By Erin Rigik, Senior Editor
Savvy retailers are diving into bakery programs to entice morning customers who want sweet treats with their morning coffee, as well as afternoon snackers seeking fresh and indulgent goodies.
As both the breakfast daypart and snacking occasions grow in popularity among c-store shoppers, bakery is a smart bet to woo foodservice customers.
Weigel’s Convenience Stores first branched into foodservice about eight years ago. With almost a decade of foodservice experience under its belt, the chain launched a new bakery program in May, featuring three kinds of cookies, glazed and cake doughnuts, filled doughnuts, fritters, Long John bar doughnuts and muffins, all made fresh and all branded under the Weigel’s name.
“We wanted to offer a larger product that was made fresh daily,” said Ken McMullen, president of Weigel’s. “We currently operate a dairy and distribute multiple products to our stores, so it was an easy marketing decision to introduce a bakery program with our premium coffee and dairy heritage, and also the logistics of our stores makes the program a simple addition.”
All of Weigel’s stores are located within a 50-mile radius of its corporate headquarters in Powell, Tenn. To accommodate its new bakery program, Weigel’s opened a new bakery on May 1 in West Knoxville, Tenn. The 6,000-square-foot facility produces the company’s fresh baked products, which are then delivered daily to the stores.
The new program isn’t Weigel’s first attempt at bakery, although it is its first Weigel’s branded bakery initiative. “We had Krispy Kreme deliver to our stores prior to our new bakery program. We felt the need to introduce a signature branded product,” McMullen said.
Today, the doughnuts are branded Weigel’s and are prepared in Weigel’s propriety bakery facility, along with the other baked products.
“The program has been in effect for 45 days, and is performing at or above our projected expectations. We now offer doughnuts in 44 of our 62 locations and plans are to have the program in 54 locations,” McMullen said.
With the program successfully launched, Weigel’s is turning its attention to ways to grow and expand its offering, including plans to introduce new bakery products, including seasonal doughnuts. “We also plan to pre-pack bulk candy, trail mix and other items in our bakery facility and deliver to our stores in the near future. The bakery is another step toward our goal to continue to vertically integrate our company,” McMullen said.
Like all foodservice, fresh is key with bakery offerings, and also one of the challenges of implementing a quality program. While Weigel’s solved the problem with a proprietary bakery facility, the United Family of Stores in Texas leveraged its United Supermarkets and even a local doughnut shop to supply a wide variety of fresh baked goods to its United Express convenience stores.
United currently operates 60 stores under four unique brands: United Supermarkets, Market Street, Amigos and United Express.
“Our bakery offerings in our c-stores vary significantly depending upon location. For example, in cities where we have Market Street stores, such as in Lubbock, Texas, we offer many products from the Market Street bakery, including muffins, cookies, bagels, scones and brownies, along with strudel sticks and twirl rolls,” said Eddie Owens, communications and public relations director for United Express. “Most stores also carry doughnuts produced in the store bakery, although our three Lubbock c-stores carry Krispy Kreme (we have a store here), and our Amarillo-based store carries product from The Donut Stop, an extremely popular doughnut shop up there.”
United Express also offers packaged baked goods alongside its fresh-baked program.
On Aug. 20, a new United Express location is set to open in Hereford, Texas, alongside a new Amigos location. That United Express will carry Hispanic pastries made inside the Amigos stores.
Tandy Arrant, United Express convenience business manager, said bakery has been a steady category for the chain, with sales trending up slightly.
“Having all our c-stores at the same location (or very near) one of our supermarkets allows us not only to provide fresh product continuously, it also allows us to modify our product offerings much more easily according to consumer demand,” Arrant said.
If proprietary facilities and partnering with a local supermarket are out of reach, c-stores can still succeed at fresh bakery. Many bakery suppliers offer an array of frozen dough products and high quality thaw-and-sell options that can be made in store, even at stores with limited space for foodservice production. Area specialty wholesale bakeries are yet another option.
Rutter’s Farm Stores, for example, with 59 stores in York, Pa., uses frozen raw dough for its deli sub rolls. “We stage it, temp it, and bake it in hi-speed convection ovens (without microwaves), and we do that in 45 locations every day,” said Jerry Weiner, Rutter’s vice president of foodservice.
According to the International Dairy-Deli-Bakery Association (IDDBA), convenience-focused couples and families are a strong demographic driving in-store bakery (ISB) sales. And the most frequent shoppers focus on premium products. In-store bakeries are capturing broader food trends to appeal to customers demanding convenient and high-quality bakery products, including snack sizes, indulgent products, ethnic flavors and products, and healthy options.
Fresh is key today in bakery, followed by taste and unique items. Trendy cakes include tortes and cube cakes, and trendy breads include whole, sprouted grain, and those using ancient grains, as well as savory ethnic flatbreads.
Even as customers claim to want more healthful options, healthy bakery product sales are small, but products boasting whole grains and superfruits are showing sales gains, according to IDDBA. Bakery customers are also more interested in foods with added benefits—think omega-3 fatty acids—than those boasting reduced sugar or low fat.
GIVE ‘EM CAKE
If you’re looking to expand your c-store bakery section, cakes and pies could be the way to go, at least according to recent trends. According to a July 2014 report by Chicago-based research firm Mintel International, total retail sales of prepared cakes and pies grew 24% from 2009-2014 to reach $11.2 billion. Frozen and refrigerated cakes and pies, meanwhile, was the only segment to decline (2.4%), as consumers continue focusing on “fresh” and shift towards viewing pies and cakes as an “indulgent snack.”
And convenience stores aiming to capture snack-seeking customers might want to take note. Mintel found that 41% of consumers consider ready-to-eat cakes and pies as a snack to eat between meals, while only 18% eat pies and cakes as a “special occasion dessert.”
In-store baked cakes and pies are driving the bakery category with sales representing more than half of the overall category (52%), followed by shelf-stable cupcakes and brownies at 23%, according to Mintel. Customers also aren’t averse to spending a little more for a better quality product. Some 61% of respondents said gourmet or premium products are worth paying more for, including 72% of those aged 25-34.
When it comes to cakes and pies, customers are craving “hybrid” flavors, Mintel reported, such as sweet and salty or seasonal. Natural ingredients, without additives or preservatives, are also in demand.
Whether it be cakes or pies, natural or hybrid, proprietary or supplier delivered, experts say that bolstering your bakery offerings is a fresh way to turn a profit.
3 Red-hot Tips for Driving Bakery Sales
• Consider ready-to-eat pies and cakes as an indulgent snack option.
• Frozen dough and convection ovens can make in-store baking easy and accessible.
• Fresh is the No. 1 attribute customers demand in baked products.