While the restaurant industry as a whole struggles to reach projected growth rates that remain stuck in the single digits, one segment continues to rise above them all: bakery cafés. Indeed, operators in this segment continue to enjoy the sweet taste of success thanks to diverse menu offerings that feed consumers' desire for perceived better-for-you foods and convenience.
Sales in the bakery café segment totaled $6.658 billion in 2012, up 11 percent from $5.998 billion in 2011, according to Chicago research firm Technomic. Unit count in 2012 was 4,896, up from 3,602 in 2011. Topping the segment's list of standout performers is Panera Bread with sales of more than $3.7 billion at its 1,643 units last year.
Current menu trends among bakery cafés focus on new protein-rich items, gluten-free offerings and artisanal breads. Many chains now offer coffee and smoothies, hoping to capture a greater share of the breakfast and snack business.
With the segment becoming more competitive, diversification remains critical for successful operators. "We are working on a café concept in Texas that will be a coffee shop, sandwich café, bakery and ice cream parlor in one," says Art Meyer, an Austin, Texas-based bakery consultant.
More concepts are moving toward using frozen par-baked or fully baked dough, which helps operators reduce labor and equipment costs. Rather than large hearth deck ovens, necessary to bake raw dough, these businesses can utilize convection ovens for bake-off items. "We're putting in less 100-pound horizontal mixers and including a lot more walk-in freezer space and deck ovens to accommodate this change," Meyer says. "There is great bake-off product available, and this allows smaller operators with less experienced staff to get into the business."
In terms of bakery items, bagels remain strong performers, with Einstein Bagels second on the list of bakery café chains making $20 million or more each year. In 2012, the chain's 685 outlets had more than $473 million in sales. Au Bon Pain, third on the list with more than $338 million in sales and 197 units in 2012, recently branched out to offer local artisan breads, which are more rustic than the chain's traditional European baguette.
Incorporating locally grown and raised ingredients to support area farmers has also become more widespread in today's bakery cafés. "These outlets are becoming more [focused on] casual dining rather than baking," Meyer says. "The chains were initially based in breakfast, then went into lunch and now offer bigger meals."
Looking ahead, with big players like Panera Bread leading the pack, independents and mom-and-pop operations will need to further diversify to carve out a niche in this increasingly competitive segment.