RBA '99

ROSEANNE HARPER

MINNEAPOLIS -- The in-store bakery can heat up customers' interest in meals programs and even keep them coming back day after day.

That's what Brian Salus, president of Salus & Associates, Midlothian, Va., told attendees recently at the Retailer's Bakery Association Marketplace '99 Convention and Exhibition here. He conducted a seminar for in-store bakery executives that focused on the ISB's role in meals solutions and its role as a messenger of "fresh."

Salus used videotaped interviews with supermarket executives across the country to punctuate his presentation and bolster the premise that bakery holds the keys to revving up a store's fresh image and to making its meals programs attractive.

As Salus put it, the fresh bakery "can provide soul or character to any meal solution," getting the consumer's attention with freshness and also providing a point of difference. In addition, freshly baked bread, for example -- because of its short sell life -- tends to bring customers back into the store several times a week, said one retailer interviewed by Salus.

"Artisan breads build frequency, bringing customers back four and five times a week to get bread that is at it's best for only one day," said Phillip Nabors, co-owner of Mustard Seed Market & Cafe, a natural-food retailer in Akron, Ohio.

And Salus pointed out that a warm loaf of wonderful-smelling bread can be the component that breathes life into a takeout meal comprised of a chilled entree and chilled sides or salads.

"If you're not baking fresh bread for the evening meal, you're missing an opportunity. It's hard to smell a can of green beans, but the bakery can play to all the senses and that's what we're seeing at the fresh meal markets," Salus said.

Just prior to the RBA event, Salus and Bob Bowers, president of Absolute Post Productions Inc., a Canton, Ohio, television production company, traveled the country and talked to retail executives and videotaped their operations.

The companies represented in Salus' seminar include Mustard Seed Market & Cafe; West Point Market, Akron; Balducci's, New York; Marche Movenpick's Boston operation; Draeger's, Menlo Park, Calif.; Mollie Stone's, Mill Valley, Calif.; and Whole Foods Market Inc., Austin, Texas.

At those stores, bakery plays a direct meals role by providing freshly made products such as bread and desserts to supplement the meal; main course items such as focaccia, quiches and calzones; and centerpiece items for special occasions such as decorated cakes and fancy pastry trays.

The bakery, with its signature products and freshly baked bread, also can bring potential meals customers into the store, Salus pointed out.

At West Point Market, the bakery turns out a whole list of signature products that has made the store a destination.

"Here's a retailer determined to not get caught in a sea of sameness," Salus said. On tape, West Point Market's owner and president Russell Vernon underscored that.

"Our mission is to build the brand we call 'West Point Market' and that requires differentiation. We're doing it with signature items that can only be had at West Point Market, such as Killer Brownies, sugar babies, raspberry-chocolate suicides," Vernon said, as he rattled off a list of catchy-named bakery items that are West Point's own.

The owners of Mustard Seed Market & Cafe, located just down the road from West Point Market, also believe in bringing people into the store with signature products and, above all, sending them away satisfied with the hallmark freshness of its products. Philip Nabors and his executive chef and chief baker explained how departments work together at Mustard Seed to ensure everything is as fresh as it can be.

The bakery makes products for Mustard Seed's deli, the cafe and for off-premises catering as well as for itself. Ninety-nine percent of Mustard Seed's bakery items are made from scratch on-site, Nabors said.

The opposite is true at Balducci's, the industry-watched specialty store in New York, but that doesn't mean freshness isn't the top concern there, too. The qualifying factors for an outsourced product: top quality and freshness. Salus interviewed Alan Butzbach, Balducci's vice president of operations, on tape.

Butzbach explained that Balducci's winning strategy is simply to bring together "the best of the best under one roof."

"We're like a small supermarket, but we carry only top quality. We get daily deliveries from 30 to 40 bakeries, including EatZi's.

Richard Draeger, co-owner of Draeger's Super Markets, pointed out that location in the store and focusing on one segment of the bakery are both important elements.

At its newest store in San Mateo, Calif., Draeger's has brought the bakery up to the entrance and paired it with a coffee bar. The coffee bar, Draeger explained, adds theater. None of the bakery products are made on-site, but they're delivered as often as two and three times a day from the company's central commissary.

Draeger advocated focusing on just a few food categories.

"Look at Starbucks. We [in the supermarket industry] gave them the opportunity to do what they've done, but we can get it back by boosting the quality of our coffee and providing more and better baked goods," Draeger said.

"The idea is to sell a lot of a little. And it many cases, it makes sense to build partnerships with other quality bakeries," Salus pointed out.

Mollie Stone's, and Movenpick Marche, both of which -- like Draeger's -- have positioned bakery upfront, make a point of showing off freshness by spotlighting open production.

"I've been a proponent of selective open production, but they're doing it all in the open. There's no behind-the-scenes storage space," Salus said.

On the videotape, the manager of Marche Movenpick in Boston could be seen working right alongside the bakers in the production area. At Mollie Stone's the visual impression was much the same.

"We make our own pesto and all our own toppings [for pizza and focaccia]. We roast our own garlic and marinate our own mushrooms," said head baker Jerry Hermeser. .

Salus pointed out that the location of the in-store bakery has a huge effect on sales.

"Look at Eatzi's. Fully 80% of customers who go to EatZi's leave with something from the bakery. That's because it's in your face."

Salus referred to the layout in EatZi's, which brings customer traffic right through the bakery production area first. At the New York City EatZi's, bags of flour are stacked at the entrance and the first action seen is associates taking items from the bakery's ovens. Salus advised supermarket bakery executives to fight for location in the store.

While all the activity in-store is an attention-grabber, continuous replenishment is also necessary to drive sales and turn profits, Salus pointed out. In that regard, a central facility such as Draeger's can be key, he said.

"At Ukrop's, when we went to central production, our sales of [dinner] rolls went up 30% [because there were no out-of-stocks]," said Salus, who was food-service director at the Richmond, Va.-based Ukrop's Super Markets before he left to start his own business. Supplementing production with top quality items sourced from outside is also a way to keep displays full -- and to add variety, Salus said.

"One of the broadest selections of breads I've seen was at Whole Foods [at one of their San Francisco stores]. While the small companies know they need to differentiate themselves, Whole Foods with 150 stores does a good job of it too."

Salus pointed out that Whole Foods succeeds in offering its immense selection of freshly baked breads by using a combination of upscale bake-off products from Los Angeles-based Le Brea Bakery and other vendors.

Salus summarized his recommendations, based on information gleaned recently from successful retailers, like this: segment your bakery products, specialize, provide some main-course meal products as well as products supplemental to meals, fight for location in the store, size products to fit the market, and don't play the price game.