocolate-covered graham crackers and one- and two-packs of enrobed Oreo cookies topped with colorful sugar decorations ranging from zoo and jungle animals to spring flowers to Valentine's Day conversation hearts to Santas and Christmas trees. At Easter, the company coats Marshmallow Peeps® with chocolate.

Outsourcing chocolate

Sherm Edwards Candies in Trafford, Pa. wholesales chocolates, including a variety of cordial fruits in unusual varieties such as blackberry, raspberry, blueberry and strawberry; chocolate meltaways and “babycakes” (chocolate-covered Ritz cracker and peanut butter sandwiches), for retailers to sell from service cases under their own brand. Some retail customers sell the products for double or triple their wholesale prices, says Sherm Edwards' Sales Manager Richard Filler.

Norman Love of Ft. Myers, Fla. positions his Norman Love Confections as “ultra-premium, hand-made” products for retailers who want to raise the bar for discerning customers. His chocolates have specific storage temperature and humidity requirements, but the extra care pays off in terms of visual and flavor impact, he says. Because they have no preservatives, the candies have a shelf life of about three months.

“Although some of our partners sell our chocolates pre-boxed, they generally do much better when they are sold through the service case,” Love says. “It's a whole experience for the customer to see the artistic beauty of the chocolates, choose each one and watch it being carefully hand-packaged like little gems.”

In addition to a variety of point-of-purchase options, such as posters, countertop signage and beauty shots, the company teaches bakers how to organize, store, inventory, rotate and merchandise the products for maximum sales. Love generally wholesales his chocolates for 55 cents apiece and has retail partners who sell them for $1.50 to $3.00 each.

While chocolates, gifts or candies may not bring large amounts of additional revenue, they can help you differentiate your bakery and distinguish your brand. The additional products also give customers another reason to shop your bakery.