Participants:

5336: Frank Langford, director fresh foods & catering, Buy For Less, Oklahoma City
5338: Catherine Reinhart, owner, Sweet Life Patisserie, Eugene, Ore.
5339: Flora Lau, V.P. bakery product development/strategic alliances, Sara Lee Corp., Downers Grove, Ill.
5341: David Okapal, Temple University pastry chef, Sodexo, Philadelphia
5344: Abe Faber, co-owner, Clear Flour Bakery, Brookline, Mass.
5346: Christy Timon, co-owner, Clear Flour Bakery
5348: Nicole Coady, executive pastry chef, Finale Desserterie, Boston
5424: Scott Florence, president & C.E.O., Hill & Valley Inc., Rock Island, Ill.

On behalf of Bay State Milling Co., Quincy, Mass., Baking Management and Modern Baking magazines brought together several industry leaders from key segments of the baking industry to discuss the current state of business and how bakeries and their customers can work together toward collaborative innovation.

Communication and education are key elements of the relationship bakers have both with their suppliers and their customers, particularly when it comes to healthful eating. Bakers need to feel free to have an open dialogue with their suppliers, no matter if they’re small or large.

One common thread voiced throughout the discussion, from large consumer product goods manufacturers, such as Sara Lee Corp., to smaller retail bakeries, was how bakers have been affected by the current economic situation. Many bakers have reacted to the economy through margin enhancement, minimizing waste and developing baked products with a “retro” feel.

Baking Management: What drives innovation in your organization?

Nicole Coady: The economy drove it for us. It’s made us focus more on our concept–who we are and what we’re representing to the public. We’re trying to be friendly and more approachable. There’s pudding on the menu. We haven’t had pudding before, and there’s more whipped cream, things like that.

BM:  How has the economy affected your business in the way you approach innovation?

Flora Lau:  We have a very large audience and being a publicly held company listed on Wall Street, what we do gets a lot of attention. Within Sara Lee, we have meat, we have bakery and then we have coffee and tea. So, the reason we are very focused on innovation within the company is because we want to grow our top line. With this economy, it is tough. We have to take care of our bottom line, so we have a large number of projects focusing on margin enhancement.

For us, it’s not only developing new products. We also are very focused on developing products that have an insulating competitive advantage so we can be ahead of our market. Technology becomes a key driver for us. We leverage technology from ingredient, processing and packaging standpoints to create this competitive insulation. That’s how we look at innovation.                         

However, we also believe that when the economy grows again, if we don’t have a pipeline of products in our system ready to launch, we will be left behind. We are really focusing on having a pipeline of innovative products–whether it’s bread, bakery, buns, coffee, tea or meat.

BM:  You mentioned that you focus on margin enhancement. Can you explain how you do that?

Lau: From margin enhancement, we have a margin cost improvement. We always look at opportunities to improve operations. Is there opportunity to consolidate so that we can volume purchase without sacrificing the quality of the product? When we talk about margin enhancement, in our view, it’s different than cost savings. With cost savings, you have a connotation that you’re going to cheapen the product, but when we look at improving our margins, we look at every aspect of our business to improve our cost. And often times, we are quite successful in bringing the cost down, and at the same time, improving the quality of products. So it’s not one or the other; most of the time they go hand-in-hand.

BM: How has the economy affected innovation in other businesses?

Fred Langford: Our name is Buy for Less, and now we’re really living up to our name. I mean, we drive a bargain, keep our prices low and that’s really starting to pay off for us.

Scott Florence: Our customers are looking to reduce SKUs, and don’t want to look at new items too often, especially since ours is a niche product. So, I’m having a tougher time finding ways that my customers are going to help me drive innovation. In the past, they’ve been much more aggressive. They’d say, “What else do you have? Can I have guava pie?”