What do you think?

I have a several questions all on the same theme: I'm considering doing my own thing as a cake decorator and I really want to know other peoples opinions.

1. I've spent sometime lately looking at bakeries in my Chicagoland area. I've come up extremely dissapointed with the quality I've seen. First, in the City at least 70% of all the bakeries are Spanish (not that that's bad) but why are their so few American or European shops? I printed out a list of bakeries to visit thru digital city.com and MANY businesses were no longer in business.

2. I'm rather shocked at the market price for pastries. I think their low, too low. The pricing is what squeeze's most bakeries out of business or do you think it's a quality issue? Unless you have alot of dollars to complete, the big bakeries that dominate the market do so because no little baker can afford to offer such a big product line at prices that would be so close to cost for the little guy. Wrong or right?

3. I talked to several country club managers inquiring about their pastry needs. The consensis is, they need good product and have a hard time finding it. Then they tell me their ceiling is $22. for their high end items. While out of their other cheek they brag at how ellite their clientele is. I'm wondering what all you chefs out there (who buy in) pay for your pastry items???? Someone shot me the figure that he charges his members 3x his cost on purchased desserts. In the retail business 2x is standard mark up. 3x only makes sense to me when your incurring labor making the item, I don't get the profit structure there?

4. Why are all the big name cake designers in NYC? I can't find a "name" in Chicago for who's good. Are the rich people not spending it on dessert? I think Ben Isreal is in CA but don't any other large cities have the demand?

5. All of the clubs make the client find their own wedding cakes (even clubs with pastry staffs don't do wedding cakes). Another thing I don't understand is: Why don't they have a network of designers and at least make the intro.s for the members. Instead of loosing money for a dessert, why don't they make a profit on it? It's another hassle, yes but all they have to do is provide an intro and sell through them, no?

6. Why are people willing to spend small fortunes on floral centerpieces at their parties and not care about quality in their desserts? Neither last and both can be dazzling? I tend to believe no man remembers the flowers but they all remember the dessert. Yet the women party planners don't sell to men, why not? Or, is no one doing any dazzling desserts?


This isn't a grip list, I really want to know what other people think? This will help me understand what I'm facing if choose to open a business again. It's like a dessert waste land in my area. I'm trying to figure out why. Has the price not matched quality? Have we driven away our clients? What do you think?

 

I'm scared to re-read my original post, just look at the time when I posted it (that should explain a little).

Anyway I am evaluting several things (trying to figure out what I should learn from my exploration) so my mind is scattered and trying to sort out a couple things.

I'd love to own my own bakery. BUT I don't personally believe it's a wise business to open in MY area. WHY? I'm not totally sure I have my facts right (that's why I'm asking for HELP), but as I see it, the reason there are so FEW bakeries is a combination of several things.

A. You must sell in volume to compete with the prices already established by wholesale and (the surviving) retail bakeries. You'd need a good sized staff and kitchen to complete with the big guys. As reference look at one our biggest Chicagoland bakeries www.deerfieldbakery.com , I couldn't possible sell anything that cheaply (granted, their not quality).

B. Using rough numbers (from my experience selling retail) I figure 1/2 of my price is profit and 1/2 of my price is cost. (For example) If people will only pay 12 dollars for a pie and a restaurant or club will insist they have a 3x mark up that means the pie maker has to sell it for (something like) 3.25 per pie. Spilting that in half means I have to produce (my costs should be at) that pie for 1.62 and my other half leaves me a profit of $1.62. That's not worth the effort, UNLESS you sell big dollar items and in volume. Using that mark up across the my whole (imaginary line of products) I couldn't afford to sell wholesale, they'd eat my whole profit.

Then I turn my attention to retail sales, and this is what I see there.

C. If there is a market for Upscale pastry items....how come I can only find 6 or so bakeries in the whole area that provide that?

D. Possible people just DON'T go to classic bakeries anymore? Case inpoint in my area Riche Melman (is our most successful multi. restaurteur) has opened a chain of stores called www.TheCornerBakery.com . The supprising thing is, it's not a bakery, 70% of the space is a sandwhich shop with 1/2 of 1 case selling a couple danish, scones and small pastires (no cakes, no tortes). I'm thinking even he realized baked good alone won't pay the rent. I just don't get it?

E. The average cost of a retail location in the suburbs is somewhere around $1,500. for the smallest available space 1,000 sq. feet or so (and it's very very hard to find buildings leasing small retail spots, forgetting location for now).

Any one agree or disagree with the above points? Does this make sense? Would you draw the same conclusions from your experiences?

 

Maybe Breadster knows of someone, but I haven't found any artisan bread bakeries yet. D Amato's in Chicago used to have a great sour dough but....as far as I know I go to Iowa for a GREAT loaf of bread.

As far as I've learned to date:

Each country club (BUT I'm sure this must apply to restaurants too? I WISH SOME OF THE CHEFS HERE COULD HELP...) chooses it's own route as far as how they handle dessert products. For instance if they have a headchef who can make some desserts, then they ONLY want to sell desserts that they can profit from. Otherwise desserts from another source is a lose of profit for them. Example:Instead of profiting $25. person off an event they profit only $20. .So if they bring in a dessert they want it to be something where they'll make more then their usual profit off dessert (to make it worth while to them). So if they want to make up for a loss of $5.00 they want to first charge more than $5.oo (for their incentive) and only pay 1/3 perjected profit, so a $6.00 retail price per person (what they'll charge the client) they'll only pay $2.00 to buy (X3 method) it.


Some places have pastry staffs but they have to do alot of dessert volume to cover that expense or they have to be able to charge enough (which means expensive desserts) to cover their costs. It's obviously a hassle or there would be WAY more pastry chef positions.


Other places have their hands tied with chefs that can't do dessert at all. In those cases they aren't losing money by bring in items. In fact it helps them providing by providing something they don't have to invest in with labor. So they don't care if the member brings in their own desserts, they don't loose a penny. They gain a happy client because they couldn't provide a total product.

That's why country clubs let people bring in their own wedding cakes. They can't make them. It doesn't take money out of their pocket.

But what I don't understand is why they don't actively search for cake decorators, so they could be the 'retailer' of the cake. They could put a 100% mark up on wedding cakes and make money there also. But for some reason they are avoiding doing that....? So then, either it's a great idea for me to market myself to them or it's a bad idea because they don't want anything to do with wedding cakes.

So which is it? Why am I asking, so I don't waste too much effort going down a dead end street...
I'll keep asking managers and people I'd sell to (I'd love to hear from chefs here too), but I also want to know from other pastry people if their views are similar to mine (am I on track?)

 

Wow, Schroomgirl are the places your naming all in Chicago (I couldn't find them) or are they by you down south?

I know someone is opening a upscale bakery/chocolate shop on Michigan Ave. Chicago, but I don't know if it's open yet?

 

Thanks for the leads Schroomgirl. I found Alicia Boada (she REALLY is a talented Lady) last night sorting thru a file. She was in Pastry Art & Design when they featured mini wedding cakes. Anyway in her profile she says her annual volume is 900 to 1100 cakes, with 8 people peak and 3 off season on staff. She is in a GREAT area (it's actually where my Mother had her bakery so long ago), now it's so wealthy with new money...... PLUS she started a whole sale pastry shop in Chicago??? I'm not sure that makes sense to me, but then this is what this tread is about.

I realize everyone always wants everything on the same day but I would have thought 1100 cakes a year would make her rather jolly. How she comutes between 2 businesses....? Obviously she is VERY TALENTED, I have seen her work on local tv, but hum....

I've been trying to look up www.royaleicing.com since I heard them on the radio 2 weeks ago, but their site isn't working.

Is anyone familar with www.discoverambrosia.com? It's local for me. Owned by Richard Rivera, he was published in "Great Chefs, Great Chocolate" a while back. I've stopped in there many times, I always wonder what he's up to because there is never anyone in there or activity in the kitchen??? His work tastes great (expected normal pastry work) but I think he scares people with his pricing? He doesn't put any prices in his cases.... ( $1.65 for one petite 1" (mouse decorated) eclair), I'm extremely familar with his market and inspight of it being wealthy they are extremely frugel and rarely in town clients. So basicly I'm wondering what he's doing to pay the rent?

 

Back to the business aspect....starting out with-out over head is a given fact.

breadster is saying there just isn't the retail buyers out there to make the ends meet.... that's what I'm thinking too.

Unlike entrees alot of caterers, clubs, restaurants don't want anything to do with dessert and you can bring your own cake almost everywhere. So why isn't everyone adverstising to the general public? I don't get the wealthy magazines often, but I haven't seen any bakeries advertising (caterers and party planners only). In the big wedding magazines the only places I've really noticed showing wedding cakes in their ads are the top line hotels.

Do you or have you advertised before breadster? I'm sure you must have given your background....did it work?

As a side note what do you think of this company, www.cookiebouquet.com and they also are www.cookiebydesign.com ? It's a franchised business gone national. Think they'll make it? Good or bad concept?

 

Thanks for the lead Suzanne, I'll check it out.

 

I think I understand many of the basic problems of bakeries, but do I?

I'd like to mention some ideas of what I 'think' I'd do business wise to get over some of those hurdles. Any feed back would be welcome, ie. how nieve am I?

If summers are slow in bakeries they certainly aren't at country clubs. Although I'm not going to outline a plan, I'm certain since they have a need that somehow something could be worked out to fill their needs, at least the ones in driving range.

Summer is also the time for weddings and wedding sweet tables. I would market my business to party consultants, caterers (although I'm discovering more of them have pastry dept. then ever) banquet halls and major bridal shops, bridal expo.'s, florists and others working with brides.

As far as advertising I would target local papers thru out the Metro area (although I don't yet know the costs, maybe I wouldn't be able to afford them?). I know I couldn't possible afford magazine ad's. I think I would also do some dirrect mailings in affluent areas, certainly target pervious catering business that would be familar with me and areas near my last job, where I have a reputation.

I see January thru April as horribly slow in the biz. I see that as time to reload, re-design, re-group. Who's buying from you during that period breadster?

P.S. My Mother thought location was important when she choose to open her bakery in Long Grove (which is a little tourist shopping town). From what I saw and think I understood from it I don't see the advantage to most retail locations (with the exception of Michigan Ave.). Even in an Oak Street location....is a mistake in my opinion.

My reasons why (Please tell me if I'm all wet?): The 'well to do' don't eat pastries as a treat, they go jogging as a treat, buy a starbucks or have a coctail. When people walk to your location weather plays to big of role in detouring people. Winter months are horrible in less your in a mall situation (which I why I think many baking franchises (Like Mrs. Fields, Cinnabon) that don't do fullservice or wholesale business locate in malls, convience to the customer and the average person is the spontanious pastry buyer not the upper class) Plus in busy areas people can't find a parking spot and if they don't get out of the car, they don't buy anything.

Plus, the bakeries I see in wealthy comunities aren't doing any foot traffic to speak of (when I walk into their stores their empty). I think the weathly customer isn't a walk-in customer. The people who walked into our shop and bought, actually apeared to be the lower-end client, for whatever reasons (perhaps a $2.00 eclair was all they could afford? vs. a nicknack that cost $20.00?)

I think the wealthy clients spend more money at independant (non francise) businesses. Where taste is important but looks are just as important because they want to impress their guests. These people place custom orders, they don't come by and pick up pastries off the shelf.

I think everyone targets the wealthy client. I wonder about targeting the less wealthy, if that's not a bigger market? Coffee shops in strip malls on major routes to highways??? Drive thru starbucks....
A little competition with the local grocery store for the average guy who wants somthing better? Sometimes those people spend more money then the rich....

Non-pastry people, anyone agree or disgree?

 

Ah, but see I'm am only guessing. I can't see if my view is on target.

I've called some businesses and gotten some feed back but alas I haven't knocked on enough doors to know for certain what's happening. There are many branches that need pastries many reasons why somethings and some businesses aren't a viable avenue. Many things to evaluate, has no one found the answer and is there an answer? Or is the answer... there isn't an answer, better minds have thought longer on this than I could and I'm way over my head.

The only thing I can figure out is to call different perspective businesses randomly (like a poll). Can I make real judgements from that?

I've been describing a business concept I have and asking if they think it's something they would buy. Unforunately it's going to take me more time to stop being nervous and rushing thru my conversation. Especially since the concept is 50% or more visual and I can't seem to verbalize a picture.

So I keep coming back here, looking for more knowledgable insights than my own.