Providing bake goods to a retail grocery location

[celenes]

I would like to know the group's thoughts on providing bake goods to a retail grocery location.

Here's the background. Recently a local grocery chain opened up in my neighborhood which is literally walking distance from my house. It is a family owned business and has been a long standing business in the Cleveland area.

The shopping plaza that it is located in is small and so the grocery store is not very big and they don't have a bakery at all. In the other stores however, they do have very large bakeries. With the approach holiday season and beyond I thought I might contract bake for them if they agree. I have plans on making a call to the Corporate Office on tomorrow to begin the discussion but I am not quite sure of some questions I should ask, how should I price my product etc.

Thoughts?

[andiesenji]

Do you have a commercially certified kitchen? Or access to one?

In most places there are strict rules about where food products can be prepared for sale to the public.

The laws here in California and Los Angeles County are probably stricter than many places in the country and I had to jump through hoops to get my kitchen certified.

I get a visit from the county health department twice a year and have to file papers to show that my exhaust filters have been cleaned every three months, The sink drains have to pass inspection as does the dishwasher, refrigerators, etc.

They even measure the temperature of the water coming out of the tap, take scrapings from my countertops and so on.

[celenes]

Do you have a commercially certified kitchen?  Or access to one?

In most places there are strict rules about where food products can be prepared for sale to the public. 

The laws here in California and Los Angeles County are probably stricter than many places in the country and I had to jump through hoops to get my kitchen certified. 

I get a visit from the county health department twice a year and have to file papers to show that my exhaust filters have been cleaned every three months, The sink drains have to pass inspection as does the dishwasher, refrigerators, etc. 

They even measure the temperature of the water coming out of the tap, take scrapings from my countertops and so on.

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When I spoke to the state (OH) earlier this year I was told that if I did the proper labelling and did not have product that required refrigeration I would be o.k. The inspector would only come out if I was doing things like cheesecake that requires refrigeration.

What I would be contract baking would be cake, mostly birthday cake that would be ordered and probably eaten within a 24 hour period.

[K8memphis]

Yah, Ohio is easy. Here in TN I have to have a commercially zoned commercial kitchen in other words, not from home.

You would be wholesaling to sell to the store - you won't make much at all - unless you do big volume.

I would suggest for you to determine your product line and cost to produce (including paper towels, gas, sugar, flour everything including your time) triple that - balance your price out against what other bakers get...stuff like that. Go retail instead.

[andiesenji]

I agree. Unless your are doing a super specialty item that goes for a premium price, you probably won't make enough to pay for your labor when you are doing wholesale in small quantities. However there are places that can make arrangements for contract baking in small batches that can pay quite well.

When I was doing more baking, (prior to fracturing a vertebra in my low back), I made scones, biscuits(cookies) and tea cakes for three local tea rooms, all of which scheduled group teas well in advance with a deposit. They then knew exactly how much to order from me without having any wastage.

I could deliver the baked goods fresh, the morning they were to be served.

I also did birthday cakes, shower cakes, Mother's day cakes, retirement cakes etc., appropriate for the tea event. I did quite a few for the local chamber of commerce who held a meeting once every quarter at one of the tea rooms. It made a change from their office where they usually meet.

Although the tea room owners took the orders, I was paid in advance by the customer, directly to me, cash only. This saved the tea room owners the bookeeping and made sure I was paid before I did the work and used the supplies.

[chefpeon]

Geez......maybe I should move to Ohio!

Here where I live, in Jefferson County, Washington, you have to have a license for EVERYTHING.

The health department freaking "fees" us to death. For instance, the front part of the location where I work is a delicatessen. They just started making soups to serve for lunch, but, they're doing it "on the sly" in a way, because they haven't been issued their "hot hold" license yet. They're waiting to "get busted" by the health dept. before they shell the money out for it. Restaurants in town want to buy a lot of the desserts they make, but they don't have a "wholesale" license yet. Doesn't mean they don't sell it to the restaurants....they just do that on the sly too.

Just ask Abra, she lives in a neighboring county, but her rules are just as strict......and boy does it make it a bitch to do business!

[celenes]

Hmmm. I am sure it's just as tough here too. I think if I do end up striking a deal with the local grocer I will soon find that the rules are a lot stricter. And I probably won't want to deal with the headache.

We'll see what happens or if they even call me back. So far no word from them.

Might be for the best. I like the way I operate now with a small but yet loyal client base. Plus I not in it to make the money at this point since I do have a very good job, you know the one that pays for all my baking toys and a few pieces of clothing every now and then

Edited October 22, 2004 by celenes (log)

[andiesenji]

Geez......maybe I should move to Ohio!

Restaurants in town want to buy a lot of the desserts they make, but they don't have a "wholesale" license yet. Doesn't mean they don't sell it to the restaurants....they just do that on the sly too.

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Here they call it "out the back door sales" - - -

However, if you get caught you lose your license and can't reapply for 5 years!!

As I said the book of regulations that governs just the small niche that relates to my situation is the size of a small city phone book. Well, actually Lancaster has 130,000 residents and Palmdale has nearly as many and we have a combined phone book with yellow pages and the book of "regs" is nearly as thick, and is in very, very small print.

Then there is the State board of equalization (sales tax) with resale permit, Franchise Tax board, state income tax, County of L.A. and thank God I am not in the City of L.A. - one of the reasons I moved up here was to get out of the city because their business license is even tougher and even though I work alone, for their purposes I have to consider myself an employee and pay a tax for my employment. Stupid, stupid rules.

I have a mental picture of the city council sitting around and saying "what can we do today to make doing business for the small businessperson even more frustrating?"

[Wendy DeBord]

Typically in the situation you described, the grocery will bring in goods from their other stores to sell. I think it would be pretty unusual that they'd buy in from someone else.

If your legal and looking to increase your sales I'd suggest looking for opportunities that were just the opposite of what you mentioned. I'd look for upscale (they have more money to spend) caterers, restaurants, coffee shops, etc... . Look to do custom work/quality upscale items that wholesalers don't do........thats your niche.

[BROWNSUGA]

I agree with Sinclair. I would try small specialty shops where you products would not only fit in well, but also, make a profit for you and the storeowner.

There is a small coffee shop in my area that just opened up. I guess they have all kinds of specialty hot drinks. I visited it to see what it was like. These baked goods were horrible. To me, it just didnt go with the "look and feel" of the place. I think they would be adding so much more to their environment if they had better baked goods (i.e. muffins, gourmet cookies, bar cookies, scones, etc._ to go with the coffee they are selling. Then I thought, their focus is probably on the drinks itself. They may not be bakers and the baked goods may not be priority to them. Oh well.

I met a woman on another board that does specialty cakes. She said most of her business comes from other businesses.

[celenes]

Yes I do agree the specialty shops are probably a better shot.

I had two reasons for targeting the local grocery store. One it was a way to build a relationship with them until the development of other retail spots which will hopefully be available right off the main strip mall area sometime in the Spring. Second was since I live next door to City Council President and I know he wants the residents of the community who have business ventures to be the suppliers for our area I thought this was another good way to build my creditability.