BARABOO, Wis. — Pierce's Markets expects to sharpen its competitive edge with the opening of a central bakery next month.
Going central will not only create efficiencies but also will give the five-unit independent the opportunity to develop signature products and expand already popular lines, said company officials.
When it has reached its goal of creating a totally from-scratch operation in its new facility, the company will be able to push quality, consistency and profitability to new levels, SN was told.
“We'll go live on March 10, and then our goal is to become a completely scratch operation in the first three months,” said Jeff Maurer, the company's president and general manager. “This will help us compete with the big-box stores. We have a Wal-Mart Supercenter right across the street here, and also at Portage.”
The company is in the process of turning a 5,500-square-foot warehousing section of its 50,000-square-foot Portage store into a state-of-the-art bakery facility that has been dubbed The Walnut Street Baking Co.
The newly equipped facility will supply all five stores with breads, rolls and sweet goods, and also will sell product to commercial accounts.
“There are truck stops all along I-94 between here and Madison, and other retailers that we don't compete directly with [who are potential customers],” Maurer said.
He pointed out that boosting the quality of its bakery products is next in a series of improvements the company has been making in all its perishables departments.
“We'll get the quality. There's no doubt scratch provides better quality than thaw-and-sell or even bake-off,” said Tony Nieto, Pierce's central bakery supervisor.
“It's been my experience that a good bake-off program can get you 2½% to 3% of total store sales, but a scratch bakery can get, on average, 3½% to 4% of total store sales.”
Quality will be the top priority, but Maurer pointed out that adding variety is important, too.
“The big-box stores are limited in the variety they offer. We, on the other hand, will be able to offer different varieties in the lines we already have. Different shapes and sizes, hand-cut, as well as more flavors, and we can develop signature products,” said Maurer. “Cranberry fritters and apple fritters. Strawberry and chocolate chip doughnuts. It'll be obvious our selection is different from what others are offering.”
Popovers and ethnic items such as bollilos and teleras, Hispanic table rolls, are in the new repertoire.
“We're set up to do artisan breads, and I think we can develop some interesting ones. Maybe some Wisconsin cheese breads. Wisconsin is known for its cheese; we could capitalize on that,” Nieto said.
Right now, Nieto and Pierce's bakers and suppliers are working together on from-scratch formulations and will be testing them.
“We're working with the same suppliers. The difference is, they'll be supplying us with raw ingredients instead of finished products,” Maurer said.
Pierce's Markets has been selling a combination of thaw-and-sell, mix and bake-off products in each of its in-store bakeries. Most items eventually will be replaced with scratch versions.
“We want to move slowly, though. We have one chance to be successful,” Maurer said.
The facility, almost ready for action at this point, offers more space and more equipment than is needed to supply the company's five stores.
“In fact, we could double or triple production [without making any physical changes],” Maurer said.
For soliciting outside business, the Portage store is ideally located, he explained.
“There are 40 to 50 small retailers between Madison and Muscodat that we're not in competition with. Even if we were, our philosophy is that independents need to work together to survive the Wal-Marts.”
So far, Pierce's Markets has gotten along quite well in the face of Wal-Mart's incursion over the last five years. The key, Maurer said, was to not try to compete with Wal-Mart on price. Not ever, on anything.
“Instead, we upscaled our perishables departments, bringing in some brands like Black Angus, and a well-known regional brand of deli meats and cheeses. We looked for the best quality we could find in all the categories, and we changed the lighting and flooring and wall covering to highlight perishables.”
Meanwhile, at least three small independents in the area have succumbed since Wal-Mart's arrival. They had continued to lower their prices instead of focusing on differentiation.
“It has been quality, customer service and community service [that has kept Pierce's Markets going successfully],” Maurer told SN.
“We get involved locally, and we give time and talent as well as money back to the community.”
Maurer himself is president of the Baraboo Chamber of Commerce, and the manager of Pierce's Portage store is on the Chamber's board of directors there.
With the company six years, Maurer is a 35-year veteran of the supermarket industry, having spent 25 years at Byerly's, Minneapolis.
Nieto joined Pierce's just a little over a month ago following a long stint at Roundy's/Cubs. He said the opportunity to do scratch baking was undeniably a lure.
The two men expect the company's $1 million investment in the central bakery to begin to pay off relatively soon. Indeed, Maurer said he anticipates that it will break even in about 12 months.
Unlike Quillin's, another Wisconsin independent, which had built a central bakery and then shut it down a few years later because it couldn't turn a profit, Pierce's Markets has all its units near the highly populated university town of Madison, where opportunities for outside business are big.
“The central facility is just about 15 minutes from Madison. There are so many commercial outlets, restaurants, hospitals, and there's the university there.” By contrast, Quillin's, situated in the western part of the state, lies in a much less populated area.
Maurer pointed out, too, that for Pierce, having a large space available inside an existing structure is a big plus.
“If we had to rent or build a facility, it would be a different story.”
In preparation for the opening in March, the company has just contracted with four radio stations, network affiliates, and is already airing spot ads focused on its other perishables departments.
As opening day approaches, the spot ads will focus on Pierce's Walnut Street Baking Company and the variety of product that soon will be available at all Pierce's Markets.
