Australian Convenience Store News| Bakery - Fresh or frozen, bakery brings home the bread

The debate still rages. Fresh versus frozen. Which is better? Which is more convenient? Convenience Store News went looking for some answersÖ.

While real estate agents may no longer talk their vendors into brewing coffee and baking bread to entice potential buyers, no-one would argue that fresh-cooked smell is highly evocative.

It's also highly provocative - which is the whole idea if you're selling such goodies, because that smell should provoke customers into buying something. But the experts are divided over the best way to get that smell and those sales - is it a full in-store bakery or simply a matter of fresh product heated through in a microwave or pie warmer. Both have their advantages.

According to Mark Fell, acting general manager of Delifrance Australia, the in-store bakery concept is growing, and growing well, and there are very good reasons for that, particularly when it is part of a convenience store.

"Part of the appeal is that it increases a C-store's fresh food offering to compete with rivals who are encroaching on their 'traditional' territory, such as supermarkets who've turned to selling fuel. Any extra on-site offers, such as a bakery, widens that C-store's appeal and profit possibilities."

The question, of course, is the cost to actually set up that bakery operation but Mr Fell says it's not a particularly expensive exercise - with one word of advice.

"The smart operator will see a return on an investment of around $6000 [in equipment and set-up] in a little more than a year, providing the commitment is there to make it work. It will work well but it's not the sort of operation you can set in place and then forget about. It requires attention to detail."

Bake on Site or Thaw & Sell
Delifrance supplies a wide range of par-baked, snap-frozen bakery treats that come ready to bake and only require 10-15 minutes in the oven. In return, Mr Fell says, they offer the operator 40-50 per cent GP. The company can supply as much or as little as the C-store owner/operator needs - just the product or every aspect through to equipment, training and merchandising.

However, the company is aware that an in-store bakery is not the perfect solution for everyone and now has both options covered with the recent launch of a range of fully baked fresh frozen croissants. They simply need to be thawed to be sold fresh and have a shelf life of two or three days once thawed.

"There's no real labour involved and no special equipment. You just sell them. They can be served at room temperature or heated, if the customer prefers. We believe it gives operators who are keen to sell Delifrance products two options - they can bake on site or simply thaw and sell."

Mr Fell says there's minimal wastage involved with the croissant range ("just thaw what you need as you need it") and obviously less upfront cost to the operator. GP is around 25-30 per cent.

"Obviously you can't beat that fresh baked aroma but this is a viable alternative for smaller or more remote stores which simply couldn't get a return on the full bakery investment," Mr Fell says.

Traditionally Delifrance has concentrated on French-style rolls but the company is in the process of broadening its range to Australian-style rolls and also to par-baked focaccia and other European varieties.

The Bagel House is another specialist bakery company which is hedging its bets, as it were, by offering both fresh and par-baked, frozen products. The Bagel House makes authentic boiled and baked bagels that are 98 per cent fat-free with no preservatives. An interesting point, as made by Audrey Buckley, the company's development manager, is that it takes 30 hours to make each individual bagel.

"We have 20 varieties of bagels, both sweet and savoury, and the range is constantly changing. Most of our market has traditionally been in fresh product, delivered daily, but we are seeing strong growth in parbaked product to a wide variety of food service outlets.

"The plain or savoury bagel is gaining ground as a sandwich alternative, while the sweet varieties go well with a beverage. And there's no doubt that aroma is customer winner with parbaked product."

Ms Buckley says fresh Bagel House bagels have a five-day shelf life, while the par-baked frozen products will keep in the freezer for six months. Either way, once they are ready to be served her advice is to keep them covered for hygiene and freshness, and ensure the unwrapped product is not handled.

Because bagels are still relatively new to Australia, the company can supply leaflets which explain the health aspects of the product plus ideas for serving. As far as introducing them to an audience, Ms Buckley says 'meal deals' work well or offering them sliced into small pieces for a 'try-before-you-buy' approach to win new customers. One issue that isn't a particular problem with this versatile product is wastage.

"We launched our own range of bagel chips last year and they're also going quite well, but they're also something that people can do for themselves if their bagels are going stale.

"Simply slice them and re-bake them. It's something the C-store operator or the customer can do quite easily. You can add flavourings like garlic or cinnamon before baking them, but there really shouldn't be any waste."

Frozen Product can Minimize Wastage
The issue of wastage is a big one. No-one wants to spend money having a product ready-to-go that is not sold on to a customer and many suppliers maintain that is why frozen can work better than fresh. Bronwyn Brinkworth is just one expert putting that argument forward.

Ms Brinkworth Product Manager for Simplot Australia, the manufacturer of Four'N Twenty and Herbert Adams ranges of pies, pasties, sausage rolls and savoury pastries.

"There are clear advantages with frozen products. Our pies are made and then snap-frozen so the 'just baked' quality is captured within minutes of leaving the oven.

"A frozen product allows the operator to keep a greater variety of products on hand which makes for increased flexibility and customer satisfaction, generating greater profits for retailers.

"Frozen products have a storage life of 18 months, (once thawed a chilled product has a guaranteed shelf life of eight days) which allows for far better stock control and stock management.

"Simplot is fully HACCP accredited and provides retailers with information relating to quality assurances, correct product handling and heating instructions to ensure the food's safety.

"Food safety is a growing concern among consumers and is already an issue with retailers. New regulations are coming into force at the end of the year demanding percentage labelling of characterising ingredients on all wrapped product to assure the consumer of what they are eating."

Ms Brinkworth says another important issue for retailers is the strength of the Four'N Twenty and Herbert Adams brands. Strong brands increase bakery sales and bring consumers into their stores. Since launching their new Herbert Adams premium range of pies and pastries last September, C-stores now have the ability to increase in-store bakery sales with two very well recognised brands that are continually supported.

"Our brands, Four'N Twenty and Herbert Adams, are very well known across Australia and customers will pay for something they know and trust."

Ms Brinkworth says quality is never a question with the new Herbert Adams premium range. The pies are larger at 210g, (Shepherd's Pie 240g) and all 'meat' pies contain 100 per cent forequarter Australian beef, while the chicken pie contains 100 per cent chicken breast. Vegetarians are also catered for with savoury rolls.

None of Four'N Twenty and Herbert Adams products contain any added MSG. The Herbert Adams range currently consists of eight products and Ms Brinkworth says Simplot is constantly on the lookout for new flavours, ideas and product offerings.

General Mills Bakery and Food Service is another company which makes and supplies both frozen par-baked pastries as well as fresh baked products. General Mills bought out the Pilsbury group last year, making it the sixth biggest food company in the world with brand names such as Yoplait, Cheerios, Latina and Old El Paso. Direct marketing manager Debbie Robertson says there's plenty of room in the marketplace for both fresh and frozen.

Baking Onsite Offers Customer Appeal
"C-stores are a big market for us with both types of product but the in-store bakery is definitely growing. That fresh-baked aroma really does capture customers when they come inside."

General Mills' frozen products have a six-month freezer life, with a shelf life of two-to-three days when thawed. Ms Robertson suggests staggering the baking across the day to maintain the tantalising aroma and minimise wastage.

"If you bake a whole carton of something and then don't sell it, it's wasted. Just do small amounts at a time. It's also a good idea to pick a core range of products and mix it up with a variety of new products as they become available.

"A core range would be things like croissants, Danish and scones but we're always offering new products or variants like chocolate filled croissants. And when you do have something new available, promote it - meal deals are a great idea, especially when you are introducing something new because it encourages people to try it and then, hopefully, they'll come back for more."

General Mills has a new product called Dog Wrap, which is a hot dog wrapped in pastry. Ms Robertson says it's a better alternative to the traditional hot dog which can be a real problem in HACCP terms.

"We're happy to work with C-store owners on promotions of new products like Dog Wrap but many of them prefer to do their own. All of these products can be real profit earners for C-stores, providing they are managed well."

Fresh Product is Popular
Andrew Huhn, state sales manager for Beaumonts Foods, is another advocate of fresh product, arguing that it's easier to manage and popular with consumers.

Beaumonts produces a range of pies, savoury pastries, cakes and slices which are fresh baked and distributed around Victoria. The company is in the process of merging with South Australian bakery specialist, Balfours, with the aim being a large slice of the national market.

"We've found C-stores to be a growing outlet for fresh products because of the changing needs of the population. The growth of the C-store generally, the population's demand for convenient shopping and the closing-down of strip shopping has had a large impact on our traditional outlets.

"But we find the market for fresh baked produce is very buoyant and we believe that's for a number of reasons, not the least being a perception of guaranteed quality," Mr Huhn says.

"Consumers want fresh rather than frozen because of the flavour and the fact that there is a presumption of quality ingredients and they can have confidence in the product. Our beef pies are 100 per cent lean beef with no MSG and they're also a bigger pie than many of our frozen rivals, so the customer knows they're getting value for the price they're paying. And people are prepared to pay a premium for a premium product, which also means a better return for the business."

Mr Huhn says wastage will always be an issue no matter whether the operator is dealing with fresh or frozen products: "but a frozen pie can't be re-frozen after it's thawed whereas a fresh pie can last in the fridge for seven to 10 days.

"Our products are all individually wrapped from the baking process through to delivery to the customer so the HACCP risks are negligible. Unwrapped product is where the risk is."

All the companies spoken to by Convenience Store News are happy to help operators with equipment, advice, point-of-sale material and promotion. They advocate combo bundling ('meal deals') as an excellent way of promoting existing products and introducing new ones, and the system would appear to work no matter which road you take with your bakery offer.