Cake sales continue to demonstrate growth potential at supermarket bakeries that watch the latest trends and answer shopper demand.
As spring approaches, retailers looking to boost sales in their bakery departments may want to take another look at their cake sales. Cakes are already the top-selling category in supermarket bakery departments, accounting for almost 29% of total sales, according to a recent report by The Perishables Group, a West Dundee, Ill., research consultancy. And excerpts from the report, published in Modern Baking, a sister publication of Supermarket News, indicate that nationally, the category averaged $2,455 per store per week during the 52 weeks ending Sept. 29, 2007, a 5.4% increase over the prior year.
“Cakes are still growing and becoming a more sound and solid part of the business where you can still get a good price point and make some profits,” said Carl Richardson, a Rochester, Mich.-based consultant and former retailer with Farmer Jack and Price Chopper.
The explanation is simple, Richardson noted. Working parents are busier than ever, but that certainly doesn't mean that children's birthday parties, office parties, weddings, holidays, anniversaries and other special occasions are happening with any less frequency.
So, the demand is there. The trick for retailers and bakery department managers is building a reputation among locals as a place that can supply cakes fit for a variety of special occasions. Here, independents and small chains have a distinct advantage, Richardson said, since those that invest in their bakeries can quickly develop programs that offer a high level of customization.
“If you go into many of the major supermarket players, they're going to be more of an out-of-the-box situation,” he said. “They may do a little writing on the cakes at store level. But independents can do as they please, and make an investment in the department if they think they can get a return.”
For the best custom cake programs — those that compete directly with local retail bakeries for high-end business like wedding cakes — one of the biggest challenges is keeping the talent engaged and happy with their work, Richardson noted. And encouraging these highly skilled employees to hone their craft by entering local, state and national competitions is an excellent way to ensure that an upscale bakery program stays on the cutting edge of current trends.
“[Competition] takes you outside of your box and makes you do things that you've never tried before,” said Nyla Stromberg, cake department manager for Market Place Food & Drug in Minot, N.D. “It brings everybody up to another level of decorating when they're competing.”
A baker and decorator for 30 years, Stromberg holds several awards at the state and national level. But she said she's always looking for a new challenge. She and her staff, led by Joyce Tudahl and Carmen Hanson, are constantly checking for new ideas in magazines and on the Internet.
Recently, she spotted a complex new technique in a magazine — a fondant-covered cake embossed with chocolate calligraphy — and set out to learn it. There were some false starts. In early attempts, the chocolate kept melting the transfers. Undeterred, she tracked down and contacted the writer of the related article, who put her in touch with the company that manufactured the transfers, which in turn put her in touch with a decorator skilled in the technique.
“I was just so driven to want to try something totally new,” she said. Her first competitive effort with chocolate embossing took the People's Choice Award last month at the annual North Dakota Grocers Association convention.
Competitive success breeds new confidence at the store level, among both decorators and their customers. Whenever a bride visits with a Market Place representative at a local bridal show, or comes to the store shopping for a wedding cake, she can view the team's latest designs, on display beginning each January, or simply bring in a photo.
“My line to them is that if they see anything on the Internet or in a magazine that they like, bring it in,” Stromberg said. The team can reproduce it, or better still, customize the design.
In addition to the chocolate embossing, emerging design trends that Stromberg is working with include edible prints and images for the sides of cakes, which she said are relatively simple to use, even for beginners in the decorating business. Whimsical designs with polka dots and flowers have been popular among many younger brides, she said. “It's been a really popular look this year.”
For Valentine's Day last week, her cake department was offering a chocolate-enrobed truffle cake, among other options, and Stromberg said she expects DecoPac's new line of petite dolls — featuring characters like Spider-Man and Thomas the Tank Engine — to be a hit at children's birthday parties this year.
“Whenever we see something new, we take it to the next level right away, and get the cakes out there so that customers can see them,” she said.
At the other end of the spectrum are supermarket bakery programs that primarily source pre-decorated cakes and offer minimal customization in-store. But Richardson suggested that bakery department managers at these types of operations could still build their cake business by focusing on marketing programs that emphasize big holidays and seasonal peaks for cake purchases. Mother's Day, Easter, graduation season in May and June, and the Fourth of July, for example, are all good times to get aggressive with early promotions.
“Advertise in advance, lock in your customer in advance, beat the competition with coupons,” Richardson said. “If you lock them in early with a ‘place your order now for graduation’ special, for example, you can lock your customer base in before your competition has an opportunity to. Keep in mind that everybody is busy, everybody wants to just rush in and rush out.”
Understanding local demographics is key to finding the right mix in any supermarket bakery, but nationally, decorated cakes account for 37.1% of supermarket cake sales, according to the Perishables Group report. Dessert cakes and tortes were the second most popular segment of the category, netting 21% of sales; crème and pudding cakes were third with 9.3% of sales; and cupcakes are now fourth, with 8.5%.
Catering to local demographics is a key concern for Tammy Kampsula, corporate bakery director for United Supermarkets in Lubbock Texas. The company's 46 locations are segmented into three different banners — the traditional United Supermarkets, its newer, more upscale Market Street format, and its international Amigos United stores — and Kampsula said that the selection of cakes in each store is geared toward the preferences of local shoppers.
“We really tailor the products to those banners,” Kampsula said. “So, at [Amigos], for example, we have a bigger push on items like tres leches and flan cakes. Also, whipped topping is more popular than the traditional buttercream frosting. At Market Street, we offer more buttercream-frosted, everyday decorated cakes, but we also do a line of higher-end specialty cakes for different occasions, like our Strawberry Bomb. It's five layers of cake with strawberries and whipped cream in the different layers, finished off with whipped topping and fresh strawberries.”
United Supermarket locations lean more heavily on everyday cakes like sheet cakes, layer cakes and cupcakes, but they also blend in the programs from Market Street and Amigos, depending on local demographics, Kampsula explained.
All United locations also feature table cakes, a line that Kampsula said is becoming very popular. “They're not decorated, but they're frosted, and they may be topped with nuts, for example. We do those in a 5-inch size and an 8-inch double layer. We also do a four-count cake slice and individual cake square, so that we can serve smaller families or the ones that want the convenience of the slices. These smaller cakes have been very successful for us. That's really a cake for two.”
Two years ago, United redesigned its wedding cake offering, using a customizable program from DecoPac combined with several popular designs from United's own decorators. Although Kampsula noted that the company's bakeries will still customize anything for their guests, the standardized program helped when United representatives began attending bridal shows in 2006.
Sales of wedding cakes shot up that year by 75%, albeit off of a small base, Kampsula said. The bridal shows have also given United a chance to showcase other services that they can offer for weddings and parties.
“Each store has on display a book of different wedding cake designs, so that is always available to our guests. But we also participate in bridal shows and bridal fairs, and that has really helped get our business going. What we do as a company is at these bridal shows we have our floral department and our food-service department and bakery all join together,” she explained. “So, when people are walking these shows, they can see our total offer.”
Similarly, when customers set up appointments with United to customize their wedding cakes, the bakery works to get the floral department and prepared-food department managers in the loop, so that the guests will also have an opportunity to discuss the company's catering and floral services. “We absolutely do work together,” she said.