by Edward M. Lee, editor emeritus
The Concannons contracted with a national firm to supply the bakery with a variety of logo tins, including collegiate and professional teams.
Concannon’s installed four high volume, climate-controlled candy cases during a recent expansion.
The bakery features a separate candy production area with an automated chocolate enrober.
Michael T. Concannon (left) recently added cookies to the line offered to his convenience store clients. The stores sold 2,500 dozen tea cookies in a recent week.
Head Baker Joe Grilliot and his staff produce 95% of Concannon’s Pastry Shop’s products from scratch.
Concannon’s at a glance
Location: Muncie, Ind.
Web site: concannonspastryshop.com
Management: Michael T. and Mary Ann Concannon, owners; Cindi Harrold, general manager; Joe Grilliot, head baker; Vickie Harison, manager, sales staff; Jessica Anthony, manager, candy production; LaSonja White, manager, decorating production
number of full-/part-time employees: 65 to 75
Bakery size: 10,000 sq. ft.
Product line: Full line of donuts, cookies, pies, decorated cakes, pastries, fine chocolates and gourmet popcorn, bread, wedding cakes and dessert cakes
Customer base: 75 percent retail, 25 percent wholesale
Production methods: 95 percent scratch
Major equipment: 20-, 60-, 80-qt. vertical mixers; semi-automatic cookie depositor; semi-automatic divider/rounder; pie shell sheeter; sheeter/moulder; chocolate tempering machine; steam-jacketed kettle; two proofers; two revolving tray ovens; four fryers; automated mini donut machine; industrial popcorn popper; two popcorn coating machines; semi-automatic chocolate enrober; computerized decorating machine; walk-in refrigerators/freezers; two bread slicers
Plans: Grow overall business with emphasis on candy and popcorn, gain new customers and increase existing customer purchases
Bakery supply distributors: Dawn Food Products, BakeMark, B. H. Gardner Bakery Supply
Ask residents of Muncie, Ind., where to go for donuts, and most likely they will answer “Concannon’s.” Since 1959, the Concannon family, owners of Concannon’s Pastry Shop, has cultivated and earned a respected reputation for turning out melt-in-your mouth, jumbo 3.5-oz. yeast-raised donuts, along with a full line of decorated cakes, cookies, pies and other pastries. The bakery is now managed by the third generation of Concannons. Sales have tripled since 1998, and the owners have invested nearly $l million in three expansion and remodeling projects. Beginning in 2002, capital improvements added sales and production space, increasing the bakery’s size to about 10,000 sq. ft. from 4,000 sq. ft.
However, shifts in the local economy and changes in consumer buying patterns have steered husband and wife owners, Michael T. and Mary Ann Concannon, to diversify beyond their traditional bakery foods and retail store to broaden their customer base. Fine chocolate candy, gourmet popcorn and branded bakery foods sold in convenience stores are adding fuel to the bakery’s current growth.
Michael’s late grandfather, James, and late father, J. Michael, founded Concannon’s in 1959.
The eldest Concannon retired in 1976, and J. Michael assumed the business. Michael T. took the reins with Mary Ann in 1998, and their teenage children, Michelle, Marc and Mitchell, also work part-time in the bakery.
Through the early 1990s, the bakery benefited from Muncie’s diverse economy, a blend of agriculture and manufacturing.
During the 1990-1991 recession, Muncie lost some 15,000 factory jobs. Growth of the medical and service sectors and Ball State University have filled much of the employment void, but most positions do not carry the higher pay scales and benefits associated with manufacturing.
“Despite this decline in jobs and income, we’ve managed to see a slight increase in our customer counts,” Michael says. He adds that much of the gain has occurred in afternoon business, which has increased 80 percent largely because of a shift to a service economy.
Differentiating from in-stores
To grow their business significantly, the couple says they had to look beyond the walls of their bakery. “We saw the mass merchandisers, like Wal-Mart and Meijer, opening here,” he says. “We knew our quality was much better, but we wanted to stand out as being different with products that consumers couldn’t buy at those stores.”
The Concannons noted that consumers increasingly were attracted to fine chocolates, but Midwesterners in smaller markets had few sources, especially among retail bakeries. “The market was wide open,” Michael recalls.
In early 2005, a former baker with a candy business in an adjacent county helped the Concannons get started in candy, as did a chocolate supplier. They attended a candy trade show, where they learned about production techniques and merchandising strategies. Michael later attended chocolate production classes at the chocolate manufacturer’s training school.
After installing a chocolate tempering machine, he trained a couple of employees, who began hand-dipping and moulding fine candies, eventually creating a line that includes truffles, turtles, crèmes and other moulded chocolates, toffee and enrobed pretzels.
“You can offer any number of 100 or so different chocolate types,” Michael says. “Midwesterners like milk chocolate, but there are about 20 different types of milk chocolate. We prepare ours with a slight caramel flavor. And, Midwesterners really go for chocolate with nuts, especially pecans, and crèmes; and the bigger, the better.”
Dark chocolate also has distinct differences, ranging from bitter Europeanstyle varieties to mild dark chocolate favored more in the Midwest, he adds. Though not as popular as milk chocolate, dark varieties are posting sales gains, Michael notes. “I think it’s because people have heard that dark chocolate is good for the heart.”
Candy takes off
Concannon’s introduced the candy line in October 2005; the timing fit perfectly with holiday gift giving. After Thanksgiving, corporate purchases for holiday gifts began to pour in, he recalls. “We saw orders of 200 2-lb. boxes and hundreds of gift baskets.”
For Valentine’s Day, the bakery used radio spots to promote chocolate-covered strawberries, a move no other Muncie retailer had done. The results: Concannon’s sold 500 lbs. of product. “Best of all, many people who bought them heard the commercials and had never been in our bakery. They weren’t donut customers, but they became candy customers,” Mary Ann notes.
She adds that they knew the candy business would be heavily seasonal. “But, we were surprised. We often did $200 to $300 a day in the middle of summer.”
A three- to seven-member candy production crew currently prepares up to 250 to 300 lbs. of chocolates and other candy daily during the holiday season in a climate-controlled room; Michael expects non-holiday daily production to continue to increase and that more automation will be needed. The candy crew uses two chocolate tempering machines and a semi-automatic enrober, as well as hand deposits several different moulded chocolates. Plans include installing a cooling tunnel, which will improve efficiency for chocolate making.
Concannon’s produces about 60 percent of the candy sold. “We learned that no retailer in the candy production business makes all of their own candy,” Michael says, “but makes the large volume items and their specialty products.” Some of the bakery’s purchased items include sugar-free and hard candies.
Popping up sales
In a further stretch beyond traditional bakery foods, Concannon’s last year began offering gourmet popcorn, which like fine chocolates, was hard to find in the Muncie area.
Michael contracted with a supplier to outfit the shop with the proper equipment. The candy crew produces popcorn in an industrial-size popper and uses two dedicated popcorn coating machines to create multiple flavors. The bakery offers up to 20 flavors at a time, among them caramel corn, chocolate-enrobed caramel corn, and caramelcoated white chocolate popcorn. More than 100 varieties are available in total. Popcorn volume reached 5,000 gallons during last winter’s holidays and since has averaged 500 gallons a week.
Making candy offered a complementary, side benefit for popcorn and bakery foods. “We have added more products because we can enrobe popcorn with chocolate, coat chocolate with popcorn and enrobe cookies with chocolate,” Michael says.
Concannon’s offers popcorn in 2-oz. to 16-oz. bags and tubs and 1-gal. to 6-gal. decorative tins. All types of containers carry Concannon’s logo and nutrition labels. Michael purchased a computer program that enabled him to develop the initial labels and create new labels for additional products. “It has a data base with the correct numbers, so we don’t have to have each product analyzed,”
Tubs sell for $3.49 each; tins for $11 to $40 each. The bakery sells at least $100 in popcorn a day, Michael says.
During the last year, customers bought nearly 4,000 to 5,000 tins, he adds. Sales took off, not only because of the popcorn’s high quality and available flavors, but because the tins, emblazoned with the names and logos of school and professional sports teams, offer gift-giving opportunities.
Because Muncie has residents from across the country and customers regularly purchase gift tins to send to out of state, the bakery’s inventory includes tins for nearly every professional football team and many collegiate teams. “Whoever’s winning generally drives the top-selling tin,” Mary Ann notes.
Looking ahead, he anticipates candy and popcorn sales to account for 25 percent to 35 percent of total retail bakery sales.
Mary Ann attributes much of candy and popcorn’s success to the store’s large, eye-catching displays. In the summer of 2005, the Concannons added 1,800 sq. ft. to the bakery, largely to enhance the presentation of candy and popcorn.
Four, 4-ft. service candy cases sit in line with the bakery service cases. Customers cannot miss seeing the variety of chocolates and other candies in the high-volume, climate-controlled displays. In front of the cases, colorful table and wall displays offer packaged candy, tea, coffee, small non-food gifts and tubs and tins of popcorn.
Mary Ann explains that the displays, along with self-service units for bread, cookies, pies, angel food cake, cupcakes and all-occasion cakes, are designed, in large part, to capture impulse sales.
“While customers wait in line to be served, they will see a cake or cupcakes for dessert, for example. This is especially true during the afternoon, when customers are not in so much of a hurry,” she explains.
Concannon’s also has pursued aggressive marketing to attract new customers to buy candy and popcorn. Last Thanksgiving through Christmas, the bakery operated a kiosk in a local shopping mall to promote the bakery’s new candy and popcorn. Employees sampled thousands of wrapped, single candies and small packages of popcorn. The kiosk attracted up to 300 customers a day.
“People who sampled the products either returned to the kiosk to purchase product or traveled to the bakery,” Michael says. “Many had never visited the bakery or hadn’t heard of it. The kiosk provided really good exposure.”
This year, the bakery will be temporarily occupying a store front in the mall for six weeks to maximize holiday sales.
Reach beyond local community
Late this summer, the bakery introduced a Web site largely to help sales of candy and popcorn. “We wanted to introduce out-of-town people interested in purchasing candy and popcorn to the bakery–its history, the people, products, and shipping and contact information, and so on,” Michael says. But, the site will not be used to take orders. “We want to maintain a personal touch, even if it’s with a phone call.”
He adds that offering coupons in print media–newspapers, circulars and the Yellow Pages–has been helpful to increase business among existing customers. “They redeem coupons and often buy additional products. This is important for a smaller community like ours. Now we plan to do the same thing with coupons on our web site.”
Muncie area residents, in addition to comprising a small metropolitan market, also are spread across four counties. The situation presents a challenge to Concannon’s to convince residents to make a special stop to patronize the bakery.
“People in this community like donuts,” Mary Ann observes, “and they may as well buy them from our bakery.” Concannon’s took advantage of an opportunity in 1997 to expand its customer base, when several convenience stores asked the bakery to supply fresh donuts.
Accepting the challenge, Michael approached wholesaling cautiously, “not biting off more than we could chew,” he says. Gradually adding customers since then, the bakery currently sells 4,500 donuts daily to convenience stores in a four-county area. Four trucks begin rolling at 2:30 a.m. daily to drop ship product at 50 stops within 30 miles of the bakery.
Established customers receive self-service cases, bags and tissues for the price of the donuts. The cases and bags prominently display Concannon’s name and logo.
“We explain to the owners that they can use our product, manage their displays correctly and make money, or try to make their own donuts and lose money,” Michael says. “Those that do it well make $5,000 to $10,000 a year from a 5-sq.-ft. display spot.”
Recently, the bakery added brownies, muffins and iced tea cookies to the offerings for convenience stores. The stores pay $1.35 for 12 cookies in a plastic clear dome pack, and then retail it for $1.99. During a recent week, the stores sold a combined 2,500 dozen tea cookies, he notes.
Noting wholesale’s growth, Mary Ann observes, “Doing this has helped us reach out to more customers without building another store. Besides the immediate financial gains, the bakery gets greater exposure, which encourages convenience store customers to shop the bakery.”
Michael advises any bakery operator interested in pursuing convenience store business “to begin small and grow steadily. It won’t work if you sink a lot of money into it in the beginning. And, most important, you have to monitor how your customers handle the product–it has your name on it.”
He credits much of the success to his drivers, who are responsible for setting the cases and watching to ensure that the stores maintain their displays. Since entering wholesaling to convenience stores, Michael has had to drop only two stores that did not handle product properly.
“All of this–the bakery, candy, popcorn and wholesale business–is about branding,” he says. “When you hear Big Mac, you think McDonald’s. In Muncie, when people hear donuts, we want them to think Concannon’s.”
He and Mary Ann now want to add candy and popcorn to the list.
|a sampling of prices|
|Glazed yeast-raised donut||$0.50|
Glazed cake donut
|Cinnamon nut roll, 5 ozs.||$0.58|
|Blueberry muffin, 5.33 ozs.||$0.79|
|Pecan Danish, individual||$0.67|
|Danish coffeecake, 1.95 lbs||$4.99|
|Chocolate chip cookie, 0.07 ozs.||$0.29|
|Tea cookies, 12 count||$1.85|
|Brownie, 4.5 ozs.||$0.42|
|Cherry pie, 9 ins.||$6.99|
|Decorated carrot cake, single layer, 8 ins.||$6.49|
|Custom-decorated cake, crème filled|
|Sourdough bread, 24 ozs.||$1.99|
|White bread, large loaf||$1.79|
|Dinner rolls, 12 count||$2.00|
|Chocolate cream and nut candies|
|Truffles, 16 ozs.||$15.95|