The Cost of Baked Goods

[jmacnaughtan]

Staff note: This post and those that follow were split from the Show Off Goodies from Your Local Bakeries topic, to maintain topic focus.

 

On 10/17/2020 at 9:05 PM, Jim D. said:

We are very fortunate to have a small bakery named Réunion in Staunton, Virginia. Owner Bryan Hollar produces an ever-increasing number of luscious items in a very small space.  The quiche is the best I have ever eaten.

 

 

The ever-popular almond croissant

 

A pumpkin custard cruffin topped with a Speculoos cookie (a flavor combination that I am going to borrow for Christmas chocolates this year).

 

 

 

 

 

Those do look good, but the prices are staggering. Are these normal prices, or have they had to hike them up to survive the pandemic?

 

I imagine these are pre-tax, pre-tip too 😬

 

(For context, at Ladurée or similar, a pain au chocolat is generally €1.80 or so. Neighbourhood bakeries sell them €1.00-1.20, tax included)

[weinoo]

2 hours ago, jmacnaughtan said:

 

Those do look good, but the prices are staggering. Are these normal prices, or have they had to hike them up to survive the pandemic?

 

I imagine these are pre-tax, pre-tip too 😬

 

(For context, at Ladurée or similar, a pain au chocolat is generally €1.80 or so. Neighbourhood bakeries sell them €1.00-1.20, tax included)

 

There is no way you can actually compare baked goods' prices in Paris with prices even in places like Staunton, VA. I'm paying $5 for a damn baguette!

 

In addition to our prices being more baked than prices in Paris, our breads and pastries tend to be (more baked) too.

 

 

I have a good friend who spent a good part of last year working/living in Paris. She never stops complaining/comparing (and who am I to complain about a complainer?) about our baked goods. And NYC has some decent baked goods....it's all relative, no?

 

 

[Jim D.]

3 hours ago, jmacnaughtan said:

 

Those do look good, but the prices are staggering. Are these normal prices, or have they had to hike them up to survive the pandemic?

 

I imagine these are pre-tax, pre-tip too 😬

 

(For context, at Ladurée or similar, a pain au chocolat is generally €1.80 or so. Neighbourhood bakeries sell them €1.00-1.20, tax included)

 

As I was scrolling down this page (before I saw your comment) I thought to myself, "I wonder how Bryan manages to produce those items for that low a price."  So I was surprised by your comment.  A "prosecco poached pear galette with hazelnut cream, raspberry crumb, and roasted hazelnut" for $4.50 does not seem out of line at all to me.  Yes, the prices are higher than grocery store pastries, but not considering the ingredients he uses and the skills he possesses.  Have you shopped in the U.S. recently?  I am more familiar with chocolate pricing, and $2 for a small one-bite bonbon is more or less the norm, and $3 is not all that unusual. 

[jmacnaughtan]

1 hour ago, Jim D. said:

 

As I was scrolling down this page (before I saw your comment) I thought to myself, "I wonder how Bryan manages to produce those items for that low a price."  So I was surprised by your comment.  A "prosecco poached pear galette with hazelnut cream, raspberry crumb, and roasted hazelnut" for $4.50 does not seem out of line at all to me.  Yes, the prices are higher than grocery store pastries, but not considering the ingredients he uses and the skills he possesses.  Have you shopped in the U.S. recently?  I am more familiar with chocolate pricing, and $2 for a small one-bite bonbon is more or less the norm, and $3 is not all that unusual. 

 

The elaborate pastries weren't the ones that caught my attention - it's more the pain au chocolat, plain croissant and cannelé for 3$ and up that I find extortionate. Given the ingredient costs (and labour and rental costs, which are almost certainly lower than they are here), they must be making a spectacular margin on those.

 

If there are people willing to pay that, then great! But it still surprises me.

 

And I am curious - are those prices pre-tax, and do you tip in these places?

[Jim D.]

2 hours ago, jmacnaughtan said:

 

And I am curious - are those prices pre-tax, and do you tip in these places?

 

The prices are pre-tax, which is 2.5% in this state.  Tipping is provided as an option when one is paying by credit card.  Various percentages are displayed, along with the option to select "no tip." In recent years tipping at places where there is no table service has become widespread in the U.S.  There are restaurants rebelling against tipping by following the European model of simply adding it to the bill and paying their workers a decent wage, but those are few and far between.

 

I know someone from Europe on eGullet who asked me about prices of chocolates in the U.S., and he was surprised at the result of my survey.  I recommended that he move here, open a chocolate shop, and get rich. 😄  But many of us who are producers are paying the cost of often importing many of our ingredients:  chocolate, hazelnut and pistachio pastes, fruit purées, etc.  Réunion uses Valrhona chocolate products, often $20-25 per kilo even at wholesale prices.

[blue_dolphin]

I thought the Réunion prices looked great!  

The 2 local bakeries that I visit most often,  Café Ficelle, in Ventura and Roan Mills in Fillmore, charge $4.25 and $5.00, respectively for a plain croissant, 4.95 and 5.00 for a pain au chocolat, 4.75 and 4.00 for a baguette.

 

[heidih]

2 minutes ago, blue_dolphin said:

I thought the Réunion prices looked great!  

The 2 local bakeries that I visit most often,  Café Ficelle, in Ventura and Roan Mills in Fillmore, charge $4.25 and $5.00, respectively for a plain croissant, 4.95 and 5.00 for a pain au chocolat, 4.75 and 4.00 for a baguette.

 

 

Yes what I see down here for good stuff. On the tax though - we don't get taxed on take-out right? Just on eat-in?

[MokaPot]

The prices seem OK to me (Réunion), for what you're getting. Not something I could afford every day, but I would definitely try to support a place like that. That prosecco poached pear galette with hazelnut cream, raspberry crumb, and roasted hazelnut for $4.50 is what I'd eat there. Looks like a kouign amman.

[blue_dolphin]

38 minutes ago, heidih said:

 

Yes what I see down here for good stuff. On the tax though - we don't get taxed on take-out right? Just on eat-in?

 

That's right!  

[teonzo]

Thanks for opening this thread, it's really interesting and I hope more people will chime in with many more photos. Unfortunately I don't have a camera (I can't stand smartphones), otherwise I would post what is available here.

Those viennoiseries by Reunion look great, I can count on my hand the places here that sell stuff of that quality. With "here" I mean a radius of about 30 km.

Some considerations about prices. As I read them I had a similar reaction, thinking they were really high. But the whole market is really different. Those viennoiseries are much bigger than the ones on sale here. The ones in the photos are well above the 100 g mark, I would say they are near the 150 g mark (maybe someone can give some exact weights). Here a croissant weighs around 50 g. Filled viennoiseries (most people eat their croissants / Italian brioches filled with pastry cream or apricot jam) can reach around 70 g, it's really really rare to find something bigger. So much rare that in the last 10 years people started requesting small versions (about 25 g for the empty ones) for "dietary reasons". Breakfast here is totally different than in the USA, the typical breakfast is coffee/cappuccino plus croissant/brioche, It's something consumed every day, while, from what I read, eating a viennoiserie in the USA is seen as once in a while, not an everyday breakfast item.
Besides this, here in Italy viennoiseries are considered a money looser. I'm talking about quality pastry shops, who make their own viennoiseries (most buy the industrial ones) using quality ingredients. Prices range from around 1.10 euro to 1.50 euro for each piece. The most expensive places went from 1.10 euro in 2015 to 1.50 euro in 2019, quite a rise in a small timeframe. So on average the price ranges in the 18-25 euro/kg zone, which is pretty low for an artisan product. People keep these prices to attract customers: you need a wide base of customers to stay in business, so you need as many people coming for breakfast as you can. You don't make profit from viennoiseries, you make profit from coffee and cappuccino and from the other items. Viennoiseries are seen mostly like a bait, to get as many people as you can to come for breakfast and become regulars.

 

 

 

Teo

 

[weinoo]

5 hours ago, jmacnaughtan said:

 

The elaborate pastries weren't the ones that caught my attention - it's more the pain au chocolat, plain croissant and cannelé for 3$ and up that I find extortionate. Given the ingredient costs (and labour and rental costs, which are almost certainly lower than they are here), they must be making a spectacular margin on those.

 

But it still surprises me.

 

 

The thing surprising me the most is that people actually want to open backbreaking businesses such as bakeries, with the hopes that they may even make a meager profit.

 

How are labour (sic) and rental costs lower here in NYC or in SoCal than they are where you are? 

 

1 hour ago, blue_dolphin said:

I thought the Réunion prices looked great!  

The 2 local bakeries that I visit most often,  Café Ficelle, in Ventura and Roan Mills in Fillmore, charge $4.25 and $5.00, respectively for a plain croissant, 4.95 and 5.00 for a pain au chocolat, 4.75 and 4.00 for a baguette.

 

 

Yes, about what I pay. Before tip. Different strokes, right?!

 

To expand a little bit, many of these newer places here in NYC are all about the "artisinal flour" this, "grinding in house" that, etc. etc. 

 

To whit:

 

Quote

 

Mel thoughtfully sources  grain from organic local and regional farms.

. All our rye flour is milled fresh in house

 

 

That shit costs money. Be it in time or in funds.

[Jim D.]

1 hour ago, teonzo said:

Those viennoiseries are much bigger than the ones on sale here. The ones in the photos are well above the 100 g mark, I would say they are near the 150 g mark (maybe someone can give some exact weights).

 

 

I was going to point out that fact.  Any place I have taken them as a gift, e.g., for breakfast, no one has ever eaten a whole one.  They are generally accompanied by a sharp knife for dividing them.

[jmacnaughtan]

11 hours ago, weinoo said:

 

The thing surprising me the most is that people actually want to open backbreaking businesses such as bakeries, with the hopes that they may even make a meager profit.

 

How are labour (sic) and rental costs lower here in NYC or in SoCal than they are where you are? 

 

Maybe not NYC, but the bakery is in Virginia.

 

Skilled bakers cost a lot of money to employ here, and the social security contributions that the company pays the state pretty much equal the salary. Add to this the fact that Paris rental prices are extremely high... Even at the €1-2 mark however, bread and pastries are the most profitable items in bakeries, generally because they can be easily made en masse. The losses generally come from the more elaborate cakes.

 

Also, what's your problem with British English?

[weinoo]

5 hours ago, jmacnaughtan said:

 

Maybe not NYC, but the bakery is in Virginia.

 

Skilled bakers cost a lot of money to employ here, and the social security contributions that the company pays the state pretty much equal the salary. Add to this the fact that Paris rental prices are extremely high... Even at the €1-2 mark however, bread and pastries are the most profitable items in bakeries, generally because they can be easily made en masse. The losses generally come from the more elaborate cakes.

 

Also, what's your problem with British English?

 

I'm trying to learn a new language.

 

And here's what we know about baguettes in Paris...

 

Quote

But while there are few symbols as quintessentially French as the baguette, its status – and quality – have been uncertain in recent years. Beginning in the 1950s, bakers began looking for shortcuts to make baguettes more quickly: relying on frozen, pre-made dough; and baking baguettes in moulds rather than free form. Instead of the crispy-on-the-outside, tender-on-the-inside loaves that M’Seddi bakes every morning, these pale, doughy baguettes became stale almost the moment they cooled down. By the 1990s, they had become the norm for bakers and Parisians.

 

Making bread en masse is certainly not what's happening at the bakeries shown above.

[jmacnaughtan]

3 minutes ago, weinoo said:

Making bread en masse is certainly not what's happening at the bakeries shown above.

 

Sure it is. Each batch of baguette dough generally uses around 25kg of flour (often more), which is mixed by machine before being shaped, generally by hand. When you consider that a baguette normally weighs around 200g, that's a lot of loaves.

[weinoo]

No, I’m referring to the making of bread in 250 kg batches, not 25 kg. And then selling those loaves either par baked or frozen for bakeries to sell as their own. 

[weinoo]

Also, my guess is that In France, people won’t pay 4 or 5 euros for a baguette, even If that is the price necessary for the owner of a small bakery (like a mom and pop type shop) to actually turn a profit.  So they can only charge what the market will bear and hope that it works as a loss leader.

[jmacnaughtan]

5 minutes ago, weinoo said:

Also, my guess is that In France, people won’t pay 4 or 5 euros for a baguette, even If that is the price necessary for the owner of a small bakery (like a mom and pop type shop) to actually turn a profit.  So they can only charge what the market will bear and hope that it works as a loss leader.

 

They won't, but far from being a loss leader, the baguettes are what makes money. The ingredient costs are probably around 5 cents a loaf, and one baker can crank out hundreds. It's similar for croissants, etc. Most of the bakeries going under are generally not the "Mom and Pop" ones, which generally turn a healthy profit, but the crappy "pain chaud" that buy in the frozen dough.

 

These products pay the bills, while the margins on more elaborate cakes are much slimmer.

[weinoo]

I get it on the cost of commodity raw materials. Now, what's the labor and o/h associated with that loaf, so we can see the gross margin?

 

 

 

[teonzo]

13 hours ago, jmacnaughtan said:

Even at the €1-2 mark however, bread and pastries are the most profitable items in bakeries, generally because they can be easily made en masse. The losses generally come from the more elaborate cakes.

 

You should check your math about viennoiseries. Especially considering the front of house costs: to make a kg you need about 15 pieces. So this means for each kg you need to consider the costs of serving 15 dishes, collecting 15 dishes, washing 15 dishes, collecting 15 payments (ok, less than 15 since we need to consider coffee and the rest). Takes quite some time, takes a good portion of a dishwasher cycle. If you make a profit of 0.10 euro per piece and sell 200 pieces each day, it's 20 euro profit per day. You don't go far if that's your most profitable side.

 

 

 

Teo

 

[jmacnaughtan]

10 hours ago, teonzo said:

 

You should check your math about viennoiseries. Especially considering the front of house costs: to make a kg you need about 15 pieces. So this means for each kg you need to consider the costs of serving 15 dishes, collecting 15 dishes, washing 15 dishes, collecting 15 payments (ok, less than 15 since we need to consider coffee and the rest). Takes quite some time, takes a good portion of a dishwasher cycle. If you make a profit of 0.10 euro per piece and sell 200 pieces each day, it's 20 euro profit per day. You don't go far if that's your most profitable side.

 

 

 

Teo

 

 

I think we've got our wires crossed. When I hear "bakery", I think of a place that only sells to take away. Generally in these places, there's a baker, an apprentice and someone working on the till - no service, coffee or dishwashing. Sure, in cafés these pastries are more expensive.

[jmacnaughtan]

16 hours ago, weinoo said:

I get it on the cost of commodity raw materials. Now, what's the labor and o/h associated with that loaf, so we can see the gross margin?

 

 

 

As I said, it's easy for one person to crank out a couple of hundred loaves or pastries, so the labour cost per item is low. Similarly, they're all proved and baked en masse, so the overheads are greatly reduced. Unlike with more elaborate cakes, it takes relatively little time to make a large number of baguettes and pastries, prove them and crank them out throughout the day - it also helps that these are by far the most popular items. This is generally why, here at least, it's easy to get funding to open a boulangerie but much harder for a pâtisserie that doesn't do these high-margin, high-volume products.