MIXING IT UP 2002

ROSEANNE HARPER

Rising costs and a shrinking labor pool are driving a gradual, but definite, shift in the way in-store bakeries source their products, retail bakery executives tell SN.

Helped by advances in technology, products are increasingly brought in finished, or nearly finished, in a system that's boosting quality, consistency -- and sales, they said.

Typically, today's ISB is outsourcing frozen cake layers and finishing them in-store; pulling parbaked breads from ovens; merchandising a national brand of doughnut or pastry; and turning out just a handful of signature products from scratch or almost from scratch.

"It's all about quality. I keep searching till I find the quality I want," said Peter Hejny, senior director, food-service/bakery, for 12-unit Bristol Farms, El Segundo, Calif.

Bristol Farms increased its cake sales significantly when it went from scratch to frozen layers. The same thing happened at Harris Teeter, Charlotte, N.C., when it began bringing in frozen cakes already assembled and iced. In fact, that chain nearly doubled its cake sales with that move, a source at the company said.

Meanwhile, Dierbergs Markets, Chesterfield, Mo., has had sweet success with what officials there call the best doughnut available: Krispy Kreme.

"We're selling as many doughnuts in a day as we used to in a week," said Tom Merritt, in-store bakery supervisor, for the 19-unit chain.

But it's the quality that makes all this work, said Merritt. Retailers, besieged by soaring costs of everything from labor to insurance to real estate, demanded that their suppliers offer finished or nearly finished products that were top quality, and they've come through, Merritt added.

"The quality of bake-off products and even finished products has gotten so good that it would be difficult for a customer to tell the difference from a scratch product."

Dierbergs at one time proudly made its doughnuts from scratch. Then later, it sourced them frozen, and proofed and fried them in-store or at its central bakery. Now, in a partnership that began this past fall, a Krispy Kreme franchisee delivers the branded doughnuts fresh each morning, Merritt explained.

Similarly, Dierbergs simplified its pie production nearly four years ago in a link-up with a regional manufacturer whose branded pies are revered in the area. At first, Dierbergs finished the pies in-store, cooking and pouring cream fillings, and baking off fruit pies. Not any more. Last spring, the retailer took the pie company up on its offer to supply its whole line of pies, finished and frozen, ready for bake-off. That move has pushed Dierbergs' sales of the pies up 15% to 20%, Merritt said.

"We have better control of inventory now," he said.

The shift has been gradual: Five years ago, Dierbergs' bakery operations were 60% scratch; now no more than 30% of production is scratch.

Marsh's Supermarkets, Indianapolis, has also made significant changes in its pie program, a formerly from-scratch program that has been its hallmark for years. While the pie line is still filled and finished in-store, the pie shells, made to the chain's specifications, are brought in frozen.

Although the 69-unit chain prides itself on its in store-made inventory, the retailer is bringing in an increasing number of components frozen.

In a visit by SN to Marsh's flagship store last year, an official held up a focaccia made from frozen dough and said, "You can't find any better at any of the gourmet stores in New York."

And like other supermarkets, Marsh's has taken advantage of top-quality, parbaked breads that are the product of new freezing technology. In particular, the chain was the first in the area to roll out parbaked Ecce Panis brand artisan bread.

"We can take this bread -- it doesn't need to be proofed -- from the freezer and have it on the shelf in 15 minutes," said a store-level source at Marsh.

Bristol Farms, too, which has dropped its scratch production drastically, bakes off parbaked bread throughout the day.

"The changes we've made have all been along quality lines. Some things have gone to frozen dough and some are parbaked," Hejny said.

"Our scratch [production] is geared toward our signature items, things nobody else has. Our Texas chocolate cake is an example. It's rich and moist, smothered in a chocolate, fudgy icing with nuts in it."

Hejny also pointed out that Bristol Farms modifies existing products to give them a custom flair that puts them higher up on the quality scale. For example, the chain makes its lemon bundt cake from a base in a bag but it's not like anyone else's, Hejny said.

"Our pastry chef found a natural flavor emulsion that costs a lot per bottle, but it's pure, high-grade stuff. When it's added to the mix, it gives it a flavor that just comes out at you when you bite into that cake. That's the next thing to scratch."

But the chain's round cakes sell at a faster clip because they can be produced fast with frozen layers.

"That gave us consistent quality and full cases. When we were making them from scratch, the case would be empty half the time, because our associates just didn't make them," Hejny said.

Now they're finished in-store with a specially sourced icing and such class touches as fresh flowers. But cornbread, and sour cream coffee cakes and chocolate meringue cookies fall into the from-scratch category at Bristol Farms. They're specifically designed to differentiate the company's bakery offerings.

Dierbergs, too, prides itself on some made-from-scratch products that set the chain apart.

"Like our Gooey Butter Cake. You can't get that anywhere else, and our stollens and cookies. We can't get the quality elsewhere so we make them at our central bakery or in-store," Merritt said.

And some other chains, big and little, still feature from-scratch baking as a way to standout in the marketplace. Stop & Shop, Quincy, Mass.; Safeway, Pleasanton, Calif.; Kowalski's Markets, St. Paul, Minn.; and V. Richard's, Brookfield, Ill., are among them.

The execution of scratch baking at store level for the bigger chains is so challenging that Stop & Shop, for one, has implemented off-site, standardized training. But for smaller independents like V. Richard's and Kowalski's Markets, from-scratch baking began as a necessity to achieve the quality the owners wanted and then became a point of differentiation.

"We make everything but baklava and cannoli from scratch. Labor's the only drawback and you do have to keep an eye on the product to keep it consistent, but it's worth it," said Liz Little, co-owner of the single-unit , upscale V. Richard's.

"There are some fine [bake-off and finished] product out there, but regardless of how good they are, there's nothing like a fresh, scratch product. And we can react to trends quickly and use seasonal fruits, like for our plum kuchen."

For Kowalski's Markets, the quest for quality led to the company opening its own central facility.

"We did that because we couldn't find the quality of bread and rolls we wanted. That was years several years ago," said Bob Kowalski, vice president of marketing and public relations for the five-store independent.

Now, with a pastry chef on board, the company has made an in-store, from-scratch production of a line of fancy pastries into a customer draw at its newest store, its flagship, in a high-income area of the city. And, ironically, business is so good that the company has begun to source components from its central facility.

"We're running into not having enough time and capacity to turn everything out here. So the central kitchen is making sponge cake for us, and shipping it here. We've been doing everything from scratch right here, but I'd like to get away from that and just do the finishing here. That [the finishing] is what's important to the customer," said Russ Tourville, bakery manager at the store.