NEW ORLEANS -- During the past decade, the in-store bakery has become an increasingly important profit center for supermarkets, selling artisan breads, gourmet pastries and specialty cakes. But the market is maturing and competition is on every corner.
According to Howard Solganik, president of Solganik & Associates, Dayton, Ohio, ISBs can protect their margins by maximizing the supermarket's existing merchandising power throughout the entire store.
"To avoid losing business to in-store bakery alternatives as well as commercial aisle products," he said, "supermarkets must continue to develop creative products supported by strong merchandising."
He urged retailers to be vigilant in promoting creativity in product development, selection and merchandising; failure to do so will inevitably lead to mediocre supermarket bakery products. This sameness, he said, opens the door for convenience stores, bookstores, coffee bars and bagel shops to literally "eat our [in-store] dough."
"Product and presentation sameness causes customers to view bakery items more as commodities and less as high-quality products," he said. "It also causes them to turn to alternate venues for specialty items."
To that end, he encouraged cross merchandising and cooperation among the departments, citing items such as pizzas and calzones, which may be carried in a deli or meals area, but should be prepared in the bakery where the dough experience exists. In that regard, he advocated the constant promotion of items made in-house.
"Market your store as a brand," he said. "Put your name on the label. The more [customers] see it, the more important they think it is."
Solganik, speaking at the International Dairy-Deli-Bakery Association's annual expo, here, proclaimed the bakery a "building block for convenient meals," due to its functionality as a meal component. Breads, he said, can accompany meals and complete them, and also qualify as the foundation for specialty sandwiches such as panini, subs and wraps made with tortillas, a hot item according to Solganik.
"Tortillas are the next bagel," he said.
In addition to the options bread creates, dessert items can be crafted to complement any meal.
This potential -- using bakery in the total-store sell strategy -- can be better realized if retailers employ category management, said Solganik. He noted that an effective category-management plan is dependent on consumers and competition, as well as category drivers such as prices, labor and assortment, and creative promotions, advertising, and displays.
As they are the messengers of a bakery department, Solganik placed a strong emphasis on the employees. He believes firmly in getting and keeping quality staff members. "Teach them, promote them, educate them, listen to them," he said. "Employee retention is key."
Motivating factors to keep employees happy and productive can vary from competitive wages and benefits to a detailed job description to rewards for good performance, he said. Whatever the method, Solganik said, retailers have realized the benefits of good employees and are taking measures such as these to keep them.
Packaging is vital as well, he said, as it affects both shelf life and customer response. To be effective, it must be multifunctional -- crushproof, leakproof, airtight, resealable -- and allow for product visibility and smaller portions to prompt impulse sales.
Impulse buying, according to Solganik, remains a major factor in bakery sales. Consequently, creativity is a key element in a successful in-store bakery operation. Competition comes in many forms, Solganik said. The department's creativity should as well.
"To stay on top, in-store bakeries need to develop creative products and support them with strong merchandising," he said.
He also stressed the competition that arises via the commercial bread aisle, an area not to be ignored. According to Solganik, variety among commercial products is rising and the quality is improving as well.
"Commercial labels now offer slice and bake, frozen dough, homestyle, and brown and serve," he said. "They are offering great variety and the in-store bakeries are not keeping up."
Creativity carries over into marketing as well and one target market Solganik labels as a consistent success is the kids' market, especially where cookies are concerned.
"Kids and cookies are a match made in heaven," he said. "You can stimulate sales with kid-friendly promotions."
Suggested merchandising ideas were: create a kids' cookie club, install kid-size stairs providing tiny customers with a clear view of bakery case items, host a cookie-decorating contest, and offer children's activity books. In particular, he cited Stevens Point, Wis.-based Copps Corp. where children are given a coloring book and receive a free cookie when they return with a colored picture.
Another, newer way to promote the in-store bakery's wares is on the Internet. Solganik said many bakery departments are not taking advantage of their potential inclusion on their store's Web site. Some retailers, like Dayton, Ohio-based Dorothy Lane Market and Dean & Deluca, headquartered in Manhattan, have already begun this advantageous practice.
"The Internet allows customers to place orders 24 hours a day, seven days a week," Solganik said. "It's low-cost advertising and should be taken advantage of."
In the end, quality, variety and creativity will prevail, and in-store bakeries need to seize the opportunity they have to provide these things, he said.