RBA MARKETPLACE 2001

LYNNE MILLER

LAUREL, Md. -- The rapid development of the in-store bakery over the past 10 years has brought to bear enormous pressures on the department relating to labor, inventory management and merchandising space.

But, as the category matures and the pace of adding to the various bins and cases slows, labor continues to top the to-do list of ISB managers. Without trained help, they're struggling just as much today to keep the merchandisers filled with product that is fresh, appetizing and profitable.

"It's very difficult to make anything," said Peter Houstle, executive vice president of the Retailer's Bakery Association here. "Even if you don't make it, getting bodies in there to pull it out of the box is getting more and more difficult."

SN interviewed Houstle as the association geared up for Marketplace 2001, to be held March 23 to 26 in Indianapolis. The show is expected to attract about 10,000 people -- roughly the same as last year's attendance -- and feature nearly 400 exhibitors. Of those, 10% to 15% are new to the show, according to RBA.

Labor-related issues still present bakery managers with a dilemma: how to keep up that fresh image with fewer employees to make, display and sell the merchandise. Houstle sees ISBs responding by eliminating production at the store level and relying more and more on self-serve formats that may include parbaked and thaw-and-sell merchandise.

While retailers can still make money using these labor-saving strategies, they risk losing customers who count on the supermarket bakeries for fresh and unique products, Houstle said.

"If you keep going down this road, you become McBakery," he said. "People place a lot of value on the concept of fresh. The more you can address that with your offerings, the more you can capitalize on consumer demands for freshness."

Contending with the tight labor market will be addressed in a session for bakery owners, titled "Finding and Keeping Outstanding Employees." The In-Store Bakery Executive Conference will include sessions on building a private label program in the ISB; dealing with OSHA's ergonomics standards; understanding the impact of e-commerce and the Web on the ISB; and launching new products.

In a recent interview, Houstle discussed the show's highlights and the larger issues facing in-store bakeries:

SN: What's new or different at the RBA's Marketplace 2001?

HOUSTLE: We have the Iron Baker contest. It's a takeoff on the "Iron Chef" show [on the Food Network]. The format is different but the idea is much the same. We're trying to create a way to have fun. There's greater variety on the show floor as far as vendors. With the In-Store Bakery Executive Conference, we're taking the tack of trying to take actual retailers and have them talk about what they do.

SN: What will the show's highlights be?

HOUSTLE: We have the Creative [Cake] Decorating Competition. I thought it went pretty well last year. We have more contestants this year and we have a new category, decorative technology.

SN: What do you think are the most pressing issues for in-store bakeries this year? HOUSTLE: One of the new things coming out is OSHA's ergonomics rule. There are some people who have not paid a whole lot of attention to it. The rule itself in some respects makes sense: How do we reduce the likelihood of musculoskeletal disorders like [repetitive strain injury]? If you don't have a problem, it's not an issue. The minute you have a problem, the process you have to go through is pretty complex. The rule has some onerous provisions if things don't go as they should. The ergonomics advisory board is putting together a complete guide for the industry. The In-Store Bakery Executive Conference and the Bakery Owners Conference will address this in their own groups.

SN: One of the show's workshops will cover private label brands. What role can private label play in ISBs?

HOUSTLE: A private label is a promise. It can promise a lot of things. Consistency. Low price. Quality. Or some combination of those things. It looks at the concept of loyalty. If you can build trust with a private label brand, you can build loyalty. It extends the store's identity beyond the center of the store.

SN: I understand it wasn't so long ago that parbaked products were popular, though some people thought the quality left something to be desired. What is the quality of parbaked products like these days?

HOUSTLE: The quality has come up substantially, and it's improved due to demand. It's absolutely going to get better. We're not talking about if; we're talking about when. The downside is the more finished the product is when it arrives at the store, the less it can be customized to create a point of differentiation between two stores carrying that product.

SN: As far as new products or improvements in products go, what are retailers looking for?

HOUSTLE: They're always looking for new and improved and easier products.

SN: How far have retailers come in terms of making their ISBs profit centers?

HOUSTLE: I haven't seen any significant improvement. It's very difficult to take an in-store bakery and isolate it from the rest of the store. You need to look at the ISB as part of the overall store image and how they're trying to position the store in terms of competitors and customers.