Hy-Vee Rises to Challenge With Bakery Makeover

Hy-Vee’s first in-store bakery was installed in 1957, and the retailer has never looked back. Every new store since then has sported a bakery.

All those decades of success, however, can’t shield any department from scrutiny. This eight-state retailer, now with close to 200 bakeries, recently challenged itself to refashion the operation in a way that’s more ideal for today’s shoppers.

The resulting makeover, remarkable in its scope, shows what a retailer can do to accelerate results by further differentiating parts of its business. The overhaul was spearheaded by Tony Byington, a Hy-Vee veteran who was named assistant vice president of bakery operations last year with a mandate to develop a new direction.  

For its efforts, Hy-Vee was named the In-Store Bakery of the Year by Modern Baking magazine, a sister brand to SN under Penton Media. The magazine’s accompanying cover story, by chief editor Katherine Martin, outlined  Hy-Vee’s initiative. Here are a few of my key takeaways on what Hy-Vee is doing to succeed:

• Return to Service: The bakeries aimed to reemphasize service after years of switching to more self-service. The new direction fits in nicely with the chain’s slogan of “A Helpful Smile in Every Aisle.”  Decorators have been given more visible roles, for example, and some artisan breads will be available for slicing in an open-air service case.

• Boost Quality: All bakery products are being reevaluated through a comprehensive quality analysis that includes focus groups and is expected to take about 18 months. The goal includes moving many categories back to scratch baking, which was more prevalent years ago.

• Encourage Innovation: The all-important decorated cake business is boosted by an ambitious annual competition. Store decorators participate in six regional contests with prizes. These face-offs have become an essential part of training because they produce innovation and idea sharing.

• Topple Boundaries: This is my favorite strategy. Hy-Vee realizes that some shoppers don’t enter the in-store bakery, so the chain brings it to them by dispersing these products throughout the store. Iced cookies near milk. Whoopie pies in the meat department. Top-selling desserts in a refrigerated meal-concepts case near checkouts.

Hy-Vee’s moves add up to an impressive differentiation strategy and prove that a strong vision can put an established department on a new course.