Giant Eagle’s two Market District in-store bakeries’ success is spurred in large part by the pastries and artisan breads made on-premise.
If you operate traditional in-store bakeries, you understand the difficulty of surviving amid high ingredients costs, soaring fuel prices and a weakened economy. But, what if you had recently introduced a scratch-oriented, service-intensive bakery, complete with on premise-produced authentic artisan breads and fancy desserts and pastries… and were seeking customers not accustomed to upscale products and their commensurate prices?
“Daunting,” you might say. Indeed, that is how officials of Market District describe their challenges since the operator opened its first two supermarkets in 2006. Market District is a unit of Pittsburgh, Pa.-based Giant Eagle Inc., which operates 221 supermarkets in Pennsylvania, Ohio, Maryland and West Virginia.
Yet, despite the obstacles, customers increasingly are embracing the new format, officials say, pointing to combined sales of the two bakeries having grown 52 percent in 2007 from 2006 and currently running 16 percent ahead of last year's pace. Combined weekly volume has soared to approach $100,000, they add.
Under the leadership of Kevin Srigley, senior vice president for Market District, Giant Eagle initiated planning in 2004 for an upscale store format, which would include innovative merchandising, new technologies and revised pricing.
The company launched its new concept by converting two Giant Eagle stores, one in affluent south suburban Bethel Park, Pa. and another in an urbane neighborhood near downtown Pittsburgh. While the center store fills everyday needs, vibrant stand-alone departments throughout each store's fresh foods section and along its perimeter project a boutique appearance in an open-air environment.
The store, with some 50,000 SKUs, creates a visually exciting shopping experience. Independent specialty departments tout nearly 5,000 food and beverage products from 10 countries and regions.
Bakery is front and center
The in-store bakery leads off the store's unique format. Just inside the store entrance, a bakery service employee at a sampling station encourages customers to taste hot-from-the-oven products. Located only 25 ft. beyond the store entrance, the 5,100-sq.-ft. self-contained bakery presents a display of more than 300 American and European-style fancy pastries, decorated cakes, artisan breads and whole and single-serve desserts in custom-made service cases and self-service units.
Market District installed a refrigerated service counter specifically to fill growing demand for single-serve desserts. Garnished to be colorful as well as taste good, items include fresh fruit, nut and flavored custard tarts; varieties of mousse cups; mini tortes and cakes; crème brûlée and tiramisu, among others.
An adjacent service counter displays nine varieties of authentic, on-premise-made artisan breads and rolls, ready to be bagged. Varieties include baguette, Tuscan, focaccia, ciabatta, rye, olive oil, Italian, whole wheat and white.
Formulated by Market District, artisan bread items are among the bakery's signature products. Others, all developed in house, include eight flavors of muffins made of ingredients such as Belgium chocolate and Madagascar bourbon vanilla; four varieties of cornbread and romano/parmesan cheese bread.
All bakery items formulated by Market District are “clean and natural,” says Sean Snoznik, Market District bakery merchandising manager. That is, they must be free of artificial ingredients and preservatives. “This makes our job more challenging, but it's worth the effort. Our customers recognize this.”
Bakery products also play a role in capturing impulse sales throughout the store, according to Matt Lachut, Market District senior marketing manager.
For example, the beverage bar, which offers fresh-roasted coffee drinks and freshly squeezed juices, displays Danish and single-serve pudding and pound cakes for morning sales and cupcakes, bars, decorated brownies and single-serve dessert cakes for afternoon and evening purchases. Sales come from a mix of customers who take them home and who consume them at the store's café seating.
“Bakery foods run hand in hand with coffee and juice drinks,” Lachut says. “Customers appreciate the value, variety and quality of product; we replenish the displays a couple of times each day.”
One edge of the bakery sales area merges into a mixed use area where non-bakery items are intermingled among self-service bakery displays. The store rotates products twice monthly to play to seasonal tastes, Lachut explains. For example, during the summer, items for grilling, such as baking potatoes and flavored charcoal, are displayed with bakery hot dog and hamburger buns. Valentine's Day calls for gift baskets of Market District brand chocolates and decorated cakes.
Training is cornerstone
Behind the service cases, a crew of 44 bread bakers, pastry chefs and cooks, and service staff prepares most of the products from scratch, bases or mixes. Their training in customer service techniques as well as production skills has been the cornerstone for the bakery's growth.
After receiving instruction in Market District policies and what constitutes excellent customer service, a new bakery employee is assigned to a trainer, who provides instruction in several skill sets. The employee is tested and scored on a check-off sheet.
Afterward, the employee is paired with a coach to help the employee enhance those skills. In addition, employees receive cross-training. For example, bakers learn proper service procedures for the bread counter and dry and refrigerated cases.
Product knowledge among all bakery employees is vital to answering customers' questions, Snoznik says. “We regularly gather a bakery's staff in a room to sample products and hear complete explanations of their ingredients, how we make them, why they are better than what other bakeries offer and so on,” he explains. “This way, anyone in our bakeries should be prepared for customers' questions. And, if a sales person cannot answer a customer's question, a baker will come up and assist.”
Heightened production training actually began a few years ago when Giant Eagle supermarkets turned to more mix and scratch artisan production. “The bakery crews had to be trained,” Snoznik recalls. “They didn't know what levain and poolish starters were.” He drew on his baking experience, having grown up and worked in scratch retail/wholesale bakeries, where he learned to make artisan breads.
“My biggest challenge was helping our people to understand that our primary bakery tool would be a bench knife, not a box cutter,” Snoznik says. “The other challenge was to learn to work smart, not just work hard.”
Among many things, he explained to bakery crews that “every wasted step costs nearly a penny. So, why not make every move to be as effortless as possible without creating physical duress or safety issues.” He applied his background as a labor scheduling specialist with Giant Eagle's training and development department. In effect, he conducted time-and-motion studies to determine the most efficient procedures.
“As a team, we laid out the most efficient bakery we could with the cards we were dealt,” Snoznik says, from bringing raw ingredients from storage in the store's rear to working with a four-deck oven whose location created work flow problems.
Artisan bread big challenge
Implementing the artisan bread program was one of the greatest challenges. “Many employees, including the bakery managers, had never handled this type of product,” Snoznik says. “It was very intimidating.”
Crews produced artisan bread for three months before the bakery sold one loaf. The project had two objectives: to train the bakers while developing the most efficient manufacturing possible.
The result was 12-hour bread output within the bakery's 24-hour production schedule. A mixer operator begins at 6 p.m. to set up bread production, using poolish starters prepared at about 2 a.m. that day. Eight different doughs are used to make nine breads.
Bread and roll make-up begin at 9 p.m. and continue to 3 a.m. Shaped products proof in ambient conditions and briefly in a proofer to enhance their crusts. Four oven operators arrive at 11 p.m. to run product through the deck oven and two rotary rack ovens.
Donut and bagel production begins at 2 a.m. Yeast-raised donuts will have been mixed and formed the previous afternoon.
Day baking shifts begin at 5 a.m., 7 a.m., 9 a.m. and 11 a.m., making scratch cookies, muffins, brownies and icings and baking off par-baked bread items. Cake decorators and pastry chefs begin at 5 a.m., 8 a.m., 11 a.m. and 2 p.m., and the last decorator leaves at 10 p.m.
After completing the project, he tackled similar procedures for the Market District store near downtown Pittsburgh. The original plan called for each bakery to produce its own products. But, the second bakery presented a particular challenge because the store is on two levels.
“The plans would not come together,” Snoznik recalls. “We decided to produce artisan bread at the Bethel Park bakery and transfer it to the second store. Doing this extended production by only 10 to 15 percent.”
Employee training and resulting improvement in production efficiency have paid off. Labor costs initially comprised 36 percent of bakery sales; currently it accounts for 26 percent, he says. “Meanwhile, sales have grown.”
Further, increased efficiencies and understanding customer needs have contributed to maintaining a stales rate of 3 percent of bakery sales, well below 7 to 10 percent common in traditional in-stores. “We understood our store sizes and have a handle on managing our growth,” Snoznik says. “The managers understand when and how much of a product must be produced for a given day of the week. They know their trigger points for production.”
As the two bakeries have evolved, a friendly competition has developed between their crews, he says. Team leaders of both bakeries meet monthly and exchange ideas, such as results of new procedures or new products. “I play the role of sowing the seeds and then they nurture them,” he notes.
Their success has led to introducing procedures and products throughout the Giant Eagle organization. For example, a 14-hour poolish starter proved so effective in making ciabatta that three traditional Giant Eagle in-stores have introduced ciabatta production.
Also, the corporate office is considering rolling out some of Market District's single-serve desserts to high-volume Giant Eagle stores. The program is attractive, too, because it uses 50 percent post-consumer recycled PETE and biodegradable packaging, Snoznik says. “One of our strategic initiatives in the bakery is to be environmentally friendly.”
Third store, bakery to open
The company recently broke ground for a new 100,000-plus-sq.-ft. Market District to open next summer in west suburban Pittsburgh. Snoznik plans to improve work flow, based on experience gained in the first two stores. For example, each bakery will produce dedicated products for all three locations: Bethel Park, artisan and other bread items; Pittsburgh, cookies, cupcakes, gourmet brownies and muffins; and the new store, bagels and donuts.
“Long production runs minimize the added costs associated with additional stores,” he observes. “And, we will piggyback our shipments onto a delivery system that already is in place.”
The cake program needs development to include wedding cakes and sculpted cakes, Snoznik says. “The demand exists, but we currently do not offer them because the required skill set is not there. We want to build this because that's another market to tap.”
Plans also include fine-tuning the dessert line by purging low-volume items and “emphasizing the products that grandma used to make,” he says. The bakeries also will add more fancy pastries and introduce sculpted, or pulled, sugar desserts. “Items like these tell customers if they want high-end pastries, come to us. We will build one-off items, of course, for a price.”
Market District's vision is “to become a destination bakery, to be the bakery of choice in the greater Pittsburgh area,” Snoznik says. “We want consumers to drive 20 or 30 miles to buy their bakery foods here, not only artisan bread but everything we offer.”
at a glance
Corporate owner: Giant Eagle Inc.
Web site: www.marketdistrict.com
Bakery management: Kevin Srigley, senior vice president, Market District; Larry Reuss, senior director of bakery operations, Giant Eagle; Sean Snoznik, bakery merchandising manager, Market District
Number of stores/bakeries: two/two
Store/bakery sizes: Bethel Park, Pa. — 117,000/5,100 sq. ft.
Market served: central Pittsburgh, and south and southwest suburbs
Bakery competitors: Whole Foods Market, independent retail cake bakeries
Number of bakery employees: Bethel Park, 44; Pittsburgh, 38
Average weekly sales: two bakeries' combined sales approaching $100,000
Product line: full line of more than 300 different products, including artisan breads and rolls, fancy desserts, pastries and sweetgoods
Major equipment: vertical and spiral mixers, cookie depositor, hydraulic bread divider, semi-automatic divider/rounder, sheeter/moulder, baguette moulder, roll-in proofer and retarder/proofer, donut fryer, four-deck oven, rotary rack ovens, computerized cake decorating machine, pan washer, walk-in refrigerator/freezer, bread slicer
Plans: produce more products from scratch and mix, purchase a muffin batter depositor, open bakery in a new third Market District supermarket next summer
Bakery supply distributor: Giant Eagle distributor center
A sampling of prices…
|Yeast-raised donut, glazed||$0.59|
|Blueberry muffin, 5 ozs.||$1.75|
|Gourmet iced brownie, 6.4 ozs.,||$2.49|
|Chocolate chunk cookie, 1 ozs.||$0.35|
|Decorated cut-out cookie||$1.50|
|Triple mousse, single serve||$4.99|
|Tiramisu, single serve||$4.99|
|Chocolate Decadence, 5 ins.||$7.99|
|Apple tart, single serve||$4.99|
|New York cheesecake, plain, 40 ozs.||$13.99|
|Apple pie, 42 ozs.||$8.99|
|Plain angel food cake, 16 ozs.||$4.29|
|Decorated cake, 8 ins.||$15.99|
|Baguette, 10 ozs.||$2.59|
|Focaccia, 12 ozs.||$3.99|
|Rye bread, 16 ozs.||$3.69|
|Ciabatta, 16 ozs.||$3.39|
|White bread, 16 ozs.||$2.99|
Building teams of leaders
To attract employees with the aptitude and drive needed to operate high-volume, service-oriented bakeries, Market District encourages better relations between skilled labor and bakery managers. Each bakery has two managers — a senior and a junior manager — to ensure that a manager is always present.
Market District also created team leaders for cake decorating, service, artisan breads and pastry, who report to the bakery managers. Leaders create daily production sheets for managers' approval. “Expectations of these employees are great because they are integral to development as well as execution. Besides, the bakery managers and I cannot think of everything. So, we go to them for their ideas,” says Sean Snoznik, bakery merchandising manager.
To help encourage ideas, Market District takes bakery managers and leaders on “food experience trips” across the country. To date, they have visited operations in Texas, California, Washington, Florida, Georgia, Louisiana and New England.