What do you think?

[w.debord]

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?

 

[momoreg]

Hi Wendy,
Your post is confusing to me, because you start out by saying that you'd like to start a cake decorating business, but by the looks of it, you'd like that to encompass pastries and buffet desserts as well?

I think that there is definitely a market for 'artisan' style pastry, and there must be people willing to pay more than commercial bakery prices for an exceptional product. However, if there are no bakeries doing that in your area, this can be a trail for you to blaze. This is still a fairly new trend, and Chicagoland could be a little slow catching up. But with all the money in your area, there HAVE to be people who appreciate--and seek out--quality. If you want to sell to clubs and caterers, I would make out a price list, with pictures or descriptions, and give out freebies. This is how people will truly get to know your product, and know that you are different than the huge bakery downtown.

You said that the club owners have a ceiling of $22. I'm don't understand what that's for. Since I don't have much experience in buying pastry wholesale, I can't reply to that part, but I thought it needed clarifying. I didn't know what they want for that $22.

Cake decorating on its own as a business, I think is easier to market, and requires much less production space or staff, and thus offers a higher profit margin, but doesn't offer as wide a variety for you as a baker, which I know you know. If a club is going to recommend you as one of their wedding cake people, (a)-they have to know you and what you do, and (b)- they'll want a cut of the profit. I do cakes for a couple of caterers, and I know they jack up the prices. But, because they give me a lot of repeat business, I offer a slightly lower price than I'd ask of a private client.

Bottom line, whether you're doing pastries or wedding cakes, nobody will want to pay more for a product they haven't tried. But if yours are leaps and bounds better than what is normally served in your area, then there has to be someone who'll be willing to try it. Have you spoken to establishments other than country clubs? Maybe caterers, hotels, or restaurants? You can also put together little gift baskets with pictures and samples of your work, and send it out to party planners. I think they are always looking for what's stylish and trendy, and can help lead you in the right direction.

 

[w.debord]

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?

 

[momoreg]

For some reason, I can't conect to that 2nd link, but anyway...
Having never bought or sold pastries wholesale, the prices that you're telling me people want pies for is not realistic. I wonder if you're just not finding the ones who truly look for quality, or maybe they are just too few and far between in your area. How are the higher end bakers surviving these days? Whom do they sell to? What are their prices? I wouldn't even bother comparing your idea with Melman's enterprise. It sounds like an entirely different concept, in spite of its name.

Do you have artisan bread bakers in your area? The reason I ask is that these types of bakeries typically sell a much more expensive product, but the quality is notably better. Maybe those shop owners can help give you info on how to best sell your product. You wouldn't be a threat to them, because you're not doing bread, but you might have the same market.

Just an idea...

 

[shroomgirl]

Creme de la Creme has a small high end in Lincoln Park....pastries and candies. They do alot of creative shtuff.

there is a new bakery here, gold leaf, layered scratch desserts, they moved into a neighborhood that is coming alive again, next to a restaurant but with a kitchen that can crank out pastries....last time I was in they were making 2100 bites for a high end hotel that has a pastry chef for their restaurant but needed volume for the catering end.
One of the creative bakers in town started in a church kitchen bought his own place now serves lunch and dinner, within the last year has been doing more offsite catering. He makes cakes from scratch but does not do fancy decorating, alot of fresh flowers.
Helen Fletcher (wrote a pastry cookbook years ago) does desserts that freeze....
Axucarte is very high end, sells to caterers and does loads of wedding cakes, Julie has gone from small space to her home to now her own bakery in a funky neighborhood.
Sugaree is in a small offshoot neighborhood, they do not have retail only sell direct and wholesale...they are expanding.
So these guys are all growing and doing great....
I got a e-mail this am from someone who wanted me to make Regan Daley's Cazula Pie, I e-mailed back that since I had not marketed it, the cost would be both prohibitive to her and me to make one.

 

[w.debord]

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?)

 

[w.debord]

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?

 

[spoons]

Hi W.Debord

Here's some cake people in your area.

Alicia Boada- Edible Work of Art, Long Grove

Margaret Lastick- Royale Icing, Oak Park royaleicing.com

Azucarte.com, She is in St. Louis.

 

[shroomgirl]

Nope only Creme de la Creme is in Chicago....Steven the maitre d at the ritz reeled off a few names of pastry places when I visited chicago last April....sorry to have forgotten them.

The rest are here in STL and thriving....

 

[shroomgirl]

So I guess I could be a little more clear.....these guys all started out small in CHEAP places, some in their homes. They sell to upscale caterers that need a beautiful product and will make monies elsewhere. They also do alot of direct sells. Some do sell to restaurants, again high end and regular. I don't know the wholesale pricing but it works for these guys.....Price your food so you make a profit, let them add the frou frou and you both make money....many high end restaurants would love to not deal with desserts in their kitchens.
So the businesses I named have been around for 4+ years. I started out the same time as Azucarte. The others have morphed through the time I've lived here 7 years.

 

[breadster]

Wendy, Wendy, Wendy....
this is why i've asked you to come visit me (traffic is a fact of life- deal with it!!! ) so don't do it every day- just come visit!

i am faced with these issues every day- i think most bakeries are- that's why we (the upscale bakeries here in Chicago, do both retail and wholesale)we'd all love to do just retail- and get top dollar for it- but it's very hard to make it with just retail

location is so important- but good ones cost so much$$$$- and frankly coming up with a $3500-$4500 nut each month just for rent is not something that would allow me to sleep at night

so wholesale becomes a consistent rent-paying, bottom-line feeding necessity- it also increases visibility and customer awareness and can be a form of advertising-

i think Creme de la Creme does some of the nicest work in the city of fine pastries and was shocked to see them selling at one of the Whole Foods markets- but then not so shocked because there is no way they could make it retail where they are

Red Hen Bread - does artisan breads - in Chicago - has a thriving retail store and recently bought a huge space to take care of their growing wholesale business

Our business is 70% wholesale but we wholesale only part of our product line

we have high- end pastries, tortes, etc in our store - and i will not wholesale them- i've had many restauranteurs come in and want to buy them and ive said sure- but you buy them at the counter price- some do- most of our customers who buy our products at stores dont even realize we make all these other items- unless they come to the store which we try to get them to do via various means- but we have built a whole new following for our cakes and tortes now

the rest of our business is mail order- which i really enjoy-
we have customers who order from all over year after year - you get to know them, their families, friends etc. it builds.....

so you see, it's a bit of give and take- we make our margins on the retail and mail order and do what we want- and we get the volume through wholesale

but ****, it's still all a *****!

 

[breadster]

hey, i didnt say******* what's a ******?

 

[w.debord]

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?

 

[w.debord]

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?

 

[suzanne]

Wendy: there will be a segment later today on the radio show "Marketplace" about why this is a good time to start a business. Try to listen if you can. It's on Public Radio -- try WBEZ FM, 91.5 -- and also has a website: Marketplace

 

[w.debord]

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

 

[breadster]

ah so much to say- so little energy!

WenDB- i'm not saying that there are not the retail buyers out there- there are plenty of reknown businesses (eateries) where people travel miles to go to them- but they are few ( and i'm sure still do some wholesale)

my dream has been to open a shop on Michigan Avenue or Oak St.- not only are they the highest per capita shopping streets in the city, but the business would come from the well- heeled local residents as well as tourists- and i really believe I could do great there- but the rents would be around $7-12,000 a month!

yikes!!! cakes and cookies are not Giorgio Armani suits- thats alot of pastry to make and sell!

bakery businesses can often be seasonal- we really slow down in the summer - when peoples eating habits change and picks up Sept 1 like a back- to- school bell - that really gets harry where cash flow is concerned

there is a woman - the cake lady- who rents space from a caterer next door to me- ive seen her menu and her work- its beautiful-
she seems quite busy- i've referred people to her- i'm sure the caterer does as well
- maybe you'd like to speak with her?

the key- is to keep your overhead down- when you are starting out- thats why i started the whole thread about renting space to a pastry chef-

i rented space for a few years from a pizza parlor ( in the middle of the night) and then a caterer before i got my own place

word of mouth is a big part - you have to build the business

if funds are no object - then go for it

re advertising- i believe in it wholeheartedly- again it's so darn expensive- one ad isnt going to do much- it really does take repeated ad inserts to make a dent in peoples consciousness- so that you are the one they think of the one time they need something special- even one new customer - is a new customer

even better though not a substitute is PR- most food editors are always looking for the newest, best, unique subject or person to write about - and it comes across to the public as an endorsement-

ok thats all for now- my puppy is snoring and i have to hug her.

 

[w.debord]

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?

 

[cape chef]

Wow,

I have really enjoyed reading this thread.

I have always worked for someone else,never been out on my own.Geez theres just so much that needs to be takin into account it's mind boggling. Would it be smart to start small,in a lower rent area and go wholesale at first.Go to every hotel,restuarant country club,deli ETC with samples and menus and see if you can get your foot in some doors. because of seasonality you would have to really be ontop of whos busy when.

I would like to put more thought to this topic...But I do not have the type of expereance you are talking about to really help.

But,I'll be selfish because I am really learning something here
cc

 

[w.debord]

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.