Making in-store/retail partnerships work

Once upon a time, in-store bakeries and surrounding retail bakeries were rivals. Not anymore.

Kings Super Markets, Parsippany, N.J., epitomizes a recent trend in the industry. Adding a new wrinkle to the local foods movement, some in-store bakeries have made independent retail bakeries their business partners.

David’s Cookies and Zabar’s sourdough bread, in full-branded dress, are top sellers in Kings’ in-store bakeries, and that’s no accident.

“In the past five years, it has turned from hate-hate to love-love, and now the relationship [with independent retail bakeries] is stronger than it ever has been,” says Kenneth Downey Sr., bakery director for the 24-unit Kings.

“There are retail bakers opening up 50,000-sq.-ft. wholesale facilities now just to sell the product they’re famous for to supermarkets.”

It means additional sales for the retail bakery. For the in-store bakeries, sourcing items that are already known and revered by their customers is an undisputed plus.

“Kings’ customers are known for telling us what’s on their mind. We cater to a very savvy clientele,” Downey says. “A while back, they started asking for bread from New York City, so I started investigating.”

Downey found he could do it, and do it profitably, so he’s now dealing with six of the big bread bakeries in New York, and he makes it clear in ads and in store whose bread it is.

“They deliver it warm every morning, and our customers love it,” he says.

The bread partnership worked so well that the program has expanded to include sweetgoods, such as cheesecakes from Junior’s in Brooklyn–considered by many locals to be the best in the city.

“Five years ago, we dealt with maybe three or four outside bakeries. Now it’s 15,” he says. “I think our David’s cookies, which we bake every day from David’s dough, are the best store-baked, gourmet cookies in the marketplace.”

Soon after Kings began selling David’s Cookies about a year ago, overall cookie sales jumped 25 percent in the in-store bakeries.

“David’s is one of our best branded products because of its quality and also because people knew it from the city and David’s mail order business.”

Officials at David’s Cookies had very positive things to say about their arrangement with Kings.

“Kings is not just a regular supermarket. It’s taken [its business] to a higher level, and it’s an honor to be part of that,” says Luis Florencia, David’s vice president, new business development.

“We’re two top quality New Jersey companies working together…a good combination for success.”

“The thing about dealing with retail bakeries is that the good ones are usually famous for something,” Downey says. “The key, the big key, is to bring in the best item each bakery makes. So we might buy one line each–their best– from 10 different bakeries, and all of a sudden, Kings is selling the best things it could be selling.”

Most of the branded products touted by Kings in its in-store bakeries have either been requested by customers or they are at least a familiar entity.

On a rare occasion, when Downey finds a quality product he likes and is almost certain his customers will like it, he’s apt to use its brand to help market it, even if his customers are not familiar with the brand. In such a case, though, he sets about “romancing” the product, selling its panache.

Bindi brand cakes are a case in point. The attractive, high-end cakes now occupy a featured spot in Kings’ pastry display cases, and they sell well, Downey says.

“We told the whole Bindi story, in our circular, and in store, and talked about it–about the recipes, and the cakes being imported from Milan, Italy. We said that just shortly before, those cakes were pulled out of the oven in Italy. People love that. We’ve had that program for four years, and it just gets better and better.”

Bindi cakes are merchandised in a 10-ft., brightly lit pastry case in the front of the bakery. Fruit tarts and a variety of 3-in. round cakes also are showcased in the display.

“In 15 of our stores, we have a highend pastry case, positioned exactly that way, and we’ll do that in stores as we remodel them.”

The display helps send a message that this is an upscale store, and it leads the customer into the rest of the bakery.

It’s no coincidence that a large display of David’s Cookies stands adjacent to the well-lit pastry case. And next in line in the traffic pattern are several baskets holding New York City breads.

The addition of retail bakery brands has helped boost variety, giving customers a satisfying shopping experience, Downey says.

“We have nearly doubled the selection we had five years ago,” he adds. “It also offers customers convenience–the convenience of getting their favorite New York bread, for instance, in their own neighborhood.”

Downey adds that the well-displayed brands known for their quality strengthen Kings’ image as a high-end, gourmet, niche retailer.

“It makes us unique in our market,” he says.

Emphasize freshness

In addition to a focus on well-known brands, the company works at emphasizing the freshness of its products by showing customers how fresh they are.

“You have to have theater,” Downey says. “Yes, customers want to find their favorite bread from New York and Junior’s cheesecake, but they also want to see some action in the store. They want to know that we’re a working bakery.”

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Associates often are seen packaging freshly baked cookies and muffins. Customers like it when you tell them just exactly how fresh something is, Downey says.

“Take our Kings traditional baguette. When we began time-stamping them, our sales doubled almost overnight. Same baguette, but now the customer knows–because of the stamp on its package–exactly when that baguette came out of the oven,” he adds.

Kings also bakes off Italian bread throughout the day, providing an enticing aroma that wafts through the front of the store. The theater dovetails with the prominently displayed brands and serves Kings well.

“Our cut-out [in the bakery] of store sales is well above the national average,” Downey says. “And, believe me, if it weren’t profitable, I wouldn’t be doing this.”

But Downey is constantly tweaking. “Every eight weeks, we do an SKU rationalization for the whole department. If an item isn’t bringing in what we want, it’s out.”

The recent recession made that rationalization even more important. Downey didn’t reduce staff or product variety, but he checked the cost of every item, including packaging, and, in fact, he added a new line.

The 7-in. double layer cake line is offered in several varieties, including white, yellow, carrot, blackout and red velvet, and retails for $9.99.

“Customers went crazy for them. We did OK during the economic downturn. At the worst, our sales were flat. I cut volume, made smaller displays, but we kept the same variety and did everything we could do to keep on doing business like we had been,” Downey says. And he sees evidence the economy is lightening up.

“For one thing, we’re selling more high-end items now. High-end cake sales are coming back,” he says.