Price Changes

I have recently become aware that another baker at the FM is outselling me by over two to one. Now of course this might simply be because his breads are far better, and that is not really for me to say, but it also could be because although my bread costs about the same, gram for gram, as supermarket ‘artisan’ breads, his is about 40% cheaper AND he is using the same organic flours from Milanaise as I am (though many of my fresh-ground flours are from Speerville-supplied kernels from Maritime-based farmers).

Given it is November, it is easy for me to guestimate the income from now until year’s end (about 6-7 weeks worth) and conclude that without any question this year I was not able to make a clear profit net of basic, necessary living expenses, which in my case are quite modest given there are no mortgage or new car payments in the mix. Health care in the form of (often ineffective but nonetheless expensive) dentistry is the biggest challenge, and I have found this year that I cannot afford what I need and so am just letting teeth break and not fixing them. But even with this rather strange way of saving (!), am still not breaking even. This is the sort of conclusion one doesn’t want to make, but the numbers don’t lie. And since I have virtually no savings after thirteen years on the island, and the bakery is the sole source of income at this point, the current situation is simply untenable. Something has to change.

Clearly am faced with a challenge. Presuming I wish to continue the bakery operation – which I do – I must find a way to boost net income so that it is sustainable.

I have decided that the first thing to consider are my ‘price points’, so am lowering the prices on nearly all breads to see if, over a few months, that will boost sales volumes. Have calculated that if volumes go up by about 20% then that will more than compensate for the lower prices.

Of course the risk with this approach is that it could possibly hasten having to close down since if the volumes don’t pick up, all it will effect is a lowering of income. (But if risk didn’t involve taking a chance that things could go worse, not better, it wouldn’t be called ‘risk’, would it?!)

Have been selling about 80-90 loaves per Market Day and really should be selling about 100-110 (at current prices) to be viable. So hopefully lowering the prices will get me to about 120, which should be fine. Of course this will take a few months to evaluate given that Jan-Feb-March is always very slow for seasonal reasons.

Secondly, must consider additional market venues, either other Farmers’ Markets, or finding a retail outlet, a corner store, a steady restaurant contract or whatever. The challenge here is to find something that want sufficient loaves to justify a second Bake Day during a week, since I can only add a few loaves to current FM Bakes, especially since in theory they should at some point come in at around 120. So an order for 20 loaves on Wednesday is not good enough, it has to be at least 40 loaves to justify an additional bake, which is a 2-day process. Ever since opening have been waiting for / wanting more sales in the immediate local area (Marion Bridge, Gabarus, Albert Bridge) but almost none have been forthcoming. Perhaps I need to approach Church’s with more determination, perhaps set up a road side booth during the summer months (personally do not like that idea), perhaps an email-based order and delivery service once a week. Perhaps, perhaps, perhaps.

Lastly, there is an old bakery in Whitney Pier that I could take over rent free for 18 months, and which has one of the largest brick ovens in North America, plus a rotating convection oven in back (both propane fired). But this is a relatively large undertaking and I cannot do this alone due to lack of capital. If there is anyone out there who reads this at some point who is interested in owning and managing an island-based production facility, please let me know. Myself am only interested in working the brick oven and producing line of quality, organically fermented breads. I believe this could be done with 1-3 employees as a sub-department in a larger bakery operation and we could produce the best commercial bread in the Maritimes which could be sold in several FM’s, health food stores, and purchased regularly by upscale restaurants as well. If nothing else, it would scare the supermarkets into making better bread, although I must say that the artisan breads are pretty good now if you are someone who likes (laboratory / factory grown commercial yeast risen) breads; I don’t, and there are no good sourdough loaves available in such venues, and I believe if more people had access to them, they would ‘take’.

Jamie of Kingsville Farms (the rival baker!), a very friendly fellow, floated the idea of structuring the large bakery as a cooperative. Perhaps this is worth exploring too.

Meanwhile, though, must still confront the harsh reality of the current situation which is that they have not ‘taken’. Another baker has demonstrated with his skill and hard work that much higher volume sales are possible in the Sydney FM, so clearly my product line (and/or its prices as per above) is not appealing. Which means also that quite possibly having access to a larger brick oven will make little difference. In order to better evaluate this, I will therefore lower my prices to being closer to what they would be were I manufacturing in larger volumes.

Time will tell!
I make this post partly to keep those few who follow this blog informed, but mainly as some sort of expression by a small, artisan bakery operator of the sort of challenges we face. Personally, I have no doubt AT ALL that I will find a way forward with this; that the challenge as it becomes more clear and dire will oblige a solution to be found. As long as the bread is good – and I believe it is – and the prices reasonable – which I believe they are based on their cost and labour involved, it will work. But that is easier said than effected, that is all, and right now am faced with the challenge of finding out how to raise volumes somehow.

Oh yes, am also building up a much nicer looking booth. More on that later as hopefully (after delaying it for months during the busy summer months), it gets put together in the next couple of weeks. Maybe that will provide the sales boost I need and this whole ‘crisis’ will be no more than a blip.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s