Successful retail bakeries usually know their customers by name, produce high-quality products that cater to their specific neighborhoods and keep a close eye on profitability. Walt's Country Bakery, the in-store bakery department of Walt's Food Centers, South Holland, Ill. does all that, too. Plus, it gracefully manages the added labor, production and corporate pressures that have pushed other supermarket chains to cut corners in their bakeries and take the easier cookie-cutter approach.

Walt's in-store strategy isn't easy, but it is old school in that the company focuses on what its customers really want in bakery and empowers in-store bakery staff and other perishables departments to make smart decisions for their customers and ultimately Walt's Food Centers. Central to that focus in the bakery department has been the leadership of Bakery Director Dean Sytsma, a fourth-generation baker who trained at the Dunwoody School of Baking in Minneapolis and was hand picked by Walt's co-owner John Lagestee to develop its in-store bakery program in 1979.

Walt's remains a family-run independent supermarket chain, still operated by the Lagestee family. Walter Lagestee started the business as a farm stand in 1938; his sons John, Bob, Bill and Jim helped evolve the business into the full-service supermarket chain it is today. Now with seven stores, located primarily in Chicago's south suburbs, the third generation of Lagestees (John Jr., Tim, Paul and Rob) are at the helm pursuing new growth opportunities for the independent chain.

The Lagestees' foresight to be among the first stores to take on once emerging services, like adding delis and bakeries and more recently banks and pharmacies, has been among Walt's strengths. The supermarkets are equipped with the services of the large national chains while still maintaining a manageable store size (ranging from 30,000 to 40,000 sq. ft.) and retaining the personal customer service of a neighborhood store. Now engrained in the company's strategy, Walt's perimeter perishables departments, particularly bakery, are integral to top management's plans for new stores and remodels.

“If I were designing a store and building it from scratch, I'd prefer bakery early in the traffic flow. It sends a fresh, service message,” says John Lagestee Jr., Walt's general manager. The privately held company declined to offer exact sales figures, but its in-store bakeries contribute about 3.5 percent of total store sales and generate more than $2 million annually.

General Manager John Lagestee Jr. (left) and Bakery Director Dean Sytsma believe in the benefits of full-service in-store bakery departments.

The Lagestee family incorporates staff as part of the larger Walt's Foods family and remains hands-on in the business, but avoids micro managing. With the Lagestees leading by example, Walt's staff knows its customers and welcomes the freedom to take ownership in their departments. The bakeries, in fact, do not have problems finding and keeping skilled labor and are even benefitting from other chains' inattention to bakery. An example of this is Toni Rambo, cake decorator at the Frankfort location, who has decorated cakes for 30 years, much of that time for in-store bakeries. She's been at Walt's for less than a year, but jumped at the opportunity to work for its reputable in-store bakery program.

“Working for a family store is appealing. This is much more comfortable and allows me to be more creative,” Rambo says.

Encouraging creativity

In-store bakeries carry a full line of products prepared primarily from scratch/mix and bases. Frozen layers are used for cakes as well as some frozen and par-baked doughs for the bread line. The bakeries try to maintain consistency store to store in some products, but bakery managers are encouraged to decorate, finish, merchandise and order products according to customer demand for each particular store.

“We allow them to be creative with some of the different products and extend successful items out to the other stores. And if it is a product we make, we'll make more profit on it than a thaw-and-sell item,” says Dean Sytsma, bakery director. “There is a place in the market for thaw-and-sell, but that is for the stores that don't have the trained help that we're lucky to have.”

Product consistency in terms of quality is important to Walt’s bakeries, but each in-store puts its own spin on some products through creative decorating, toppings and finishing.

Sytsma balances Walt's product line profitably with a keen eye toward quality and production flexibility that can only come from experience. While each in-store produces most of its products at store level, two major product lines-cake donuts and breads-are centralized to improve consistency and produce in mass.

The Crete store houses the cake donut central facility, and the South Holland store handles Walt's exclusive line of pan breads and buns. “These items were extremely labor-intensive, so I put them in a manufacturing situation,” he says.

The in-store bakery measures about 5,000 sq. ft., which includes 2,000 sq. ft. of production space. A fully automated donut machine drops as many as 200 dozen donuts an hour. “We brought in this machine to help us control cost of goods and improve consistency in our cake donuts and donut holes,” Sytsma says. Yeast-raised donuts, however, are mixed, proofed and fried at each store. “That is one thing I won't centralize,” he says.

Along with maintaining its own in-store bakery, the Crete store manages the donut orders from the other six stores, manufacturing and prepping the donuts for shipment by 4 a.m. each day. In turn, the South Holland store begins baking breads at about 5 a.m., packaging them by 6 p.m. and starts delivering the breads to the other stores at around 10 p.m.