MAKING BREAD RISE

BARBARA McDONALD

When commercial bread sales slumped six months ago, then dropped to a negative position three months later, executives at Acme Markets of Virginia became concerned.

They decided to motivate store managers by offering cash prizes for sales increases in the bread aisle. The contest, which began Dec. 1, has so far pulled sales of bread products up by 13%, according to Ed Kolodzieski, president of the 14-store chain headquartered in North Tazewell, Va.

"It's one of those categories that is not very glamorous, but if you ran out, it would quickly become a high priority. Bread is important to our customers and is worthy of our attention," Kolodzieski said.

One of the ways in which Acme is promoting bread is through extensive cross merchandising. For example, Italian bread is displayed next to the spaghetti sauce, while bread and sweet goods -- like honey buns -- can be found in front of the milk department. Small packages of rye and pumpernickel are cross merchandised in front of the deli counter, and doughnuts can be found near the coffee and at the checkstand.

Each week during the contest, Acme sent out a notice to all store managers reporting progress in the bread category. "It's sort of a fun thing to do," said Kolodzieski. Winners were announced at the store managers' meeting, with the first-prize winner and runner up receiving checks for $500 and $250, respectively.

It's easy to neglect the bread aisle, or to take it for granted. Yet the section rebounds when attention is paid to it, as Kolodzieski is discovering.

According to Information Resources Inc., Chicago, the commercial fresh-bread category was at $5.1 billion as of Sept. 20, 1998, a 1% gain over the same period a year before. Private label was the leading "brand," followed by Wonder and Pepperidge Farm.

Retailers queried by SN report that sandwich loaves are still popular, tradeups go to whole-grain breads, and bagels are hot in some markets.

Rural areas like Acme's market tend to be a white-bread, sandwich-bread community, where focaccia or other specialty breads do not move very well. Even some whole-grain breads, retailers say, sell very slowly. Such areas also tend to have home bakers.

The quintessential "white bread" could be Wonder, from Interstate Brands Corp., Kansas City, Mo. A new campaign was recently launched for the brand, reminiscent of the TV commercials that many people remember from the 1950s and 1960s. The update features a character called Professor Wonder, who reprises the well-known "builds strong bodies 12 ways" pitch.

"We were trying to make the commercial a little bit zanier, trying to attract a slightly younger target," said Mark Dirkes, senior vice president of marketing for Interstate Brands.

David Thorp, grocery manager at Food Markets Northwest, Seattle, said that in his region bread sales are growing in small bakeries' products. He estimated that 60% of his stockkeeping units are from the small bakeries.

"Specialty is really big in this area," Thorp said. Prices range from $2.50 up to $3.85 for walnut, olive or rosemary breads, baguettes, Italian peasant bread, sweet potato bread, rye bread and Palouse, named for a region of eastern Washington known for its premiere wheat, he said. Many of the breads sold in his stores are organic, he added.

Wheat-free and egg-free breads are popular, too. "The Northwest has a more developed palate. People really expect the best, and they are very ingredient-conscious," Thorp said.

Breads are promoted in the front, with an end display dedicated to one local baking company, Grand Central. All racks are made of a light wood, which he said highlights the products. Shelving runs approximately 40 feet. The section also stocks cookies, sweet breads and pies.

When legislation in 1994 mandated that nutritional labeling be put on all packaged goods, most of the baking industry also opted to put the food guide pyramid on the packaging. Today, the American Bakers Association, Washington, is supporting the Wheat Foods Council of Parker, Colo., in a nutrition-education program whose goal is to promote the consumption of wheat products.

The Wheat Foods Council is creating merchandising programs to sell wheat foods in retail stores, Dirkes told SN. The WFC and ABA are developing a logo to put on nutritious grain foods, including breads. It will be in a pyramid shape with a banner that reads "Harvest the Energy," said Barbara Scott, communications manager for the WFC.

"Although consumers know that grain foods are healthy, they cannot always identify them. This will help them at the point of purchase, and it ties into the food pyramid, which suggests six to 11 servings daily," Scott said.

Controlled store tests in Atlanta, Kansas City and Alameda County, Calif., of the logo program indicated that it helps achieve significant volume increases in conjunction with a modest educational effort, such as public relations and in-store merchandising, Scott added.

A three-month in-store test will start in mid-March in Memphis, Tenn., with Kroger Co., she said, which will involve shelf-talkers and some educational materials on a tear-off pad. The WFC will also talk to the media about the fundamentals of nutrition, explaining how grains fit into a balanced diet, and ask consumers to look for the logo as a marker for nutritious grain food.

Paul Bernish, spokesman for Cincinnati-based Kroger, declined to comment on the test program.

Merchandising techniques have proven effective in the bread aisle for Bashas' Markets, Chandler, Ariz.

"We merchandise by store for ethnicity or demographics," said Tom Buttes, the direct-store delivery coordinator. "Certain neighborhoods have large families, and buy more white loaves; in other locations, with two-income couples and fewer kids, they go for bagels and whole grains."

Bread is profitable, he said -- probably double the profit of soda pop, and better than milk. Bashas' promotes bread in its monthly Savings Guide, which is mailed in conjunction with frequent-shopper cards. Bashas' bakery and deli departments wrap around a shared lobby space, so they automatically cross promote. "Here, we promote our bakery breads, which brings a better gross for us," Buttes said.

He did not think that packaged breads are hurt by in-store bakeries, since different kinds of people buy different kinds of breads.

New and trendy in Bashas' stores are bagels, which Buttes said "are just going through the roof." He said it is hard to track whether packaged-bread sales are rising, since they vary from store to store and are determined by who is servicing individual units.

"[A sales-force person] may not be keeping up with our needs. If the route vendors are not keeping up, we're losing sales. [Suppliers come into the store] as frequently as we tell them to, but if the route driver is not really paying attention, he'll lose out," Buttes explained. He went on to say that suppliers who own their routes are more likely to notice fluctuations in supply and demand.