Keep doughnut and other bakery product displays full and fresh beyond breakfast for maximum profit potential.
By Marilyn Odesser-Torpey, Associate Editor.
When a client asked convenience store consultant Dean Dirks how he could increase his doughnut sales, Dirks gave him one simple piece of advice: “I told him to keep the display filled with fresh product all the time, not just at breakfast time,” he said. “He did and, as a result, his doughnut sales increased by 30%.”
“It literally costs 10-15 cents to make a doughnut, so even if you throw away 100 of them a day, the cost is only at or less than $15,” Dirks explained. “On the other hand, if you charge $1 for a doughnut and you run out of them, you might be throwing out 100 chances to make $1, in other words, $100.”
The same goes for other bakery items such as cookies. He cited Subway as a foodservice operation that does cookies right because they bake all day and make it a point not to run out of any flavor all day long. “They sell a ton of cookies,” said Dirks, who also spent nearly 15 years as convenience store foodservice category manager.
Dirks explained that if a customer comes in looking for a particular item, say a macadamia nut cookie, and all that is left in the case is a chocolate chip cookie, that customer is likely to leave without making a purchase. If that happens more than once, the customer might decide to take his or her business elsewhere, and that means not only the loss of a cookie sale, but the potential loss of future coffee, fountain drink, cigarette and even gas sales from that customer.
Dirks added that another mistake many retailers make is not paying enough attention to how they merchandise bakery products. Just bringing in doughnuts from a vendor and throwing them in a case is not going to entice customers, he pointed out.
Setting up a nice point-of-sale presentation with some eye-catching signage, including photos if possible, can make a big difference in sales all by itself. “Merchandising bakery products attractively is the number one secret to increasing sales,” Dirks said.
When designing or remodeling a store, make sure the bakery products case is near the coffee. If that is not possible, he strongly recommends at least having some prewrapped grab-and- go bakery products on merchandising racks in the coffee area.
Many retailers make it a routine to discount doughnuts after the breakfast daypart is over, but that’s a habit they should break, he noted.
Not only does it devalue the product, Dirks said, it also makes for inventory control nightmares. Instead, he recommends offering combos with sandwiches, coffee or fountain drinks after noon.
Wide Variety is Key
In two of its 20 locations, Fremont, Ohio-based Beck Oil’s FriendShip Food Stores recently introduced the Sweet Rings doughnut program offered by distributor H.T. Hackney. With this program, the doughnuts come in fully prepped and frozen. Employees take out the number of doughnuts they think they will need the night before to thaw, then run them through the pizza oven to warm them in the morning before frosting and decorating.
“The toppings stick better on a warm doughnut,” said Kevin Bible, foodservice district manager for FriendShip Food Stores. “It takes only around 15 minutes for 2-3 employees to make 3-5 dozen doughnuts in the morning, and they make the store smell great.”
Employees are given free rein to decorate the doughnuts any way they like, whether with glaze, icing, sprinkles, nuts, crushed Oreo cookies, candy bars, even gummy worms. “They really have a blast coming up with new creations—sometimes they even have decorating contests to see who can come up with the most original creations,” Bible said.
The doughnuts are so easy to prepare and sell so well beyond peak breakfast hours that the stores bake them all day to keep the displays stocked. In fact, Bible noted that the stores sell almost as many of the doughnuts from 8 p.m. to midnight as they do during the day, and that customers are coming in at all hours to buy them by the dozen.
FriendShip Food Stores offers five different types of doughnuts: cake, glazed, raspberry filled, Bavarian cream long john, vanilla cream long john, plus apple fritters and cinnamon rolls from the Sweet Rings program. Customers can even get their doughnuts made to order.
“We’re using the oven to make pizzas, subs and breadsticks all the time, so it’s no big deal to do doughnuts,” Bible said. “We tell them, if you have five minutes, we can make whatever kind of doughnut you want.”
Bible explained that the stores using the Sweet Rings program sell more doughnuts than any of the chain’s other stores that get their products from a national name-brand bakery supplier. “These two stores are selling more doughnuts than stores that sell three times the gallons of gas,” he said.
The doughnuts are merchandised close to the stores’ coffee areas in three-by-three-foot, three-tiered counter cases. Colorful case and window point-of-sale materials are provided as part of the Sweet Rings program.
Because the stores already had sufficient freezer storage and ovens, there was no equipment investment required to begin the program. Bible estimates that stores without ovens can buy one for as little as $200.
According to Bible, FriendShip Food Stores is exploring other fresh bakery product options. “Our goal is to become more fresh-oriented; that’s where the c-store industry is going and the people who do it right will win the game when all is said and done.”
Fresh and Ready
La Crosse, Wis.-based Kwik Trip produces all of the breads, buns, rolls, bagels, doughnuts, muffins and cookies they sell under their Café Karuba and Kwikery Bake Shoppe brands from scratch every day in the company’s proprietary bakery. Most of the products come to the stores frozen to be thawed and frosted as needed. Kwik Trip’s Glazers doughnuts are delivered fresh seven days a week.
“Fresh bakery is huge for us; it’s our third largest category next to coffee and hot sandwiches,” said Paul Servais, Kwik Trip’s retail food service director. The company operates more than 350 Kwik Trip, Kwik Star, Hearty Platter and Tobacco Outlet Plus stores throughout Wisconsin, Minnesota and Iowa.
The bakery produces 55 different product SKUs. Every store has a six-foot bakery case for single items and a six-foot table or four-shelf bakery table for multiple packs of cookies, muffins, Danish, brownies and other sweets and The Kwikery Bake Shoppe’s signature breads.
In the morning, most of the sales come from the single items displayed in the bakery case, so that is the first area to be stocked in the morning. The prepackaged items from the display tables sell better in the afternoon.
About 40% of Kwik Trip’s bakery sales come from its prepackaged products. Among the most popular are the one-pound, sliced loaves of white, cracked wheat, honey wheat, Italian, multigrain, sourdough and Swiss rye breads as well as four kinds of buns. The company recently expanded its specialty bread line to include white whole wheat, fiber enriched white wheat and eight grain.
“We’ve been in breads longer than we’ve been in other baked goods and our breads have a strong following,” Servais explained. “Offering loaves of bread goes with our strategy of offering everyday essentials that people need, such as fill-in grocery items, milk, bananas and fresh fruits, cheeses, butter and eggs.”