Bakery-cafes, stung in the past year by steep wheat commodity inflation, are finding silver linings in the economic clouds as they regain their footing and broaden their appeal to regular and new customers who increasingly are trading down from full-service restaurants.
Such chains as Panera Bread, Au Bon Pain, Atlanta Bread and Corner Bakery Cafe are enacting strategies to increase their hot-food choices, promote seasonal limited-time offers and expand catering services, especially for corporate clients that are cutting back on in-restaurant business breakfasts and lunches.
Some smaller bakery-cafes are expanding menu lines aimed at people on restricted diets, such as low-calorie and gluten-free.
Segment leader Panera’s nearly 1,200 units have beefed up their hot-food offerings, including breakfast sandwiches with fresh-cracked eggs, new panini choices and more soups—five varieties daily, including two low-fat choices. The Richmond Heights, Mo.-based company plans to unveil more new products this fall, spokeswoman Linn Parrish said.
Panera recently told stock analysts that its earnings forecasts are on target as a result of pricing and cost-control initiatives that stemmed profit erosion and menu price hikes that compensate for slightly reduced traffic.
All bakery-cafe players remain cautious about volatile wheat prices, which hit historic highs last spring. Wheat since has fallen in price, as much as 40 percent from their peaks, Au Bon Pain officials said, though prices remain much higher than in the past.
Catering has been increasing at double-digit rates for Au Bon Pain, helping boost same-store sales by 5 percent for its fiscal year ended Aug. 31, said Ed Frechette, senior vice president of marketing. Central catering facilities are in the 234-unit chain’s largest markets, including Boston and Chicago.
New and expanded menu lines also are helping increase sales, particularly such hot items as Harvest Rice Bowls, wraps and baked sandwiches, Frechette said. Other hot sellers are refrigerated, low-calorie “Portions,” a line of 20 items, all with fewer than 200 calories each, that are popular with women. Dessert Portions will be new this fall.
Au Bon Pain plans to raise prices slightly at the end of September, on top of small hikes taken last May. Most other bakery-cafes have raised prices to counter inflation.
Atlanta Bread officials, meanwhile, are augmenting their catering menu and adding more hot items as the 110-unit chain makes changes aimed at “remaking” the brand. A spokeswoman would confirm only that three new units had opened this year, but she would not specify menu and other changes.
However, Atlanta Bread’s new catering menu is expected to debut in time for the holiday season, as will a new breakfast sandwich. New hot proteins have been added to salads, and hot sandwiches on focaccia and ciabatta breads have been launched to appeal at dinner. Currently, checks average $7.50.
Corner Bakery Cafe is on a something of a roll, as evidenced by what it said is the addition of six branches since December to reach the current 108-unit size, and the chain’s launch of franchising, and average-unit sales increases of about 30 percent over the past five years to $2.3 million. The chain has tallied 25 straight quarters of same-store sales growth, spokeswoman Diana Hovey said.
Hovey said Corner Bakery has picked up business from people who have traded down from full-service restaurants and been impressed that her chain provides an upscale experience, with food delivered to tables and decor featuring dark-wood finishes and locally themed wall murals at newer branches. Hot and seasonal menu additions have increased breakfast and dinner business, and the current all-day check average is $9, she said.
Aided by fleets of refrigerated vans, catering also has increased and now generates about 20 percent of Corner Bakery’s total sales.
Deerfields Bakery, a three-unit, family-owned chain that has added a cafe component at one branch, has launched a gluten-free dessert line after a year of research. One branch of the Deerfield, Ill.-based chain has a manufacturing facility that makes the products for the other two Deerfields units.
An array of gluten-free items was needed, said general manager Tim Schmitt. “We knew there was a calling for it,” he said. “It’s selling very well.” Deerfields is also meeting a demand for organic foods with cranberry and blueberry muffins and four “Deer Joe” coffee blends.
The cafe, which employs culinary school graduates, contributes 10 percent of the company’s overall business, but that’s expected to grow to about half of all sales.
Big Apple Bagels, also based in Deerfield, Ill., is expanding the 128-unit chain’s bagel sandwich line and featuring catering platters of Bagels Bits with cream cheese and muffins.
Meanwhile, 280-unit Bruegger’s Bagels is testing new lunch items, including a revamped version of its “Bruegger’s to Go” boxed lunch in two Midwestern markets.