BLAINE, Wash. -- Bakery directors should switch their attention from manufacturing to marketing.
So says Ed Weller, a partner in Weller Co., a food marketing consulting firm based in North Hollywood, Calif.
Weller, addressing retailers at a recent conference here, urged them to carve out more time for selling by sourcing some of their products in partially finished form. The conference was a "retail retreat" sponsored by Associated Grocers of Seattle.
"Forget about quality; it's already there. Retailers can now use their time to plan marketing strategies," he told SN last week as he recapped his presentation.
"This is a different age. Marketing and merchandising are everything. Just because you make excellent quality, from-scratch cookies doesn't mean people are going to buy them. Everybody has good quality products these days. If they didn't, they'd go bankrupt in weeks. In other words, you can no longer rely on your sales being OK because your competitor has a lousy product," he said.
He added that it matters very little how a product is sourced.
"Bakery products are all good ones today, whether they're a mix, a frozen dough product or thaw-and-sell," Weller said. He said manufacturers in recent years have poured funds into research and development and, as a result, have not only improved the products themselves, but have widened the tolerance for error in finishing the items in-store, he said.
"For example, five years ago there were manufacturers of bake-off products who were saying that anybody, with no skills whatsoever, could make a great product, but that wasn't true. If it was baked a couple of minutes too long, at a temperature just a little too high, it didn't turn out right," Weller said.
But now there are several minutes and several degrees of tolerance built in. "You can still get a good product, even if the settings aren't right on the mark," he said.
How far should bakeries go to simplify on-site production? Production space, freezer capacity, the availability of labor and the variety of products wanted are all factors that must be considered.
"The truth is that most savvy bakery operators today have a combination of all of them," Weller said. "Even if they're primarily scratch or mix operations, nobody in his right mind is going to make baklava from scratch. It would take all morning and maybe you'd sell three, but such products thaw-and-sell enables bakeries to offer a lot of variety," he said.
"Keeping a display table full also is essential, because nobody will buy the last four pies. They think they're left over from yesterday," Weller said. Thaw-and-sell cakes can often be used to good advantage to supplement a display of scratch or mix cakes.
They cost more, but there's practically no labor involved. Gross margin will be less, but net profit will average out to about the same as for other products, Weller said. Referring to what he calls the "one-third rule," he said that regardless of how done a product is when it's brought in, the supermarket bakery will net about 33%.
"The in-store bakery is a mature market. For that reason, there are formulas that almost always work and other things we know from a history of experience. That's one of them," Weller said.
With quality and profitability per item so unvarying, it's now sales volume that should be targeted, he said. "Volume is essential in order to make an adequate profit."
He urged his retailers not only to spend more time making a sales plan, but to do it further ahead of time. "If you're going to do something different, you have to decide months ahead of time what the product will be, how it'll be packaged, and how you're going to advertise it, display it and get people to buy it," he said.
