wholesale

[simo]

I am currently thinking about opening a very small wholesale/retail bakery. Pastries, pies , and some breads. I have found a location that has a very affordable lease. I was chef-owner of a 200+ seat casual fine dining restaurant for twelve years that was very successful, so I know the business end of the kitchen very well. However, I don't really know much about operating in the wholesale world. Are there any general guidelines concerning mark-up in relation to food cost or any other info that would be of value?

[chiffonade]

I hate to rain on your parade but this is about the worst time to launch any type of store that caters to a carbohydrate-focused product. Unfortunately, the Atkins fad has not run its course just yet and you can tell this by looking at any restaurant menu (offering "low carb" choices) or watching TV ads (everything from "low-carb" vitamins to "low carb" Special K cereal...WTF??)

Give a few more people a chance to have their first bagel after six months and go careening back into real life. Once people rediscover balance - and that there is no "magic bullet" - they'll be ready to enjoy all the food groups again. Your wholesale bakery might have a chance at that time.

Remember, no one ever said "Protein is the staff of life."

[kuan]

You can do it depending on what you mean by "wholesale." If you're thinking of going up against wonderbread forget it! If you want to sell to local restaurants then maybe.

Pricing... the neverending question. IMO pricing depends more on what the consumer is willing to pay rather than your cost. Frankly, the consumer has no clue, and really doesn't care about your cost. Never ever price your goods according to what you think you need. Running a business is never about you, it's about the consumer. Sadly, many businesses have yet to figure that out.

You need to position yourself right in the middle of the largest category out there. If you're selling pies then find out what most people pay for pies and then find a match for that market. Remember it's not what people are willing to pay, it's what they're actually paying. Never price according to what your perception of other people's reality.

Kuan

[Mezzaluna]

I wonder if his location has something to do with the prospects. Some areas of the country are more into low-carb types of things than other places, I would think. Are you in a college town? Metroplex suburbia? Large city? Rural area? Just wondering if it matters.

Also, some of our local artisan bakeries are offering reduced carb products and doing fairly well with them. Truly low-carb replacements of normal foods are ghastly. Reduced-carb versions can be palatable and more attractive. I've tasted reduced carb bread that was actually pretty good. For some customers, "reduced" may fly where "low carb" wouldn't.

Just a few random observations.......

[shroomgirl]

our artisan bread wholesaler is biting dust about now....they have a bakery in STL and KC with a large variety of products.
Now the little Italian artisan pastry shop is doing Great. They are essentially in the reviving ghetto (really) and are selling through Clayton Farmer's Market as advertising. Their product is NOT cheap buy anymeans but is incredible.
Pies are $35 Cakes start in the mid 20's and go up. Everything is quality.
Scones hit $2 because of the butter increase....from $48 to 105.....
Restaurants in the area are saying at least 25% of their customers are doing S Beach or Atkins. They ask prior to putting bread on tables.
OH well.

[panini]

Just my 2 cents. The low carb thing has nothing to do with a good product and service. Our business is up 28% over last year for the last quarter. Corse I can't get 30 dollars for a pie but we do start at 39, for 10" cakes. We haen't passed on the increase of butter and cream but it has come down a little in the past two weeks.
There is never a good time to go into business.
Fifteen yrs ago I researched every bakery and restaurant I could, and talked to as many people as I could and came to the conclusion that the persons who started the retail first and then tryied to develope wholesale were the ones that failed the most. The fact of the matter is, you can't survive out of the register.
This situation I would have enough caqpital to run the everyday business and have dedicatged people to address the wholesale. When it comes to wholesale, do your homework. Visit as many possible client locations and see what they are offering for dessert and what they are charging. If you think you can supply them with product of better quality and they can mark up 20-40% then set up consultations.
Personally I developed my wholesale business for the first three years and the transition into the retail spots was pretty seamless.
Good luck to you.
No risk, No reward