Hermit crabs take over abandoned shells and make them their own. Angelo Caputo’s Fresh Market recently has gown in a similar way. In about a year, the Addison, Ill.-based company opened two new stores in a former Marsh store and a former Dominick’s store. Opening the two new locations was no small feat for the independent chain, which jumped from four to six stores in a short time when compared to its 50-year history.

Italian immigrants Angelo and Romana Caputo founded Caputo’s Fresh Markets in 1958 with their first store in Elmwood Park, Ill. The husband and wife team helped grow the company from a produce and Italian specialty store to the respected full-service chain it is today. Caputo’s was voted Chicago’s best neighborhood fresh market by Chicago Magazine, and it is known throughout the area’s culinary community as the place to go to find the foods they can’t find anywhere else.

Rather than expand through more stores, the Caputos chose to diversify their product line to cater to new customers and establish their own high-quality brand of products, called La Bella Romana. Meaning “the beautiful Romana,” the line is named after family matriarch Romana Caputo who was involved in the business until her passing in 2004. Today, Caputo’s remains in the family, run by another husband and wife team, Antonella Caputo and Robertino Presta (Angelo and Romana’s daughter and son-in-law who met as teenagers while working at the stores.) Angelo has retired, but still advises management and makes frequent visits to the stores he founded.   

The La Bella Romana brand includes a line of Italian specialty foods, scratch-made bakery products and a restaurant and catering program. All stores feature in-store bakeries that bake and finish some products, but the central bakery handles production for most of the line. Many of La Bella Romana bakery products are based on Romana’s authentic family recipes, says Dale Ohman, Caputo’s marketing director.    

“Our bakery is something we’ve always been very proud of because it is different from everybody else’s,” Ohman says. “The bakery is a big part of who we are. We are a destination for a lot of customers.”
Caputo’s corporate offices are housed in the same building as its central bakery, which takes up about 10,000 sq. ft. of the 60,000-sq.-ft. building in Addison, Ill. The bakery produces about 120 SKUs and delivers fresh bakery products to all six stores twice a day. Traditional Italian favorites, such as cannoli, napoleons, tiramisu and cassatines are the heart of the La Bella Romana bakery line.

Caputo’s in-store bakeries, while true to their Italian roots, reflect changing demographics–particularly in their DSD breads. The bakery boasts the largest variety of branded breads from Chicago-area bakeries with offerings ranging from French baguettes to dark Russian ryes. On the pastry side, Polish kolachkis are among the bakery’s top sellers.

“We started as a produce store, and we’re now an international market,” Ohman says. The company’s first store in Elmwood Park opened to a 100 percent Italian customer base, he says. Today, Italian-Americans represent only about 20 percent of customers at that location. Caputo’s six stores draw a melting pot of customers from throughout Chicagoland, but the Polish, Russian and other Eastern European population has grown in particular.

Chicago ready for Caputo’s
Adapting to a changing marketplace and recognizing new opportunities have been key to the company’s longevity. Two large supermarket chains, Dominick’s and Jewel, have long dominated the Chicago market. Both Dominick’s, now owned by Safeway Corp., Pleasanton, Calif., and Jewel, owned by SuperValu, Edina, Minn., have lost much of their local appeal since being acquired by the national chains. Other outsiders, such Indianapolis-based Marsh Supermarkets, have attempted to crack the Chicago market without success.
With a dearth of brand loyalty to regional chains, Chicago is ripe for supermarkets that cater to local tastes and offer fresh, quality foods at reasonable prices, particularly in its expanding suburbs. Sensing this opportunity, Caputo’s picked up the pace of its new store growth. The company knows Chicago and has always tailored each store to its neighborhood. Every Caputo’s store looks different; in-store bakery sizes range from 200 sq. ft. to 2,500 sq. ft. with merchandising space varying significantly store to store. Caputo’s Naperville store even maintains the circular layout left behind by its former Marsh tenant.  

“We could have grown a lot more than we did. There are a lot of vacant stores out there, but we want controlled growth. Our goal is not to be the biggest at what we do, but to be the best at what we do,” Ohman says.

Organized communication between Caputo’s central bakery and its in-stores drives bakery performance. The company would not reveal bakery sales, but offered customer counts to demonstrate sales volume. During Christmas week last year, each in-store bakery drew 3,500 to 4,000 customers.

Bakery Director Betty McElroy oversees in-store bakery operations and acts as the liaison between the stores and the central bakery. She works closely with Jenny Gajardo, production manager, who manages a staff of about 17 to fulfill in-store bakery orders, including custom decorated cakes. Getting two deliveries of product daily ensures fresh baked products at store level and helps bakery managers control shrink. “We can order just what we need in the morning knowing we can order more for the second delivery,” McElroy says.

Driving impulse sales
Of course cannolis are the bakery’s signature, and in-store bakery associates fill and finish cannolis as needed to ensure freshness. The central bakery supplies cannoli shells and the ricotta cheese and confectioners’ sugar-based filling. In-store bakeries also bake breads and cookies from frozen dough throughout the day. The fresh baking aroma draws customers to the in-stores, attractive displays of European-style pastries, cakes and cookies pique their interest, and active sampling and suggestive selling seal the deal.

“When people go grocery shopping about 85 percent of what they buy is an impulse sale,” Ohman says. “They’re buying milk, bread, eggs, but our cannolis probably are not on their list. Suggestive selling is extremely important.”

Bakery associates are trained to listen to and report customer requests to bakery management, understand Caputo’s product line and suggest additional or alternative products to customers if the bakery does not offer exactly what they are seeking.  

“Their [the Caputo family] philosophy is that we never say ‘no’ to the customer. Most of our new products come from customer requests,” McElroy says.

Most bakery managers have some bakery production background either at Caputo’s or another bakery. Bakery sales associates are encouraged to work a day in the central bakery to gain a better appreciation for the products and the balancing act between the central bakery and the stores.

In-store bakery associates also offer product samples of featured products or if a customer requests a specific item. McElroy emphasizes the need for the bakeries to keep the samples fresh and offer top-quality products, not day-old pastries just to get rid of them.

“When we sample things, we sample to sell. We don’t sample to feed people,” McElroy adds.
Caputo’s customer service mission is evident from new employee orientation training up through corporate management’s involvement with customer complaints. All customer complaints received through Caputo’s hotline, which is printed on every receipt, are directed to C.E.O. Antonella Caputo. She, Robertino and other top management gather regularly to decide their plan of action on each complaint.

Capitalizing on its homegrown brand, Caputo’s Fresh Markets has instilled its customer service and fresh food philosophy throughout its organization even during its exceptional growth from 175 to more than 800 employees during the last six years. With its La Bella Romana brand leading the charge of authenticity, Angelo Caputo’s Fresh Markets is just getting started at age 50.

For now, Caputo’s is content with its growth, but is always seeking new opportunities. “Things change. We have to be ready for that in this business,” Ohman says. The central bakery is reaching capacity, and the company is constantly getting customer requests for Caputo’s to open stores near them. Some customers even travel more than 150 miles to shop Caputo’s stores, McElroy says.

“We’re in the people business,” Ohman adds. “Yes, we sell bakery and produce, but we’re primarily in the people business. Angelo always says his name may be on your paycheck, but he doesn’t sign your checks. Our customer signs your check.”