Panera Bread paved the way for bakery cafes to learn how to be profitable. Today’s retail owners are reinventing the bakery cafe experience to be exceptional.
From b. patisserie in San Francisco, where they offer Chocolate Caramel Toffee Mousse and 10 Hour Apple Tarts, to Amy’s Bread in New York City, where they specialize in Semolina with Golden Raisins and Fennel, Chocolate Sourdough Twists and freshly baked pizza by the slice, the menus of America’s top bakery cafes are going above and beyond to create a culinary experience like no other.
“We source our quality ingredients the same way we buy groceries for our families — using only natural ingredients, with no artificial additives,” says Amy Scherber, owner and founder of Amy’s Bread, now with seven locations. “Our goal is to delight our customers with a wide range of products — some are healthful and some are indulgent. All of them are treats.”
At Europain 2018 in Paris, bakers and chefs offered a glimpse of what may come next: open-faced artisan breads topped with melted gourmet cheese, sausages and fresh fruit slices, as well as uniquely flavored pastries and dessert cakes that offer customers globally inspired delights made with locally sourced ingredients.
The European influence
In France, “one in four visits are to a bakery or sandwich store,” says Maria Bertoch, foodservice industry expert for NPD, noting eating away-from-home habits from the firm’s Crest consumer consumption data. “That’s an incredible amount of consumption in this mature market.”
In France, she added, snacking — especially in the late afternoon — is driving the number of visits to boulangeries and sandwich shops. “People want a pastry or croissant around 4 p.m.,” she says. The number of Europeans who visited bakery shops rose slightly — about 1.4% — in 2017, according to The NPD Group. France led Europe in the number of bakery visits. About one-quarter of commercial restaurant visits were to bakeries, followed by Germany (15%), Great Britain (11%) and Italy (6%).
Bertoch discussed “Trends and Growth of European Bakeries” during Europain, which took place Feb. 3-6.
As far as time of day, an increasing number of people shop at a boulangerie for breakfast as “take away from home” becomes more frequent in the morning. While visiting bakeries in the afternoon rose slightly, few people stop at bake shops for dinner.
Bakeries, she added, are quite popular among millennials because they offer traditional, high-quality fare at an affordable price.
An emerging trend involves “click and collect,” where consumers order sandwiches or meals online and then pick them up at a nearby bakery/cafe. Bertoch said it’s most popular in Great Britain, where many time-pressed workers only get 30 minutes for lunch. She called France an “untapped market” because only about 3% of the population orders online.
“Digital will probably be a big revolution in the future,” she said.
The Hispanic influence
In Southern California and across America, Hispanic culinary traditions are having a profound impact on the landscape of the bakery cafe sector.
“Ethnic foods and ingredients are now becoming mainstays on menus, none more so than from Latin countries,” according to a new Technomic report. “But more and more, operators are looking to the next new Latin ingredients to add to menus.”
Prior to opening Tropicana Bakery & Cuban Café in 1999 in Los Angeles, Melvyn Madrazo Sr. introduced the idea of a restaurant that would serve rotisserie chicken that would be prepared both Cuban-style and Mexican-style. After discussing the idea with his wife and children, the beginning of a long-term family collaboration began.
The Madrazo family business evolution began with the creation of Los Pollos, a restaurant that opened in the early 1990s. The Madrazos created a unique marinade that contained both Mexican seasonings and Cuban citrus-style mojo. It was this Madrazo marinade that formed the signature dish at Los Pollos. From the outset, Melvyn’s vast experience as part owner and vice president of production for a large emblem manufacturing business with over 300 employees served the family business well. Los Pollos was a success, and growth was soon to follow with the opening of multiple locations.
“The chicken is incredibly good,” said Miguel Madrazo, who is one of three sons helping manage the family business. “The underlying theme is a cross cultural fusion of flavors: both Mexican and Cuban.”
Miguel Madrazo points out that America is in the midst of a resurgence in appreciation and interest in hand-crafted foods. “Quality is really making a resurgence,” he said. “People want craft and quality. It’s worth it to them to pay a little more. And food fusion has a taken on a new contemporary presentation of traditional items.”
One example of this fusion approach involves traditional Napoleans, a classic French dessert that Tropicana makes with several twists. They make a Cuban version of Napoleon with vanilla custard and lemon meringue, in addition to another version with tiramisu.
On the savory side, their signature Tropicana Bowl is made with plantains, black beans, shredded spinach, diced avocados and whole grain rice.
“We’ve incorporated traditional Cuban foods with more California ingredients and non-traditional presentation,” Madrazo says.
In addition, they chose to work with a local roaster to create their own distinctive coffee blend. “A lot of Cubans put a lot of sugar in their coffee, but we decided to go with a great coffee that you don’t have to smother in sugar. We had a mindset and willingness to explore new ideas. We started experimenting with Latin American coffee beans and came up with our own coffee. We were going for a unique micro roasterie with Latin American coffee served Cuban-espresso style.”
The coffee factor
Beverages continue to be a driving force for bakery cafes because of surging demand for the coffeehouse experience.
As one bakery café owner and speaker at Europain pointed out, “it’s easy to increase revenues by 10% to 15% with a coffee machine. For business purposes, these coffee drinks are high margin items.”
New research from Mintel reveals the US coffee house market continues to experience healthy growth with sales reaching an estimated $23.4 billion in 2017, a growth of 41 percent from 2011.
Mintel forecasts coffee house sales will reach $28.7 billion by 2021. The boom in new coffee shops entering the market is cooling down.
“The coffee shop market is benefiting from shifting consumer interest in more premium, albeit pricier, coffee drinks such as specialty coffees, cold brew coffee and third wave coffee. However, the number of new coffee shops hitting the US market is slowing, indicating sales growth is coming from increased consumer expenditure on these more expensive beverages rather than unit growth and expansion,” said Caleb Bryant, senior foodservice analyst at Mintel. “We expect to see coffee shop sales continue on an upward trajectory over the next five years.”
Valuable insights applicable to the bakery cafe segment can be gleaned from new reports from a collaboration between The J.M. Smucker Company and Technomic, which are designed to provide the latest consumer and trend insights.
With regard to coffee, it is valuable to recognize that traditional coffee is the most purchased coffee type among consumers today. However, more individuals are also showing interest in seeing a greater variety of coffees at foodservice locations, including those that feature new brewing methods and flavors, according to the reports. Since coffee remains deep-rooted in consumers’ daily consumption habits, operators are innovating more around this beverage than ever before to broaden appeal and increase traffic.
What to expect next
US foodservice industry growth may be slow, but there are certain changes taking place that will help to move the industry in a positive direction, says The NPD Group, a leading global information company. NPD forecasts flat to sluggish traffic growth for 2018, but the trajectory could change, according to NPD restaurant industry analyst Bonnie Riggs. Focusing on what consumers want will help foodservice marketers better align their strategies to maximize their relevance in 2018 and beyond, Riggs said.
In 2018, foodservice consumers will be more strapped for time, given that the demand for convenience is growing exponentially, similar to what we saw in the ‘80s and ‘90s. With growth in the number of women entering the labor force (U.S. Bureau of Labor Statistics), the need for convenience will only grow stronger, especially at dinnertime. It is not that consumers don’t want to cook; they are looking for someone else to do the cooking for them or to make it extremely easy for them to do so at home. As a result, delivered meals will be a source of growth, along with other convenient meal solutions.
Mini entrees billed as snacks are the current hot-ticket item on many top chain restaurant menus, according to the new reports from The J.M. Smucker Company and Technomic. Why? Not only has snacking consumption increased, but 27% of 18- to 34-year-olds even say they like to purchase snacks at restaurants instead of full meals. Plus, a notable 59% of consumers say it’s very important that snacks aren’t too large, which is higher than the proportion who say it’s important that snacks aren’t too small (49%).
In addition, consumers will order digitally, via text messages and mobile apps, both of which have posted strong growth in 2017. If you’re a restaurant operator seeking to gain more visits and grow your bottom line, you must decide which convenience-enablers are worthy of your investment. One size does not fit all. It will be imperative to understand your customers’ wants and needs from a technology standpoint. Consumers will also expect excellent customer service, even though the labor pool is shrinking and shrinking fast. The foodservice industry is known to have an extremely high turnover rate. Having an employee retention program in place is a must going forward, and it should be one that includes a process for recruiting, hiring, and retaining employees.
