BAGEL PROGRAM FILLING RETAILER'S POCKETS

MINA WILLIAMS

A freestanding merchandiser stocked with branded bagels and schmears is helping Bay area retailers rack up sales increases.

The bagel program is from Noah's Bagels, San Leandro, Calif., and involves seven-day-a-week delivery direct to stores, which some northern California retailers picked up as a way to cut out the labor of doing bagels in-house.

But retailers told SN the real boon of the program is the merchandiser, a 7-foot-tall, 4-foot-wide fixture that features four bins on each side with a refrigerated case in the center for cream-cheese schmears.

The retailers said that, given time -- in some cases, the merchandisers have been out for two years -- bin bagel sales have climbed by as much as 25% compared with previous efforts without the merchandisers; and the cream-cheese business is hitting increases as high as 600%, they said.

"The merchandisers are eye-catching units that just scream 'buy me' and give us extra sales," said Kandy Jackson, director of service deli and bakery for Cala Cos., Hayward, Calif. "The merchandisers put it all together, the bagels and the schmears. It snaps into our customer's minds and then we have two rings.

"Before we put in the merchandiser, we did not carry flavored cream cheese. Now that we have added it, not only have our bagel sales been tremendous but the cream-cheese sales have taken off, particularly in the low-fat and no-fat cream cheeses," Jackson said.

Cala typically offers 13 flavors, Jackson said. However, the most popular varieties -- plain, cinnamon raisin, poppy and blueberry -- are constants, while specialty or seasonal bagels are rotated in at the retailers' request. During the recent holiday season, for example, gingerbread and cranberry orange were the featured bagel flavors.

"The seasonal and specialty flavors are nice and they are unique, but the volume is in the core products," said Jackson. "We use the variety items for our regular repeat customer who wants something different for today. Otherwise the plain, poppy, blueberry and cinnamon raisin are the best sellers."

Piazza's Fine Foods, Palo Alto, Calif., was one of the first area retailers to install the display case, about two years ago. "Palo Alto has a high Jewish population compared to other San Francisco Bay-area towns," said Gary Piazza, owner.

"We had bagels before, but now there is the magnitude of variety. Besides the customary bagel varieties, we offer unique schmears such as sundried tomato, garlic and low-fat varieties.

"Our customers like the variety and the fact that they are not limited to a package of six," Piazza said.

Piazza's also carries bagels on the bread rack in prepackaged forms and in the frozen case. "The fresh bagels outsell the prepackaged by far," said Piazza. "It's not even a contest."

Bagels sell all day long at Piazza's, where the service deli will slice, toast and add lox and cream cheese to the bagels. The products are offered open-faced or as a sandwich.

Other area retailers picked up the merchandiser after Piazza's, apparently taking note of the brand strength of the Noah's name.

"The merchandisers were a real smart idea," said Howard Nep, director of deli operations at Andronico's Park & Shop, Albany, Calif. "If we didn't have Noah's bagels, our customers would ask for them. The case has the Noah's name on it, so there is no question what bagels they are."

"All Noah's Bagels retail shops have a good following," said Jackson of Cala. "We knew we had a winner on product and name recognition.

"The in-store merchandisers give customers the same product as they would get in the Noah's Bagels retail shops," said Jackson. "The program means convenience for customers and means sales for us."

The retailers said that in addition to delivering bagels and cream-cheese schmears daily, Noah's cleans and fills the merchandising case, which is an added labor saver.

"It's an easy business for us," said Nep.