Rich Reinwald, owner of Reinwald’s Bakery in Huntington, New York, echoes the sentiment that retail bakeries have successfully carved a spot in which consumers no longer think of their products as commodities. And that’s a good thing when it comes to pricing.
“Our business is doing well. Our town is experiencing explosive growth and, with gas prices hovering in the $2 a gallon range, this has helped discretionary spending,” Reinwald says of the effect of the improving economy on the retail bakery sector.
As minimum wages increase across the country and the labor pool tightens, retail foodservice operators are faced with the challenge of finding ways to offset higher labor costs without driving away customers. For most operators, wage increases translate into price hikes on menus, thus posing the risk of losing valuable customer visits. Operators have to prioritize solutions in order to effectively navigate between the pressure to raise menu prices within the competitive landscape and consumer perception of value.
“With many operators serving lower- and middle-income groups that seek value in the form of dollar menus and combo meals, paying higher wages will ultimately result in higher menu prices,” says Darren Tristano, president of Technomic. “Operators need to best assess where consumers are willing to spend more and take price increases that will be easily accepted to avoid losing customer visits.”
For retail bakeries, seasonal specials are a great tool to avoid implementing across-the-board price increases, especially as the fall and winter holidays approach and retailers prepare for their busiest times of the year.
The following are some specific ideas:
Spotlight on Donuts
Donuts are a great platform for offering seasonal flavors, particularly during special times like National Donut Month in October, Fat Tuesday in February or National Donut Day in June.
Every year during the later summer season, The Donut Man in Glendora, California, makes a decadent glazed donut stuffed with ripe peaches. These high quality donuts bring in thousands of visitors looking for a seasonal sweet.
The Donut Man is known for its fruit-stuffed donuts, most notably the peach version, but also a strawberry version. Customers can only buy these when the fruit is in season, meaning that the peach donuts are only for the short term.
Further down the calendar, the winter months leading up to Fat Tuesday are the best time of year to promote the Polish-inspired filled donuts known as paczki.
“There are definitely holidays and times of the year when we only offer certain seasonal products,” says Beth Fahey, co-owner of Creative Cakes in Tinley Park, Illinois. “By doing that, we create this kind of specialness about it. For example, we sell our paczki from the Epiphany, which is the first week in January, until Fat Tuesday. After that, we don’t sell them anymore. What that does is create a sense of, ‘Well, I better get in there now because it’s really special and we only get them once a year.’”
A galette is an increasingly popular pastry that offers boundless opportunities for introducing seasonal flavors to your bakery’s menu. The acclaimed Balthazar Bakery in New York City features Galette des Rois in January, as does award-winning La Farm Bakery in Cary, North Carolina.
This tender puff pastry is filled with a decadent almond cream filling, according to La Farm Bakery, and can be served warm with ice cream or at room temperature. It includes the Royal Crown and porcelain trinket to play the famed "Epiphany Game."
In France, it’s tradition that when the cake comes to the table, the youngest person at the gathering slides under the table or covers their eyes and then tells the host what order each person is served. As each guest enjoys their dessert, one person will find a porcelain “surprise” figurine in their piece of cake. The person who finds it keeps it hidden from the group until everyone finishes. Once finished, the person who found the figurine gets to name his or her “king” for the year.
Galettes are made with sweet flaky pastry dough that can be filled with any number of seasonal fruits, or even savory options, to appeal to customers looking for a quick meal.
Just in time for National Popcorn Poppin’ Month in October, get ready to pop out with a new snack option for your retail bakery customers.
Americans eat a record 13 billion quarts of popcorn each year, according to the Popcorn Board, and it appeals to customers looking for a healthful and fun snack. Celebrated for its farm-to-table simplicity, popcorn is also non-GMO, vegan, gluten-free, sugar-free and naturally low in fat and calories, according to the Popcorn Board.
Retailers have certainly caught on. Years ago, Concannon’s Bakery Cafe in Muncie, Indiana, discovered that gourmet popcorn could be a serious money maker, especially in a place like Indiana, the second-largest popcorn producing state in the country.
All of its gourmet popcorn is made at Concannon’s, and the bakery offers several varieties including caramel, Chicago style, cheddar cheese, white cheddar cheese, rainbow, toffee, vanilla, poker mix, green apple and caramel, and hot cinnamon and caramel.
William Greenberg Desserts in New York City features popular gift bags of chocolate drizzled popcorn at its retail location in the Plaza Food Hall.
John Roeser’s of Roeser’s Bakery often ponders why consumers don’t always recognize the incredible value of paying a dollar or two for a scratch-made sweet good made from premium ingredients at a retail bakery, compared to spending the same amount for a candy bar that was produced in a big factory.
Well, times are changing.
New research from Mintel reveals that three in four (73 percent) consumers are willing to pay extra for snacks made with high quality ingredients, and half of consumers say healthier snacks would motivate them to buy more from specialty snack shops.
With snacking now ubiquitous, 64 percent consumers agree that snacking is necessary to get through the day, including 77 percent of Millennials, who are the most likely generation to visit specialty snack shops.
“Snack shops are in a great position to promote themselves both as a destination for the occasional treat and a quick stop for eating on the go,” says Diana Kelter, foodservice analyst at Mintel. “To further compete with the dominant retail snack market, specialty shops should have pre-packaged options available for consumers, as well as partner with recognized brands to offer branded snack fusions.”
Still, specialty snack shops face stiff competition from others. According to Mintel, 41 percent of consumers agree that packaged snacks from grocery stores are better than items from snack shops, and recognizable brands also play a role when choosing snacks.
Perhaps most notable, 71 of percent Millennials say snacks are best eaten while on the go, signaling the importance of efficient ordering processes at snack shops.
“Snacking is now a staple of the American diet, and as consumers snack more often, they are looking for healthier ways to indulge with high quality ingredients. By including healthier snacks on menus, shops can expand their appeal beyond Millennials, America’s primary snacking generation,” Kelter says.
Innovate and Differentiate
Customization also presents an opportunity for specialty shops to differentiate themselves from retail competition, especially when targeting parents, according to Mintel research. More customizable snacks would motivate 30 percent of parents to more frequently visit snack shops, and a similar number of parents (28 percent) are interested in more snacks with unique flavors.
“There is a movement among parents to expand the palates of their children by introducing them to more diverse flavors that don’t typically fit into a kids’ menu. As this trend gains momentum, customizable and build-your-own menu options are rising to the occasion. This gives specialty shops the chance to differentiate themselves by providing unique snacks that appeal to the entire family,” says Kelter at Mintel.
Deals and value offers are key motivators for consumers to visit specialty snack shops instead of opting for the convenience of retail offerings. Mintel research reveals that snack shops can attract new consumers and reward regulars by offering loyalty programs, which motivate 37 percent of consumers to visit more often.
When unveiling new menu items, promotional pricing motivates 35 percent of consumers, including two in five parents.
“Loyalty programs are important for various reasons. First and foremost, it’s a way to retain satisfied new customers while incentivizing returning customers. As digital loyalty programs advance, it’s also a way for shops to gather consumer purchasing behaviors and preferences. Thanks to the inherent social aspect of snack shops, they have a unique opportunity to focus on the happy hour model to encourage group gatherings,” Kelter says.