GreenHills Farms at a glance Headquarters: Syracuse, NY Web site: www.greenhills.com Number of stores and in-store bakeries: 1 Bakery/retail store size: 2,800 sq. ft. production, 2,200 sq. ft. retail (out of total 22,000-sq.-ft. store) Annual sales: $950,000 for bakery department (6% of total store sales) Product line: full-line bakery Sales breakdown: 25% bread and rolls; 20% donuts; 20% cakes; 20% cookies; 10% puff pastry, èclairs, Danish, pies; 5% muffins Market territory: Syracuse metropolitan area Production methods: scratch, frozen, mixes Cost breakdown: ingredients 39%, labor 25%, packaging 5.5% Key personnel titles: Keith Hawkins, president; Gary Hawkins, CEO; John Mahar, general store director; Bud Kennedy, store manager; Debbie Kaltenbach, bakery manager; Cindy Martin, assistant bakery manager; Todd Coombs, head baker Major equipment: vertical and horizontal mixers, rack ovens, proofer, donut fryer, sheeter Future plans: Considering artisan bread program with brick oven, continue to develop unique offerings

COMMUTERS IN SYRACUSE, N.Y. may be able to find their morning donuts cheaper by the dozen at some of the national chains along their route to work, but Green Hills Farms, an independent supermarket, has them hooked. The in-store bakery's signature donut varieties, such as head lights, filled donuts topped with white cream, have such a strong fan base that despite a lot of competition Green Hills sells more than 10,000 donuts per week.

"We don't hang our hat on price," says John Mahar, director of store operations. A dozen donuts at Green Hills costs $6.99. "This company was built on freshness, and our customers have high product quality and freshness expectations."

It is labor-intensive to turn out more than 30 varieties of scratch-made, hand-cut donuts every day, but it is part of the product panache that has made Green Hills Farms a Syracuse destination and prompted Inc. Magazine to name it "The Best Little Grocery Store in America." The bakery is a key profit center, accounting for six percent (around $950,000) of total store sales.

Donut production begins at 7:30 p.m. and ends at about 4 the next morning. "When you bite into one of our jelly donuts, you don't have to wonder where the jelly is," says Bakery Manager Debbie Kaltenbach.

Humble beginnings
Green Hills Farms began as a roadside stand in South Onondaga, N.Y. where, in the early 1930s, Founder Carrie Hawkins sold vegetables grown in her garden as a sideline to her family's dairy farming business. The stand was so successful that Hawkins eventually moved it to its present location on Route 11, one of the most heavily traveled arteries leading into downtown Syracuse.

In 1948, Hawkins' son, Clifford, closed the dairy business to focus on turning the stand into a full-time, year round operation. Its growth continued through the '50s, as Clifford's son Keith developed the various departments that would become Green Hills Farms full-service supermarket.

With the focus still on fresh foods and produce, the Hawkins family started out buying cakes, pastries and breads from regional bakeries to sell at the store. As the demand for bakery products increased, Keith Hawkins quickly recognized the profit potential in bringing production in-house.

Today, 5,000 of the store's total 22,000 sq. ft. are dedicated to the bakery department. Each day, the staff of 15 (six full-timers) bakes several hundred SKUs in the 2,800-sq.-ft. production area.

Breads, a combination of scratch and frozen bake-off loaves and rolls, account for 25 percent of sales. Green Hills has been baking its own scratch Italian bread for more than 35 years and sells an average of 800 of the traditional, 1-lb. loaves per week.

From that same basic dough, the bakery team also creates a variety of flavorful loaves and rolls, including five-cheese bread, a signature item introduced three years ago. During cold weather seasons, the store sells between 15 and 20 of the premium-priced ($4.59) specialty loaves per day from Thursday through Sunday, according to Head Baker Todd Coombs.

For maximum visual impact, Green Hills Farms lines its curved-glass cases with marble and creates a two level display by using decorative plates and footed cake plates.

The bakery has been producing scratch-made Italian loaves for more than 35 years and sells about 800 of the 1-lb. loaves weekly.

Bread, which accounts for 25% of Green Hills bakery's sales, is baked three to four times a day, with the last loaves leaving the ovens at 5 p.m.

John Mahar and Debbie Kaltenbach maintain the bakery's shrink at about 8%.

During graduation season, Green Hills averages about 30 to 40 decorated cakes a day. To keep up with production, cake layers are pre-baked and frozen.

"Five-cheese bread is a labor intensive item, but it sells very well and is a prestige item with a high profile that helps to make us a destination bakery," Coombs explains.

Another draw is the fact that, as the chalkboard sign above the European display announces to customers, Green Hills Farms bakes fresh Italian and other breads at least three and often four times a day, Kaltenbach notes. The first loaves generally come out of the oven between 8 and 8:30 a.m. The last loaves are baked at 5 p.m., so customers have a fresh, warm loaf for dinner, she adds.

The bakery switched from merchandising packaged bread to displaying the loaves in baskets in a service case. The bakers felt the packaging might be adversely affecting the crust, Mahar says. Some sliced and unsliced loaves are displayed on a shelf at the foot of the case for the convenience of customers who still want to grab and go, he adds.

Self-service bakery
To ensure that customers can still buy Italian loaves after the service portion of the bakery closes for the evening at 7, staffers move the breads to a self-serve wall unit at shift-end. The rest of the market stays open until 10 p.m.

Presently, donuts, cookies and cakes each account for 20 percent of the bakery's sales. Together, pies and other pastries (including puff and Danish) bring in 10 percent, and muffins another 5 percent.

Aside from the breads, pies and some of the more fragile pastry items, such as croissants, scones and gourmet icing-and nut-covered cinnamon buns, most of the bakery products are sold from self-serve shelves, tables and cases. In fact, at least 75 percent of the bakery's total sales are self-serve, Mahar points out.

Prior to a major departmental makeover in 1994, Green Hills' sold everything from staffed service cases. Shortly following the installation of a compartmentalized self-serve wall unit, however, donut sales almost immediately soared by 25 percent, he says.

Most of the bakery's products are sold already packaged. Cookies, for example, are sold packaged by the dozen. Only a special extra large chocolate chip variety is pre-wrapped for individual sale at the deli counter.

Green Hills has been baking its seven varieties of cookies from scratch for eight years, hand scooping about 3,000 per week. The bakery previously used frozen disks. "We knew we could make them a high volume signature item if we made them in-house," Kaltenbach says. Plus, observes Mahar, "Our suppliers kept dropping products we liked to use so we decided to control our own destiny."

Among the top selling signature cookies are halfmoons, which are white cookies with a cake-like texture (using both cake and bread flour), iced half in white icing and half in chocolate icing. About 600 half-moons are produced each week and sold four to a package.

The half-moon cookies also are iced in novelty colors for holidays, such as green and white for St. Patrick's Day, red and white for Valentine's; and for local schools, such as orange and white for nearby Syracuse University during football and basketball seasons.

Whether it is turning a donut into a head light, a cookie into a half-moon or a stack of cinnamon buns into an icing-and-sprinkles-decorated Christmas tree brunch centerpiece, Green Hills Farms is always working to expand the selection of products that make the independent supermarket such a one-of-a-kind operation, Kaltenbach says.

"It's not at all unusual for customers to drive 25 or 30 miles to shop here," Mahar adds. "They've been doing that for generations, and it's up to us to make sure we remain a destination for generations to come."

A Sampling of Green Hills Farms Prices
Five cheese bread, 6 ozs	$4.59
Half moon, 4 ozs. each, 4 pack	$3.49
Éclair, 6 ozs	$1.50
Bagel, 4 ozs.	$0.65
Big chocolate chip cookie, 5 ozs	$0.99
Regular cookies, 11/2 ozs. each, 12 pack	$3.99
Gourmet cinnamon rolls, 8 ozs	$1.25
Hard roll, 3 ozs	$0.40
French baguette, 12 ozs.	$2.99
Head light, 4 ozs	$0.65
Apple fritters, 4 ozs.	$0.65
Scones, 4 ozs.	$1.25
All-butter croissant, 4 ozs.	$1.25
Shadow cake, 56 ozs.	$9.99
Turnover, 8 ozs.	$1.50
Apple pie, 46 ozs	$8.99
Figure 8 Danish, 81/2 ozs.	$1.25
Monster Muffin, 5 1/3 ozs.	$1.25
Cheesecake brownies, 40-oz. round	$14.99
Italian loaf, 16 ozs.	$1.59