Six Steps to Glory
Retail bakeries have long recognized the importance of community involvement, and yet today this factor is even more significant to the economic health of local neighborhoods across the country.
Starbucks recently opened its first store in Ferguson, Missouri, as part of a national plan to provide local jobs, create training opportunities for youth, and support efforts to rebuild and revitalize communities. The city of Ferguson received widespread national attention in August 2014 following protests after the fatal police shooting of 18-year-old Michael Brown.
Starbucks plans to open similar stores in at least 15 low- to medium-income communities across the US by 2018. With an estimated 5.5 million young Americans not in school or at work, the majority of whom live in some of the country’s most diverse, yet underserved communities, Starbucks aims to make a long-term impact by opening stores that will help provide a tangible boost to the local economy and bring meaningful jobs.
“We’ve long considered how we can help deliver social impact in ways that drive our business forward,” said Rodney Hines, Starbucks director of community investments for US retail operations.
As part of its commitment to investing in the community, Starbucks is working with Natalie DuBose, owner of Ferguson bakery Natalie’s Cakes & More, which suffered extensive damage following the rioting in 2014. Starbucks is now selling DuBose’s signature caramel cakes at more than 30 St. Louis-area locations and will feature the product in the new store in Ferguson. As a result, DuBose’s workforce has grown from three to more than 20, double what it was when Starbucks broke ground on the Ferguson location in November 2015. DuBose is also heavily involved in the community, speaking regularly about entrepreneurship at local high schools, hiring locally, and sourcing ingredients locally whenever possible.
Starbucks will work with nonprofit partners like the Urban League of Metropolitan St. Louis to provide a multi-week job skills training program for local youth, using a specially-designed classroom space within the store. Starbucks hopes to work alongside community partners like the Urban League to help address some of the systemic barriers facing young people in the Ferguson area.
The Starbucks store, featuring both a cafe and drive-through at West Florissant & Somerset in Ferguson, has hired 30 employees, many of whom are from the Ferguson or greater St. Louis areas. Hiring locally is an important part of the company’s strategy to support economic development and build stronger connections with the community.
The Ferguson store will work with the Urban League of Metropolitan St. Louis to provide a unique in-store training program where young people in the community will have the opportunity to enroll in a multi-week retail and customer service skills training program. The program meets a critical need for practical job training opportunities for young people, many of whom are eager to start their first job and work collectively to transform the legacy of the Ferguson community.
Starbucks is set to offer a similar training program for youth at its new store in the Jamaica neighborhood of Queens, New York, working with local nonprofit organizations like Queens Community House and the YMCA and Opportunities for a Better Tomorrow’s Y Roads program. Starbucks will seek to build similar alliances in each of the 13 additional communities it is considering in the national initiative, including stores in the Englewood neighborhood of Chicago’s South Side and a remodeled store at 7th & Camelback in Phoenix.
The Starbucks example offers one innovative path to build a successful retail business by intertwining your operation into the fabric of the local community.
The following are six profitable ideas that offer great potential to expand your horizons.
As retailers seek new ways to improve their menu selections, a number of bakery owners are witnessing strong growth on the savory side.
Sugar and Scribe Bakery/Fine Food, an up-and-coming bakery and restaurant in La Jolla, Calif., is owned by Maeve Rochford, who won The Food Network’s 2015 Holiday Baking Championship. Sugar and Scribe carries Irish specialties all year long, such as Irish soda bread, Irish tea scones, muffins, Guinness porter cake and mincemeat pies. The authentic Irish recipes come from family and friends, especially Rochford’s grandmother who cooked in a Great House in England.
In December, Rochford won the $50,000 grand prize in the Food Network’s Holiday Baking Championship. In her Fay Avenue bakery and restaurant, Rochford offers an array of cakes, cupcakes, pies, muffins and cookies, as well as a breakfast and lunch menu. Rochford’s passionate enthusiasm for food has been met with rave reviews. Sugar and Scribe was named the best bakery in San Diego by A-List voters in 2016, surpassing 50 nominees.
Now she is looking to expand her business up a notch. Coastal Limited, a national full-service business development company specializing in representation and licensing, recently signed celebrity baker and chef Rochford, owner of Sugar and Scribe Bakery/Fine Food, for business development, brand extension and merchandise licensing opportunities. “I am thrilled to have the opportunity to work together to take me and Sugar and Scribe to the next level. Cooking is my soul’s desire. Eating is my heart’s calling,” Rochford says.
In similar fashion, St. Louis retail bakery Piccione Pastry is winning over more customers with a sweet and savory menu that continues to expand. On Mother’s Day, the bakery featured a brunch celebration that included sweet and savory breakfast and lunch fare such as ricotta pancakes, chicken Alfredo, Piccione benedicts, frittata with fresh, local ingredients, and an assortment of the shop’s signature pastries, mini cannoli and Italian cookies.
“We’re excited to channel our history and Italian culture,” says Sandia Hoormann, Piccione Pastry’s chef. “The Mother’s Day brunch menu includes a number of special offerings that are not regularly available at the shop.”
Coffee & Sweets
As donut shops enjoy a surge in popularity throughout North America, gourmet coffee and unique donuts are proving to be a highly successful formula for growth.
Look at the success story of St. Louis-based Strange Donuts, which opened its doors in October of 2013 and hasn’t slowed down since. Collaborating with local restaurants and a premium local coffee brand, Kaldi’s Coffee, Strange has quickly become a staple of St. Louis culture and its own unique way of life. Founders Corey Smale and Jason Bockman recently helped form 501(c) nonprofit Strange Cares, which focuses on empowering kids throughout their community. With three locations in two markets, Strange looks to expand further with plans for new stores and new markets in the works.
“We now have our own coffee brand that is brewed, blended and shipped all over the world,” says Bockman. “From the start, we wanted a premium coffee to offer with our brand of donuts. We work with Kaldi’s to make our own roasted blend, which is a little fruity and complements our donuts. It is roasted with fruit, which definitely makes it different.”
In Canada, coffee and cookies have long been the quintessential afternoon snack but cookie flavored coffee puts a whole new twist on this trend. Two Rivers Coffee Inc. and Montreal-based Félix & Norton have joined forces to launch the Félix & Norton Coffee & Hot Chocolate brand of single serve cups during the SIAL CANADA food show at the Montréal Convention Centre.
Two Rivers Coffee is one of the original Keurig-compatible, single serve coffee manufacturers in North America, manufacturing and distributing Keurig compatible single serve products nationwide to retail stores and online outlets. TRC produces several brands but has recently teamed up with Félix & Norton to offer premium line of products. The partnership with the famed Montréal-based cookie company unites its mass popularity and following with a premium level of experience and quality.
Félix & Norton has emerged as a leading brand of gourmet homemade cookies in Montréal. Known for its specialty cookies, the company quickly evolved from a single corner shop operation to 45 specialty stores across Canada. In 2008, the company launched a mobile bakery, sending the environmentally-friendly, solar and propane-powered food truck to the streets of Montréal, delivering cookies to consumers daily.
"We are very excited about our new venture with Two Rivers Coffee," says Michael Eskenazi, president of Félix & Norton Licensing Inc. "We have worked closely together to create gourmet cookie-flavored coffees and hot chocolates reminiscent of our Félix & Norton cookie flavors.”
With affordable real estate sometimes difficult to find, national bakery chains are exploring new ways to reach customers by focusing on nontraditional venues.
Dunkin' Donuts and Baskin-Robbins, along with food service operator Sodexo, have opened a milestone multi-brand restaurant at the US House of Representatives in Washington, D.C. The restaurant, located in the Longworth House Office Building, officially opened its doors in April.
The restaurant, which includes a Dunkin' Donuts and Baskin-Robbins under one roof, features Dunkin' Donuts items that can be enjoyed all day, including coffee and lattes, espresso-based beverages, sandwiches, donuts and other bakery goods. The restaurant will also feature items customized with flavors adapted to suit local taste preferences, such as the Cherry Blossom and Capitals Craze Donuts. The multi-brand restaurant is approximately 350 square feet and employs approximately eight crew members.
Sodexo is the Dunkin' Donuts franchisee at the U.S. House of Representatives. The multi-brand restaurant at the U.S. House of Representatives marks the 198 Dunkin' Donuts and 64 Baskin-Robbins in Washington D.C.
"We are pleased to serve the hard-working people of Washington, D.C. and the U.S. House of Representatives and hope that this location will become a popular destination and everyday routine for employees, staff and visitors," says David Scanlan, CEO Government, North America, Sodexo. "The Dunkin' Donuts and Baskin-Robbins multi-brand location is the perfect addition to our food program at the House of Representatives, and early excitement around its high-quality coffee, snacks and ice cream treats indicate that staffers, Members and visitors to the Capitol campus will welcome our newest arrival."
Another path to success for retailer bakeries starts with appealing to America’s growing numbers of Hispanic and Asian customers.
Despite the fact that Latin American immigration appears to have stagnated, the U.S. Census Bureau expects this demographic to reach 106 million by the year 2050 — a 57% increase from 2015 — and that’s after the bureau actually lowered its projections. Hispanic consumers represent a large segment of purchasing power for a number of products. And at the same time, they are driving food trends that can be seen in product development ranging from flavor fusion to food mashups that represent multiculturalism in often surprising ways.
Chicago is being introduced to the many flavors of Mexico and other Hispanic countries at a new downtown food destination called Latinicity, which opened last November. During the opening weekend, the pan-Hispanic inspired food hall, which was developed by acclaimed chef Richard Sandoval, was so popular that it had to temporarily stop service at its multitude of restaurants after being swamped by more than 10,000 visitors.
At the café inside Latinicity, customers can buy individual pastries and packaged alfajores, a popular cookie in Argentina that typically contains a filling of dulce de leche. The cookies are somewhat like French macarons in appearance, but the flavors are distinctively different. The cookies are made with cornstarch to give it a flaky texture.
Founded by Lucila Giagrande, Lucila's Homemade was founded out of her desire to bring to America the treats Lucila grew up with in Argentina. Her hand-crafted pastries are now sold at gourmet grocers, specialty coffee and tea shops, farmers markets and online. Lucila's alfajores are handcrafted using unique artisanal techniques. Each cookie starts with the simple ingredients of cornstarch, flour, sugar, eggs and butter.
Equally important to the ethnic fusion trend, Asian foods are gaining popularity in leaps and bounds in America. In late April, Lee's Sandwiches, a leading chain specializing in Bánh mì sandwiches, opened its first East Coast store in Falls Church, Virginia. To celebrate its grand opening, the Falls Church store hosted a limited-time giveaway to customers who received a free cup of Lee's Vietnamese Iced Coffee or a free baguette with a purchase of any sandwich. Unique to the Falls Church's 7,000 square-feet store facility is its on-site dough treatment system, along with bread baking equipment line to produce crispy and golden baguettes to customers daily.
"We hope the East Coast will enjoy our delicious food that our customers have come to trust and love," said Chieu Le, chief executive officer and president of Lee's Sandwiches International, Inc.
Founded in 1983 in San Jose, California, Lee's Sandwiches boasts more than 60 locations in Arizona, California, Las Vegas, Oklahoma, Oregon, Texas, Virginia, and Taiwan. Lee's Sandwiches is best known for its Euro-Asian sandwiches and gourmet coffee, among other products.
Culinary tourism has become booming business, and it’s time for retail bakeries to cash in. Today’s travelers are now making food a top priority when planning a trip — no matter the cost.
According to a recent MissTravel.com poll, 46 percent of travelers prefer to splurge on local cuisine rather than paying extra for airfare or accommodations. Having an authentic meal or experiencing local activities can become a once-in-a-lifetime opportunity, and travelers are willing to pay the price. Food festivals are drawing millions of travelers seeking to engage in local culinary celebrations.
“People travel to experience a new destination for all it’s worth,” says Brandon Wade, founder and CEO of MissTravel.com. “Travelers don’t want to spend their precious vacation time in a hotel room, they’re seeking out distinctive experiences that offer unique insights into a new culture. Airports and hotel rooms blend together after time but the memories of a delectable dish or the experience of trying something new never fades.”
To take advantage of this trend, bakeries are opening in new locations that aim to attract large numbers of local tourists.
Simon, a global leader in retail real estate, recently announced the transformation of the Stanford Shopping Center and the addition of numerous new stores is nearly completed, further elevating the shopping experience at this well-loved Palo Alto shopping destination. Catering to some of the most exclusive luxury brands, Simon has significantly enhanced the retail environment of Stanford Shopping Center to reflect the Bay Area's upscale and outdoor lifestyle.
A number of retailers will be opening in the Stanford Shopping Center, including Pink Posy bakery and cafe. The bakery and café will feature special cakes and confections for weddings, birthdays and showers, and this new location at Stanford Shopping Center will also offer anytime treats and light lunch bites, as well as coffee and espresso.
The Cafe Connection
Fast casual restaurant chains like Panera Bread continue to be on a winning streak, growing both in units and customer visits, finds The NPD Group, a leading global information company. The number of fast casual chain restaurants rose by 5 percent to 19,043 total units, based on NPD’s census, which includes restaurants open as of September 30, 2015. Fast casual customers increased their visits by 6 percent in the year ending February 2016 compared to a year ago, while total foodservice traffic rose by 1 percent, according to NPD’s ongoing foodservice market research.
It’s no wonder that a number of bakery cafe chains are aggressively adding stores in the United States.
Privately held and founded in Brussels in 1990 by chef Alain Coumont, Le Pain Quotidien is now an international chain operating more than 240 restaurants in 18 countries around the globe. Le Pain Quotidien owns over 100 locations in the United States, the United Kingdom, France, Australia and Belgium and has a franchise network in countries including Argentina, Brazil, India, Japan, Mexico, the Netherlands, Russia, Spain and Turkey. The first US location opened in 1997 in Manhattan and has since been joined by locations along the East Coast and in Chicago and California.
Earlier this year, Le Pain Quotidien appointed Doug Satzman as the US chief executive officer. US operations oversee 87 restaurants and three bakery production centers in the New York, Los Angeles, Washington, D.C., Philadelphia and Chicago metro areas and are supported by approximately 3,400 employees. During his 14-year tenure at Starbucks, Satzman was a key architect of growth, leading teams that helped increase store counts from 2,000 to 20,000 globally.
Last year was a record year for Le Pain Quotidien with double-digit gains in revenue and profit. This success included a focus on disciplined growth, yielding an impressive 11 new US restaurants — the most openings in any one year.
Le Pain Quotidien, which is French for “the daily bread,” began with the inspiration of Alain Coumont’s passion for food. As a child in Belgium, Alain spent countless hours perched on a chair, watching his aunt make bread. As a young chef in Brussels, Alain could not find the right bread for his restaurant. Passionate about quality, he returned to his roots and opened a small bakery where he could knead flour, salt and water into the rustic loaves of his childhood.
Alain opened his bakery on rue Antoine Dansaert in Brussels, in those days an avant-garde quarter of Belgian fashion. He named his bakery Le Pain Quotidien. At a local flea market, Alain found a long table where his guests could sit to eat together; it became Le Pain Quotidien’s first communal table.
Brussels quickly took to the taste of this traditional bread. Alain evolved his offering to include simple salads and tartines, keeping bread the cornerstone of the menu. Success was rapid and Alain had numerous candidates who wanted to open other Le Pain Quotidien outlets. In the space of a few months, 10 locations opened in Brussels. Alain then followed his dream to open restaurants in the United States. In 1997, Alain opened his first restaurant on Madison Avenue in New York City, which was an instant success. Shortly thereafter, he met a group of Belgian investors who backed his U.S. expansion plans. With this financial support, he opened several locations in New York City and later in Los Angeles. In 2004, headquarters were established in New York City.
At Le Pain Quotidien, the concept starts with a strong belief in the benefits of a plant-based diet. The bakery cafe offers many vegan items that are labeled 100% botanical on menus and all organic breads are vegan, except for Challah. Some of the café’s most popular vegan dishes are the Avocado Toast, Quinoa Taboulé Salad, Six-Vegetable Quiche and Chia Seed Pudding.
Others are blazing new trails on the bakery cafe front. Paris Baguette has announced aggressive expansion plans in the United States through strategic franchise partnerships in 18 target markets with an immediate development focus on California, New York, New Jersey and Pennsylvania. With more than 70 years of experience in the baking industry internationally, Paris Baguette first debuted in the United States in 2005 and began franchising August 2015.
With a current presence of 45 locations stretching from the West Coast to the East Coast, the company is projected to open more than 350 locations by 2020.
Specializing in French-inspired cakes and pastries, Paris Baguette’s mission is to provide guests with “the best way to happiness” through indulgent treats and savory eats. In addition to its French offerings, the company places an emphasis on applying global cuisine to its menu, including items such as the strawberry mojito and horchata frappe. In addition to offering custom signature coffee and gourmet sandwiches, it is best known for items such as fruit bites, croissants, feuilletes au chocolat, blueberry chiffon cake and chocolate strawberry cake.
La PanotiQ, a bakery cafe specializing in authentic French pastries, is preparing to open its fifth store, as the business expands across the San Francisco Bay area of of California. With locations in Campbell, Mountain View, San Francisco, Livermore and its latest store slated to open in Berkeley, each cafe offers more than 50 types of French pastries, cakes, and petit fours.
The stores also carry breakfast, brunch, and lunch/dinner menus with Parisian favorites like brioche French toast, French-style sandwiches on baguettes and Nicoise salad.
CEO Maria Guterman attributes the growth of the stores (five opened in a year) to the high demand for quality foods that are organic and non-GMO. "All of our pastries and cakes contain 100% French/European ingredients. Our AOP butter, flour, sugar, cocoa and fruit are imported from France and Europe. People get the difference in taste the first time they try our food. It tastes authentic because it is authentic."
Paris Baguette recently opened a bakery cafe in San Jose, California, creating more than 30 new jobs. The San Jose location is owned and operated by local resident Joshua Kim, who is Paris Baguette’s first franchisee since the company began franchising in August 2015. Kim has additional plans for two more locations in the San Jose market.
With a degree in industrial engineering from DongGuk University in Seoul, Korea, Kim grew up with a passion for food watching his mother run a restaurant in Korea. He went on to open a string of Belgian Waffle stores in Korea from 1997 to 1999, further solidifying his transition from the engineering field to the food industry.
Now, as the owner of Refresh Foods, Inc., a healthy meal and beverage retail company, and the director of operations in California for Paris Baguette since 2007, Kim looks forward to his first Paris Baguette franchise sharing similar success experienced by locations in the Santa Clara and Palo Alto markets.
“I cannot wait to share these delicious products with the people of San Jose,” said Kim. “Our guests can choose to either grab a quick treat on-the-go, or lounge inside our spacious bakery to indulge in a decadent dessert, savor a sandwich or catch up with friends over steaming mugs of coffee.”