| Marketplace Foods & Drug at a glance Headquarters: Minot, N.D. Number of stores/in-store bakeries: 7/7 Store size: (Minot) 90,000 sq. ft.; bakery department, 6,500 sq. ft. Market served: Minot, N.D. into Bismarck and Canada Annual store sales: $30 million Product line: full line specializing in decorated cakes, which account for 30% of sales Key personnel titles: Leon Merck, store director; Ralph Towery, assistant store director; Jeff Berg, assistant store director; Leanne Klein, director of personnel; Bryon Schoenberg, bakery manager; Nyla Stromberg, cake department manager; Peggy Kallias, bakery merchandiser Primary production methods: frozen dough: breads/rolls, muffins, bagels, pies; scratch/mix: cakes, cookies, bars, some breads and muffins Company plans: purchase 10 stores in next five years and eventually become a 25-store chain covering North Dakota and Minnesota Bakery distributors: SuperValu, Best Brands, B&R, Foodservices of America |
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| Bakery Manager Bryon Schoenberg bakes cakes, which he then freezes for the cake department to pull as needed. |
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| Nyla Stromberg creates simple, yet creative, rolled fondant cakes for a value-added price point. |
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| "Bread trees," gingerbread houses and other merchandising displays are arranged by Peggy Kallias (left) and Bryon Schoenberg. |
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| The bakery is located on the right side of the store across the aisle from the cake department. |
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| The bakery positions sales staff to offer samples and package products for customers. |
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| Giant decorated, filled donuts are popular treats for Marketplace customers. |
Marketplace Foods & Drug in Minot, N.D., is no small-town grocer. This 90,000-sq.-ft. store features all the amenities of most supermarkets,but Marketplace offers much more. Its in-store bakery department, in particular, has managed to do what most others only attempt. It has become the area's neighborhood bakery, not because it is the only act in town, but because it is the best act in town.
Marketplace Foods, owned by Keith and Rich Johanneson and Kathy Dickson, operates seven supermarkets in North Dakota and Minnesota. The bakery in its Minot store, which includes a full-production bakery, cake decorating department and merchandising space, fills about 6,500 sq. ft..
"That's a lot to commit to a bakery," says Leon Merck, store director. Top management's commitment to perishables, including bakery, is one reason the in-store generates $1.5 million annually, contributing 5 percent to total store sales.
In 2000, Marketplace Foods completely remodeled and doubled the size of its Minot store. The remodel included separating the cake department from the bakery, creating more space for decorated cakes and opening up the bakery production area to customer view.
"We were very strong in bakery, but people didn't know we were making it here," Merck adds.
Beyond investing in the space for bakery, Marketplace invests in its people. The company inherited Nyla Stromberg, cake department manager, when it purchased the store from Albertson's in 1990. At that time, Stromberg was the sole cake decorator, although a talented one. Marketplace encouraged Stromberg to polish her skills by sending her to cake decorating courses at a community college and sponsoring her participation in bakery and cake decorating associations.
Today, the cake department, with Stromberg at the helm managing and training staff, is a subdepartment of the bakery and employs seven cake decorators. "Marketplace really stands out because they've invested in me to learn more," Stromberg says.
"I feel more ownership and commitment to my job," she adds.
The cake department is located across from the bakery, separated by a wide aisle of bakery merchandising. Stromberg and her team field all orders for decorated and wedding cakes, finish tortes and other desserts and merchandise cheesecakes, bars and other frozen-finished dessert items.
The advantage to separating the cake department, Stromberg says, is that a dedicated cake sales staff deals directly with customers.
"We can service our customers at our level, and we can go above and beyond by specializing for customers," she says.
Going the extra mile for customers helps the cake department generate 30 percent of bakery sales. One customer, for example, requested a Strawberry Shortcake™ cake. Rather than simply place an image on a typical iced cake, Stromberg designed a rolled fondant cake to match the customer's party napkins. She used the Strawberry Shortcake image on a red fondant cake with pink polka dots. The customer was thrilled, and the cake brought in an extra $10 for the rolled fondant design.
The cake department also developed a booming wedding cake business. Customers spend an average of $750 for wedding cakes at Marketplace Foods, which sells an average of 11 cakes a week.
The cake department tracks the cake numbers, sizes and flavors and orders them from the bakery. The bakery fills the orders, producing cakes from a mix, and stores them in a freezer, so the cake department can pull the cakes as needed.
The bakery, headed by Bakery Manager Bryon Schoenberg, produces a wide array of products that draw customers from 65 miles away, including Canada. Organic and Old World breads, sauerkraut being the most popular flavor, are among its best-selling items.
Assistant Store Director Ralph Towery noticed a customer with two full shopping carts filled with in-store bakery products one evening. When he asked her why she had so much from the bakery, she showed him several shopping lists from friends. She and her friends regularly take turns traveling from Bismarck, which is 100 miles away, to stock up on their favorite bakery foods every week.
Bake all day
After the remodel, the bakery also switched from mix to frozen dough production, primarily to allow more baking throughout the day. "When we were scratch, you couldn't buy a donut after 1 p.m.," Towery says. "We do as much business from 3 p.m. to 8 p.m. as we do from 8 a.m. to 3 p.m." By frying frozen-dough donuts, for example, bakery personnel has time to fry twice a day, keeping fresh donuts on display in the mornings and late afternoons.
Initially, Schoenberg was not enthused about switching to more frozen dough production. But, as a skilled baker, he manipulates the doughs and adds ingredients to develop new products and add more value to existing products. Christmas bread wreaths and bun baskets are among his specialties. Schoenberg produces the bun baskets by stretching and baking dough over an angel food pan. After the bread is baked, he fills the edible baskets with dinner rolls, and customers purchase them for parties.
Extra merchandising efforts
Marketplace Foods' management also encourages innovative ideas in its product presentation and merchandising strategies. Stromberg and Bakery Merchandiser Peggy Kallias work together to decorate the bakery for holidays or promotional events, such as the store's "Taste of the Holidays" sample show and "Rodeo Days."
A giant hand-decorated 160-sq.-ft. gingerbread house, round clamshell containers wrapped in colored cellophane to appear like hard candies and Christmas trees formed with breads and bagels are just a few examples of the decorations contributing to the bakery's festive environment. The in-store bakery's merchandising efforts have earned awards from trade associations and publicity from the local press, drawing more customers to Marketplace Foods.
Maintaining action in the bakery has helped build Marketplace Foods' reputation for quality fresh foods and a steady loyal customer base. "When you look at our department, there's not one thing here that anybody needs to survive," Stromberg says.
Store management insists the bakery bake, package, merchandise displays and sample product throughout the day as often as possible. Rather than rely on customers to come to the cake or bakery service counter for assistance, Marketplace brings the sales person to the customers. A sales assistant is positioned in the sales area next to the self-serve donut case. She offers to box or bag donuts for customers and helps them find anything else they may be seeking in the bakery.
All departments, including the bakery and cake department, encourage sales staff to promote their services over the store intercom. Bakery staff will announce when bakery products are emerging hot from the oven or describe a new product. Stromberg says the announcements should educate the customer with quick sound bites.
"It creates sales and excitement in the cake department," Stromberg says. "We keep it fun with announcements like, 'Did you know we can put a photo on a cake?' or 'We make birthdays fun from one to 101.'"
Along with drawing customers to the bakery, Marketplace Foods breaks down departmental barriers by merchandising bakery products in other areas of the store. For example, the bakery sells its banana breads in the produce department next to the bananas or breads and dipping oils in the liquor store. Cross merchandising makes the supermarket shopping experience less predictable for customers and adds sales, Towery says. "People like the thrill of the hunt," he says.
Bakery leads action
Towery and his management team strive to create an exciting shopping experience throughout Marketplace Foods, and bakery leads the action. The bakery is the first department customers see when they enter the store, it is one of the largest departments, and it keeps customers returning for new products and to experience its creative decor. Marketplace Foods' extra efforts in the bakery are bringing in sales and building its supermarkets' reputation for quality fresh foods.
"Most store managers love produce, and they hate bakeries and delis. They think they are necessary evils because someone down the street has one," Towery says. "But when you look at our bottom line dollars, you can make money at this bakery business."
| A sampling of Marketplace Foods bakery prices | |
| Sauerkraut rye bread, 1 lb | $2.59 |
| Walnut rye bread, 1 lb | $2.59 |
| Cracked wheat bread, 1 lb | $1.99 |
| Chocolate mousse pie, 9 ins | $7.99 |
| Banana cream pie, 9 ins | $7.99 |
| Decorated cupcake, figure piped | $1.49 |
| Tiramisu, single serving | $3.99 |
| Bombe cake, 8-in. round, three layer | $14.99 |
| Bagel, 3.5 ozs | $0.59 |
| Blueberry muffin, 5 ozs | $0.99 |
| Donut, glazed, yeast raised, 2 ozs | $0.50 |
| Decorated cake, 1/4 sheet | $13.99 |
| $18.99 |
| $28.99 |
