ALL LIKE IT HOT

Lynne Miller

Fresh-baked, hot bread programs have emerged as one of the defining characteristics of proactive in-store bakeries, retailers and industry observers told SN.

There's nothing quite like the aroma of fresh baked, still-warm bread to inspire consumers to pick up a loaf -- even if bread wasn't on the shopping list. Operationally, hot-bread programs can be profitable without being difficult to execute.

Retailers interviewed by SN said their programs are moneymakers and not terribly labor intensive. Hot bread prompts impulse purchases, and also inspires consumer loyalty, sources said.

"We have stores that have to bake it four to five times a day," said Roy Osborne, bakery sales manager and merchandiser for Penn Traffic, Syracuse, N.Y.

A good program can increase the frequency of customer visits, noted a marketing consultant who works with independent supermarket companies and other businesses on competitive strategies to increase customer traffic and profits. Unlike other products, he said, warm fresh bread conjures happy emotions and nostalgia in consumers who rarely, if ever, bake their own.

"In Florida and other areas with aging consumers, this is a walk down memory lane," said Jon Schallert, president of The Schallert Group, a Sorrento, Fla.-based retail marketing consulting firm. "A system that uses fresh baked bread, baked at regular times of the day, can attract customers like bees to honey. It's that kind of specialty product that keeps people coming back."

While some operators conduct well-known, established promotions every day, what surprises Schallert is that there are some who still do not do anything.

"I think a lot of super-markets think the way to a customer's heart is through price and product selection," he said. "They don't think about creating emotional attachments. Lots of consumer surveys have shown price is not the motivating factor. For many consumers, they will pay extra to have that experience."

Retailers with formal programs promise consumers that hot bread will be available at designated times -- such as the late afternoon hours around dinner time. To serve them, associates must adjust baking schedules, and this can be a challenge for bakers, who tend to be morning people, sources said.

Promotion is key. Retailers said they use signs in the stores or the public address system to call attention to the hot bread. They also make a point of bagging the loaves in full view of customers. Some retailers offer guarantees that the bread is free if it's not hot. Many set out warm loaves of bread near checkout lines, in addition to in-store bakery displays.

Penn Traffic's program, launched about a half-dozen years ago, has propelled Italian bread to signature status, not only in the Northeast, where Italian bread is perennially popular, but at the retailer's stores in the Midwest, too. When associates rolled out the program, they did not introduce a new product, just a new marketing strategy.

"We had the product," said Osborne, who spearheaded the program. "[But] we weren't telling the story to the customer. We weren't promoting ourselves, what we were doing."

In circulars, on store signs and on the bread bags, stores highlight hot bread, baked fresh at 8 a.m., noon and 4 p.m. every day. If the bread's not hot at 4 p.m., it's free. Any loaves baked at 8 a.m. that remain on the shelves at noon are pulled to make sure consumers get only the freshest bread. The same thing happens at 4 p.m. to bread baked at noon, Osborne said.

Stores display the bread in the bakeries and in wooden racks set up by the checkout lines. The company purchased special paper bags with windows with perforations to handle the hot loaves.

That Italian bread could become a favorite in areas like Columbus, Ohio, where Penn Traffic operates the Big Bear stores banner, really surprised Penn Traffic's vice president of in-store bakeries.

"Our Columbus market is a baguette or French bread market," said Mike Duncan, who oversees the bakery division for Penn Traffic's 212 stores. "Because of the overwhelming success of the program, Italian has surpassed French and baguettes. Now our Italian bread is our No. 1 mover out of the warehouse."

Associates use a raw frozen bread product, which they proof and bake. All loaves are hand split before baking and, to achieve a crispy crust, with soft texture inside, breads are baked in steam-injected ovens, Duncan said. Depending on the market, the bread retails for $1.19 to $1.39 a loaf.

"It's the closest thing to scratch you can get," he said, adding the company has seen sales increases each year for the last four years. "Italian bread started out at less than 1% of the total bread category. Now it's 3.5%."

The program offers another benefit -- very little shrink. Italian bread can be converted into other products, such as mozzarella bread or garlic bread, which, while no longer hot at the time of purchase, are still fresh. Customers are also looking for dinner ideas, so it's a no-brainer for store associates to promote the bread with natural partners, like pasta sauce and sausage.

"It's an industry fact 85% of all customers who come into the store don't know what they want for dinner," said Duncan.

On the other side of the country, New Seasons Market operates the only certified organic in-store bakeries at three of its four stores in the Portland, Ore., area. The hearth oven bakeries in the 25,000-square-foot stores do a brisk business selling artisan breads. The chain recently added a 4 p.m. bake to the daily hot artisan program to cater to after-work shoppers. To add the baking cycle without adding cost, lead baker Debz Briske formulated a crusty, Italian-style bread using a minimal amount of yeast to ensure a slow rise. The dough is mixed at 6 in the morning, and formed about two hours later, she said. The small amount of yeast means the bread proofs slowly. Bakery associates crank up the ovens around 3:30 p.m. to bake the bread in time to sell it hot.

"It didn't require reorganizing schedules," Briske said. "I didn't want to incur any extra cost by changing schedules. It's never profitable to make one batch of dough in the middle of the day, out of sequence. We worked it into our mix and table schedule and make the dough work for us. We didn't increase any labor or make the bread less profitable."

At first, the idea of baking bread late in the day caused associates to raise their eyebrows, she said. But before long, they worked out a new, manageable system. Stores have seen steady increases in sales, Briske said.

To let customers know hot bread's for sale, demonstrators offer samples at a designated "solutions area" near the checkout lines. A taste of warm bread is a welcome treat for the after-work crowd.

"When they come in tired from work, customers say it smells so home-like, after a day of being in a very un-home-like space," said Briske. "It's a great boost to the ambiance of the store to have the smell of baking bread. To me it shows a certain amount of caring about our customers."

Having a hot artisan bread program helps the small, three-year-old independent compete with bigger area chains, including Wild Oats Markets. The program also inspires loyalty, Briske said.

"The Orenco Station store has a shopper who calls to make sure it's out of the oven," she said. The bread "is developing a loyal fan base."

Hot baguettes fly off the bakery shelves and disappear from the bread baskets set up at checkout lines at Lunds supermarkets in the Twin Cities. In fact, some of the larger stores have sold up to $400 worth of warm bread in a night, said Paul Supplee, bakery director for Lund Food Holdings, the Edina, Minn.-based parent company operating 20 Byerly's and Lunds stores.

Some stores promote the bread with bright red cardboard signs, "Caution: Hot Bread," posted on the baskets. Other signs let consumers know warm bread is available between 4 and 6 p.m. In fact, the signs were a key part of a concerted effort by managers and associates to market the hot breads over the last two years, Supplee said.

Scheduling staff to handle late-afternoon baking was the only challenge, and once associates saw the strong results, it was no longer a hurdle, Supplee noted.

All retailers SN talked to plan to expand their programs. Penn Traffic officials intend to offer a greater selection of warm breads and rolls from 3 to 7 p.m., while Briske at New Seasons is exploring other products that could be added to the late-afternoon lineup. Supplee plans to extend the program to the Byerly's stores.

"Why more [retailers] don't do it, I don't know," he said. "It seems like a no-brainer when you start to think about it. It's hard for people to resist hot bread."