Thursday, June 28, 2007

Bakeries: Upscale Shopping Experience

Consumers are increasingly amiable to paying more for quality bakery products. Bakers are leading the charge by upscaling product offerings, updating bakery interiors and improving customer service.

The days of the mom-and-pop bakery in every neighborhood are gone. Now, consumers are inundated with bakery products in nearly every shopping environment, from the local gas station to the discount store. Some may worry that this is denigrating bakery products in general, however, enterprising bakers are fighting back by offering unique, high-quality products and charging an equally high-quality price. The result? Consumers are eating it up.

What these bakers understand is that to live up to the expectations their prices raise, the bakeries, as well as the products, have to be a memorable and enjoyable experience. "We are trying to be more customer-friendly," says Jack Elmer, owner of JaCiva's Chocolatier and Bakery, Portland, Ore. "All they have to do is ask, and we will have the answers. We will do anything we need to do to get them the answer."

People no longer want to just buy, they want an experience when they are shopping, says Mark Atwood, owner of Atwood's Bakery, Alexandria, La. He recently moved into a new location, and that "experience shopping" factored heavily into the design of his store. "We tried to style the bakery around some ‘wow' factor. We didn't want untouchable, like lot of copper or marble, but we wanted it to still be pretty," he adds.

Atwood researched the effect colors have on people, and he chose a peachy color called coral beach for the stucco-looking walls and green floors, which evoke a homey feeling. "We wanted people to feel comfortable here for awhile," he says.

A bakery's appearance factors greatly in how much customers are willing to spend. "We can go more upscale with our products because people feel comfortable, but not intimidated. They feel like we are charging a fair value for what they're getting," Atwood adds. "The baking industry is so price-sensitive, but most consumers don't care about price as long as they feel it is worth it. Part of that is the products, part of that is the sales staff. All of it is about making the customer feel good."

Bakery as a night spotWith JaCiva's renewed focus on the customer's experience, Elmer recently extended the bakery's hours on Friday and Saturday evenings for "JaCiva's After Dark." Along with the extended hours, JaCiva's also expanded product offerings to include gourmet coffee and chocolate drinks. During JaCiva's After Dark, the bakery serves fancy chocolates and special desserts. "We are focusing on the things we make already, we were already upscale," Elmer says. While the bakery is only open two nights a week, he plans to eventually be open five evenings a week. "I agreed to start out small, but I think this is going to end up being huge," he adds.

While the longer hours do require additional sales staffing, Elmer is not expecting any additional costs. All of the production will be done during normal production hours with the same amount of staff. He estimates that about three-quarters of the bakery's showcases, including the chocolate case, will be full for the evening customers. Only the breakfast items that are prepared each morning will not be available.

Atwood's Bakery also is open two nights a week to draw additional customers. Atwood plans to keep the night hours limited to Thursday and Friday to help retain the specialness of the bakery as a night spot. The deli does reopen and all of the bakery's products are available, but customers generally want the three specialty plated desserts that are only offered in the evenings. The most popular item recently was a mountainous-looking dessert that featured a scoop of gelato shielded by three brownie wedges and topped with hot fudge, caramel, whipped cream and nuts. Atwood's charges from $3.50 to $6.50 for the desserts, and the offerings change weekly.

"At 5 o'clock, we switch to china and crystal with a higher level of service, no more paper. It lends to a feeling of family and hominess," Atwood says. "We want people to think of this as an extension of their living room. It's easier for them to meet here, and we even clean the dishes."
Upscaling product qualityWith remodeled stores and extended hours, bakery products have to live up to customer expectations, and many bakers are meeting those expectations with upscaled products. "We do upscale our products, but then again, what is upscaling?" says Hans Nadler, owner of Nadler's Bakery & Deli, San Antonio. "Artisan bread is upscaling, but that hasn't taken off in our area. But we are doing more in petit fours and fancy pastries and tortes," he adds. Sales of these items have increased, and Nadler is seeing customers spend more money on products than they have in the past.

Nadler has definitely noticed more demand for quality in decorated cakes. "People want what they want, and they are very particular now. For the most part, they are willing to pay for it," he adds. While the bakery is able to accommodate the special decorated cake requests, he notes that it does put a strain on his staff. The number of people who are capable of doing the fancy detail that customers are asking for is limited, but the bakery has been able to meet demand so far. "It puts a big load on the top personnel in the decorating department, but they are doing it," he says.

Ingredient selection and production processes play a large role in presenting an upscale image. While all-scratch baking is often perceived to be the only upscale route, Nadler found his quality control and product flexibility improved when he switched to mixes for certain items. "Retail bakers can't be the best at everything," he says. "You have to look around and see how others are doing things."

Nadler's had always made peanut brittle during the winter holiday season, but due to its labor-intensive production, the staff usually only made a pan or two. This year, Nadler switched to a mix that still maintained product quality and allowed the staff to make 10 to 20 pans at a time. "We had peanut brittle coming out of our ears," he says. "But customers bought it. When it was packaged, they bought it like crazy."

Packaging completes imagePackaging plays a large role when bakeries are trying to present a more upscale image, and in turn, charge the upscale prices. "Quality packaging helps sell product," Atwood says. For example, products in clear plastic domes will sell, but when those same items are in quality, high-end packaging, bakeries can sell three to four times as much, he adds.

"Packaging is a big word today," Nadler says. He credits some of the sales to the fact that it is very hard to find gifts under $50 that are worth giving. "But you come to the bakery and you can have a great gift for $15 or $20. The recipients can eat it and enjoy it without worrying about finding a place for the gift," he adds. The Internet has been a boon for finding packaging, he adds. It allows him to shop around and find inexpensive packaging that looks great, and by using the Internet to order packaging, he only has to purchase the amount the bakery needs.
One of Nadler's most popular forms of packaging are box towers. He buys the boxes in sets of five with the boxes nestling inside each other, so storage is not a pressing issue.

Although the boxes are purchased in sets of five, the bakery offers the towers in all sizes. "We build towers to order. Some want two boxes, some want three. We can do whatever they desire," Nadler says. Customers also can specify which product they want in each box, such as candies, fudge, peanut brittle or cookies.

"This past Christmas we had a pharmaceutical company that spent $14,000 with us because we had the towers," he adds.

Make accents seasonalWhen purchasing packaging, Nadler suggests staying away from holiday or season-specific designs. Try to purchase packaging that is more evergreen. "You can make it look Christmasy by adding ribbon, but with non-seasonal items, you don't have worry about using them up or storing them until next year," he says.

Nadler's also adds sales by upscaling the packaging on certain items that might not sell well without being packaged. Take for example, the bakery's ring cake, which retailed for $5.99 and did not sell all that well. When Nadler packaged them in plastic and wrapped a bow around them, sales took off, and he charged more, $12.99, for them. "They will buy it wrapped, so they can give it as a gift. They might not want to buy it to take to the office or wherever, but they will buy it for a gift," Nadler says.

Atwood's sells large numbers of finished gift baskets, but the bakery has recently begun offering baskets customers can create to their specifications. Atwood refers to it as global customization. "People want custom products, but you have offer products that are as universal as possible, so you give them choices, but on your terms," he says.

For customized packages, the bakery offers nine different container choices; three wicker, three ceramic and three metal; with each container listing the number of products that it can fit. The bakery products are then displayed nearby, with each product packaged to about the same cubic inch size. Customers select their container and the products to fill it. Atwood also has plastic overwrap bags to fit each different container, so once the customer make the selection, the staff can assemble it in a matter of minutes.

"What it boils down to is making the customer feel good about giving you their money," Atwood says.

Tuesday, June 19, 2007

Krispy Kreme extends its beverage program with frozen Chillers

Its about time they realize that beverages mean profit

Krispy Kreme, the 395-unit doughnut chain based here, is revamping its beverage lineup by adding Krispy Kreme Chillers to its menu. The Chillers are frozen, blended iced drinks, available in two varieties.

The Fruity Frozen Chillers include Orange You Glad, made with tangerine, mandarin and navel orange flavors; and Very Berry, which is a tart and sweet drink with berry flavor. The "Kremey" Frozen blends are Orange and Kreme; Berries and Kreme; Lemon Sherbert; Lotta Latte; Chocolate Chocolate; and Mocha Dream.

Krispy Kreme Chillers are currently available at all participating U.S. locations. The drinks come in 12 oz. and 20 oz. sizes, with the suggested retail prices of $2.49 and $3.49, respectively.
In addition, customers will get a chance to indulge in the Lemon Splash Chiller, which will be available from June 3 to August 19.

Saturday, June 09, 2007

McDonald's threat to Starbucks?

Starbucks Corp., the world's largest chain of coffee shops, may see sales slow as people increasingly turn to McDonald's Corp. for their daily brew, a Deutsche Bank Securities Inc. analyst said Friday.

Marc Greenberg, who is based in New York, cut his target price for Starbucks shares by 14 percent to $32 from $37. He said McDonald's switch to a new coffee blend last year has improved its reputation among consumers.

"The coffeehouse is facing a new world order," Greenberg wrote in a note. McDonald's is "the very last company we would choose as competition" for Starbucks.

McDonald's, which reported monthly sales Friday that rose the most in three years, is selling iced coffee and other specialty brews at some U.S. stores. In February, Consumer Reports magazine ranked McDonald's coffee ahead of Starbucks, saying it tastes better and costs less.
McDonald's coffee has "surprisingly high" appeal, with 35 percent of consumers surveyed by the bank saying McDonald's brew got better in the past year, Greenberg said.

Starbucks spokesman Brandon Borrman declined to comment on the analyst's note. He said Starbucks is focused on giving its customers "a unique combination of premium coffee and an exceptional experience that they can get nowhere else."

McDonald's had 31,677 restaurants in 118 countries at the end of March. Starbucks operated 13,728 locations as of April.

Shares of Seattle-based Starbucks (SBUX) fell 13 cents, to $27.31, in Nasdaq Stock Market composite trading. They have dropped 23 percent this year.

Shares of McDonald's (MCD) rose $1.18, to $51.39. They have advanced 53 percent in the past 12 months, compared with a gain of 30 percent at Yum! Brands Inc., the owner of Taco Bell and KFC.

Wednesday, June 06, 2007

Drinking Coffee Might Stave off Gout

New research indicates coffee drinkers maybe be less prone to an attack of gout, a type of arthritis that causes sudden, severe attacks of pain and tenderness in joints, especially of those of the big toe. This joint inflammation results from an accumulation of urate crystals composed of the uric acid formed from the breakdown of purines, which are found in certain foods, especially organ meats, as well as anchovies, herring, asparagus and mushrooms.

The data from a large-scale study published as Coffee, Tea, and Caffeine Consumption and Serum Uric Acid Level: The Third National Health and Nutrition Examination Survey (Hyon K. Choi, Gary Curhan, Arthritis Care & Research, June 2007; 57:5) suggests that coffee consumption may lower blood uric acid levels. It examined the relationship between coffee, tea, caffeine intake, and uric acid levels, and found that increased coffee consumption is associated with lower uric acid levels, but this is likely a result of naturally occurring compounds other than caffeine.

The researchers based the study on the U.S. Third National Health and Nutrition Examination Survey, conducted between 1988 and 1994, that included blood and urine samples from more than 14,000 men and women at least 20 years old. Their coffee and tea consumption were based on responses to a food questionnaire that assessed intake over the previous month. Researchers extrapolated the amount of caffeine they consumed by using USDA caffeine-content data.

The study found that blood uric-acid levels significantly decreased as coffee intake increased, but the same did not hold true with increasing tea consumption. Serum uric acid level associated with coffee intake of 4 to 5 and 6 cups daily was lower than that associated with no intake by 0.26 mg/dl. In addition, no association was found between total caffeine intake from the beverages and uric acid levels. These results mirrored findings in the only previous study on the subject, which was conducted in Japan. Increased decaffeinated coffee consumption also resulted in lower uric acid levels. These findings suggest that components of coffee other than caffeine contribute to the observed inverse association between coffee intake and uric acid levels, the researchers concluded.

Because another recent study found coffee consumption was linked to lower C-peptide levels, a marker of insulin levels, the researchers in this study speculate that, due to the strong relationship between insulin resistance and elevated uric acid levels, the decreased insulin levels associated with coffee consumption may lead to lower uric acid levels. Coffee also provides significant levels of chlorogenic acid, a strong antioxidant, which may improve insulin sensitivity and also helps inhibit glucose absorption in the intestine.

Friday, June 01, 2007

The Battle Begins

If you haven't been to a car dealership lately, you're missing out. Missing out on everything from rock-climbing walls and video arcades to sugar-free vanilla, skinny, extra hot café lattes. Think Carnival Cruise Line meets Cadillac Man.

That's because the trend, according to Jeff Beddow, Public Relations Director for the National Automobile Dealers Association, has been to renovate and remodel outdated facilities – adding business centers with wireless Internet, children's play areas and most importantly, coffee shops to the showroom floor.

The trend to integrate coffee shops into retail establishments isn't limited to just car dealerships though. Salons, spas, boutiques, even jewelry stores are following suit – moving to an open-air floor plan, adding amenities, like coffee shops, that customers are longing for.

When Patrick Pontiac, an Upstate New York auto dealership, began designing their new 60,000 square-foot facility two years ago, they took the advice of the NADA and added a state-of-the-art coffee bar, complete with plasma screen televisions and lounge chairs.

“The showroom is really centered around the coffee shop,” said Laura Wise, cafe manager at Patrick Pontiac. “It's a huge part of who we are.”

Wise, who brews coffee and espresso-based drinks for hundreds of customers a day on a Fetco Twin Airpot Brewer and commercial super automatic espresso machine, said the owners at Patrick spared no expense on the equipment as well as the set up. And it's paid off, because the overall response from customers is extremely positive. “All the customers seem to really enjoy the new atmosphere.”

The center of the sleek, new showroom clearly resembles your neighborhood coffee shop – someplace to read the paper, work on the computer or just relax and sip a café mocha.
You can do that at the Mirbeau Spa in Skaneateles, New York too. According to General Manager Brent Truax, having quality coffee available for customers is really an additional service. And Truax should know about service, before he moved to the Finger Lakes to manage Mirbeau, he ran the Canyon Ranch Spa.

While the coffee bar at Mirbeau isn't full-service like Patrick Pontiac, it does provide visiting clientele the ability to make drinks they're accustomed to. “Most of our clients during the summer are from New York City,” he said, “and we recognize the fact they don't like to wait around for mediocre coffee.” Truax said the commercial super automatic espresso machines were added last year, giving spa-goers the ability and individual freedom to make espresso-based drinks at will.

International Spa and Fitness Association President Lynne Walker McNees said one in four adults have now been to a spa and know what they want from a quality spa experience. In today's fast-paced environment, where the instant gratification mindset is the norm, consumers are demanding more and retailers are listening.

David Cornell, owner of Cornell's Jewelers in Rochester, New York said part of providing an exceptional experience to customers is making them feel like pampered guests.

“We try to make our customers feel comfortable,” Cornell said. “Part of that is always offering them something to drink, whether it's coffee or tea, it's all part of the service.”

And service, as Will Trafton, General Manager at the Dorschel Automotive Group, will say, is what it's all about. “There's a certain comfort factor that people have grown accustomed to.”
Incidentally, the Dorschel Automotive group is planning a major overhaul of their customer service center – adding an upscale lounge and full-service coffee shop by the end of summer. And while Trafton didn't say the renovations were spurred by Patrick Pontiac's new facility, he did emphasize that dealerships nowadays are evolving.

“People want a comfortable atmosphere. Something they're used to, something they're familiar with,” Trafton said.

So retailers, listen up. If your customers are spending some serious cash on a weekend getaway, diamond tennis bracelet or new car, they're going to want some pampering. Be prepared to indulge your customers, make the buying experience a little better and try integrating any of our commercial machines into your shop. And if you're out there shopping, enjoy the new trend in coffee – who knows what you'll end up buying!