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Supermarket bakeries are rounding out their all-American holiday dessert selection with a handful of treats that pay homage to the customs of the Old World -- and south of the border traditions. But no matter which way retailers travel, they're finding a welcome response from customers.In that ultimate melting pot -- New York City -- Morton Williams Associated Supermarkets caters to its Italian-American

Supermarket bakeries are rounding out their all-American holiday dessert selection with a handful of treats that pay homage to the customs of the Old World -- and south of the border traditions. But no matter which way retailers travel, they're finding a welcome response from customers.

In that ultimate melting pot -- New York City -- Morton Williams Associated Supermarkets caters to its Italian-American and Jewish shoppers. Customers stock up on struffoli -- made from scratch -- for Christmas parties, and hamantaschen and rugalach for Hanukkah.

In the Dallas metropolitan area, where the Mexican-American culture is entrenched, Carnival Food Stores serve up pumpkin empanadas, bunuelos and king cakes to their Hispanic shoppers.

In the heartland -- suburban Minneapolis -- Jerry's Foods sells thousands of loaves of yule kage, a sweet, fruit-filled bread that's a Scandinavian Christmas tradition.

Catering to ethnic tastes pays off, industry experts told SN. Bakery department sources noted sales of ethnic products can contribute significantly to overall bakery department sales during the important holiday season.

"In most of our stores, they'll pop up to 15% to 20% -- that's how much they contribute to overall bakery sales," said Shane Keil, director of bakery operations for Minyard Food Stores, the 73-store, Coppell, Texas-based chain, which also operates Carnival, the retailer's Hispanic banner.

With dessert a mandatory part of any holiday spread, demand for bakery treats starts going up during the fall, starting around Halloween, sources told SN. Sales build through Thanksgiving, Christmas, New Year's and even continue through Super Bowl Sunday at the end of January.

That's been the norm. This year, however, could be different in light of the weak economy, which was dealt a sharp blow by the Sept. 11 terrorist attacks. Economic forecasters predict consumers will cut back on spending, and that could impact in-store bakeries. "This year, with the tragedy that's taken place, we don't know", said Keil of the potential effect on sales.

Nevertheless, ethnic baked goods can be a profitable niche, said George Tsokolas, a Chicago-based director in retail strategies for Andersen.

"When they're able to get an ethnic product, whether it's Hispanic, German or whatever -- and price it right, source it right -- they'll do well," said Tsokolas, who believes supermarkets aren't doing enough to serve ethnic customers.

Indeed, big chains have traditionally stocked their ISBs with bakery products that look pretty much the same, regardless of store or market area. But today, retailers like Delhaize America's Food Lion, the Salisbury, N.C.-based chain of more than 1,100 stores, are reaching out to the fast-growing ethnic population. For example, Food Lion now makes fresh tortilla chips right in the store in certain units in and around Charlotte, N.C. [see "Mex Appeal," SN, May 28, 2001].

"We are just beginning to take a look at our product offerings on a market-by-market basis," said spokesman Jeff Lowrance.

Competition and distribution are serious obstacles for the big players, Tsokolas added. Large, conventional supermarkets with employees paid at union scale cannot compete on price with small, neighborhood stores, operated and staffed by family members and their friends, who pay less in wages and sell the product at a substantially lower price, he said.

It's also difficult, Tsokolas said, for large companies to distribute specialty items to a handful of stores in the chain.

"It's easy for a one-store operator to do, and hard for a big chain like Kroger," he said. "They have a huge supply chain. The more mainstream they make an item, the easier it is to sell."

At Morton Williams, ethnic items consistently are responsible for 5% to 10% of total bakery sales during the holiday season, said Richard Travaglione, bakery buyer for the nine-store independent, headquartered in the Bronx, a New York City borough. And while those products are aimed at particular ethnic groups, they can appeal to a larger audience if merchandised with a promotional attitude. Morton Williams encourages shoppers by setting out items for in-store sampling, he said.

"The ethnic people know it's their product," Travaglione said. "Different nationalities have to taste it first. We try to have a sample on the counter all the time.

"You don't have to be Jewish to enjoy rugalach," he said. "It's a tasty pastry."

A Hanukkah tradition, rugalach are bite-sized crescent-shaped cookies with various fillings. They're usually made with a cream-cheese dough. A bake-off item at Morton Williams, rugalach is sold by the pound, retailing at $8 a pound. Hamantaschen -- small, triangular pastries filled with fruit -- are sold in packages, and individually. They retail for $3.49 for a package of 12 to 16 pieces, and $1.50 for large, individual pastries.

"We sell twice as much for the holidays," Travaglione said.

Found in many Italian-American homes, struffoli is a mound of tiny fritters, dipped in honey and covered with sprinkles. "They look like round balls dipped in honey," Travaglione said. "They're pretty."

Morton Williams makes struffoli from scratch, and sells the dessert in one-pound packages at $5.99. Not a strong seller at all stores in the chain, the specialty item does a healthy business at the company's store in heavily Italian Greenwich Village, Travaglione said.

Down South, Carnival stores see sales of pumpkin empanadas spike in the fall. The pumpkin-filled turnovers are sold in self-serve, bulk cases, retailing at three for $1.99. Bunuelos, Mexican fritters tossed in cinnamon sugar -- or fried cookies, as some describe them -- retail for the same price. A version of the king cake, a fixture at Mardi Gras celebrations, also sells well for Mexican-American New Year's celebrations, Keil said. Retailing for $6.99, the 8-inch round cake is a self-serve product, or can be made to order.

Based on their first-hand experiences, bakery supervisors have learned what Hispanics have known all along: They love desserts, and wouldn't dream of celebrating a birthday or major holiday without a bounty of sweets.

"If you're Hispanic, going to the bakery is one of the ultimate joys," said Rosita Thomas, president of Thomas Opinion Research, Woodbridge, Va., who surveyed 1,000 Hispanics nationwide for the International Dairy-Deli-Bakery Association, Madison, Wis.

Aware that Hispanics represent a fast-growing group -- and they're more likely than Anglos to have small children to influence buying decisions -- and also recognizing general appreciation for Hispanic cuisine, supermarkets have increased their selection of Hispanic foods, Thomas said. But from a bakery standpoint, they're not meeting demand, she said.

Keil and company bakery managers have talked about introducing new Hispanic products centered around the holidays, but to date haven't set a timeline for rolling out anything.

As in New York, Anglo shoppers in Dallas don't limit themselves to all-American baked goods. Customers familiar with Mexican cuisine -- either from trips across the border, or to Mexican restaurants stateside -- are willing to buy Hispanic items, Keil said.

One enormously successful Hispanic product is the tres leches cake, an extremely rich, special-occasion pound cake, sold in several sizes, in self-serve cases, but also available made to order. In Spanish, pastel tres leches literally translates to "three-milk cake," since recipes call for making it with heavy cream, evaporated milk and sweetened condensed milk.

It's an established dessert cake in Texas, and a winner at Minyard stores. Tres leches cake is the top-selling ethnic item in the bakery, Keil said.

"It's a wonderful dessert," he said. "We've had it in our company for eight years. Anglos and African-Americans are buying it. It continues to climb" in sales volume.

In the Land of 10,000 Lakes -- scenic Minnesota -- Scandinavian-Americans are fond of yule kage and Danish pastries. Some stores operated by Edina, Minn.-based Jerry's Enterprises sell hundreds of round loaves of the intensely fruity bread during the holidays, and double their sales of Danish pastries, said Darrell R. Mickschl, certified master bakery at Jerry's. In addition to Jerry's, the 15-store chain operates stores under the banner of Cub Foods.

Depending on the baker, Danish pastries can come in the shape of snails, figure eights or bear claws, and are filled with apple, blueberry or cherry, and seasoned with mace and cardamon. Jerry's uses an outside vendor, who makes the pastries according to the retailer's specifications, and delivers shipments of the frozen dough product to the stores, Mickschl said.

They are sold individually in bakery cases, or in packages of four or six, retailing for 85 cents apiece.

Made from scratch, one-pound loaves of yule kage retail for $3.49. Demand for the holiday item varies a great deal from store to store, and tends to be limited to customers with a Scandinavian heritage.

Scandinavian-Americans in the 50+ age group make up close to two-thirds of the customer base at one Jerry's store in Edina, and they're the biggest fans of yule kage, Mickschl said. Jerry's sells the bread year-round at that location.

"Last Christmas at Jerry's in Edina, we sold 1,300 loaves the week of Christmas," he said. "Otherwise we sell 10 to 15 loaves a day." Meanwhile, at a Cub store in Woodbury, Minn., sales of yule kage peak at about 50 to 60 loaves a day during Christmas season, compared to six to 10 loaves a day sold prior to Thanksgiving, he said.

To that end, Mickschl thinks it has the potential to appeal to a larger audience, and plans to step up in-store promotion of the bread in the coming weeks.

"I'll probably have sampling for sure, to get customers accustomed to it," he said.