Enticing the senses: if operated correctly, an in-store bakery can greatly enhance a supermarket's appeal to its shoppers. Most importantly, the store must be careful to offer quality products that taste as good as they look and smell.

In-store bakeries contribute significantly to a company's fresh image, and the more successful grocery store chains are taking advantage of this fact. Bakery products are still indulgence purchases and to increase the probability of these sales, bakeries must appeal to the customer's sense of sight, smell and taste. Customers are more likely to make the purchase from the bakery after seeing and smelling the products being produced and displayed.

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Most importantly, the products must taste good, and if they exceed the eyes' and nose's expectations, the store can expect a loyal repeat customer. Challenging this formula for success is a group of constantly changing outside influences, which force the stores to continually evolve and develop new products.

Customers demand quality and the bakeries must deliver in an increasingly competitive environment. With the rising costs of staple ingredients like flour and sugar factored in with higher energy costs, some in-store bakeries are looking at increasing thaw-and-sell items and wholesale products (like Krispy Kreme donuts) to combat shrinking profit margins while maintaining a high level of quality. Done correctly, this diversification of product production can meet the expectations of both the bakery and the customer. At the other end of the spectrum are the bakeries that look to offer more upscale products such as artisan whole grain breads and elegant desserts reaching out to the customer who makes a buying decision on taste alone.

Altering the bakeries' products and offerings are often a result of changing dietary trends and fads. While the "lowcarb" fad may have come and gone, new-buzzwords like "trans-fat" and "whole grain" have filled its void. With more consumers watching their trans-fatty acid intake, bakers and product suppliers alike must offer products that eliminate trans-fat. The introduction and promotion of whole grain products, such as breads, bagels, muffins and even cookies, can also drive bakery sales. But as new-fads and trends emerge and bakers formulate new products to accommodate, they must create a product that maintains its taste and high quality; otherwise there will be no repeat business.

Also noticing these trends are wholesale baked good manufacturers like Sara Lee. These manufacturers are following the same trends that many instore bakeries are following, such as adding healthier whole grain products and charging higher prices for these goods. In-store bakeries are also feeling the pinch of increased competition from new market entrants like super-centers and convenience stores. Whereupon the bakery at the grocery store was seen as the convenient option, these new-alternatives offer additional choices for today's customer.

Susan Nicolais, CAE, is executive vice president of the Retail Bakers of America.

Founded in 1918, the Retail Bakers of America (RBA) is a trade association of approximately 1,500 retail bakeries, allied suppliers and other industry partners that offers its members knowledge and resources to enhance business operations through learning opportunities, shared best practices, networking and industry communication. For more information on RBA visit www.rbanet.com.