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Bakery-Cafés Round Out Quick-Serve Portfolios
Segment remains underdeveloped opportunity for foodservice.
Selection of baked goods at a so-called bakery-cafe restaurant.

John Cutter is moving to Denver, Colorado, as soon as he sells his house in Western Massachusetts, but the 63-year-old former CEO of Friendly’s says relocating has nothing to do with early retirement.

Cutter, along with his sons, Jamey and Stephan, formed a family business last October with the purchase of two Mile High City-based Corner Bakery-cafés, a franchise they plan on expanding to meet what they say is an increasing, yet overlooked consumer demand for bistro fare.

“I think it’s providing exactly what the consumers want,” says Cutter. “It has high-quality food, quick service, and the ambience is very warm and friendly. Plus, the check per person is only 7 to $8.”

Cutter’s isn’t the only quick-serve management company moving forward with plans for Corner Bakery expansion, according to P.J. Evans, vice president of franchise development for the Dallas, Texas-based chain.

To wit: Pennsylvania’s Rose Group, which manages 54 Applebee’s restaurants throughout Philadelphia, New Jersey and Maryland, plans to develop 25 Corner Bakery-cafés. Lakewood, California–based WKS Restaurant Corp. operates more than 50 El Pollo Locos in Southern California and has plans to expand Corner Bakery’s reach in Phoenix, Arizona, with 15 stores. And those are just two examples for one brand.

Survey Says…

The aggressive expansion mode at Corner Bakery supports the findings of a recent consumer survey conducted by Technomic, a Chicago-based food industry research and consulting firm.

According to Technomic’s findings, 57 percent of roughly 3,500 respondents said they had never been to a bakery-café. The main reason? No such concepts in their area (48 percent). An additional 28 percent of non-customers said they don’t visit bakery-cafés because they are not familiar with what food items the concept offers.

“We believe this spells significant, untapped opportunity for the already-successful bakery-café segment,” Darren Tristano, executive vice president of Technomic Information Services, said in a prepared statement. “With less than a quarter of non-users citing ‘negative’ factors, such as price or preference, it appears that bakery-café operators’ greatest challenge is simply providing additional access and awareness.”

Both Cutter and Evans concur, saying the consumer is driving the bakery-café category while many restaurant management groups are looking to add these bistro concepts in an effort to balance their portfolios.

“Look at the Mexican chains. You have Chipotle, Baja Fresh and others. Plus, you have the burger chains,” says Cutter, pointing out the inherent competitiveness of other quick-serve and fast-casual segments. “There’s a lot of opportunity to step up and fill that white space with the bakery-café concept.”

“[Operators] are trying to pick up alternative brands to augment existing brands because the consumer is changing,” Corner Bakery’s Evans explains. “They are trying to follow and/or get in front of the customer as best they can.”

Among the consumers who have been to a bakery-café restaurant, 54 percent visited Panera on their most recent occasion, according to Technomic’s survey. The remaining 46 percent had been to a combination of smaller national or regional bakery-café chains. In consumers’ minds, Panera Bread has defined the bakery-café segment and set the standard for what other bakery-café concepts should offer in terms of food, atmosphere, and service.

Officials at St. Louis, Missouri-based Panera declined to comment on the survey findings, but that particular finding comes as no surprise to Corner Bakery’s Evans or Ed Frechette, senior vice president of marketing for Au Bon Pain in Boston.

Women and younger consumers use bakery-cafés not only as a place to eat but also as a place to socialize with friends.

“For our brand, it’s not a surprise at all because Au Bon Pain tends to be an urban brand or in airports,” Frechette says. “There’s a phrase from new customers we repeat a lot. It’s ‘I had no idea.’ We know our less frequent users think of us as a bakery, while our more frequent users know us more for soups and salads. Many were never aware of the breadth of offerings and the quality of the food.”

Technomic’s research also revealed differences in expectations by varying demographic groups. Among the more interesting findings:

  • Women and younger consumers use bakery-cafés not only as a place to eat but also as a place to socialize with friends. Due to the importance they place on the social aspects of bakery-café concepts, these groups find amenities like soft music, fireplaces, and comfortable armchairs more appealing than other demographic groups;
  • Males and consumers with an annual household income of $100,000 or more find Wi-Fi access to be very appealing. It is likely that these groups are using bakery-cafés as an “office away from the office.”
  • Asian and Hispanic consumers generally place greater emphasis on family dining, which might be one reason why communal tables at bakery-cafés were more appealing to these ethnic groups;
  • Communal tables are more appealing to consumers with an income of $25,000 or less per year which might suggest that some may be using bakery-cafés for special occasions to dine with a group of friends or family members at a lower price point than they would have at full-service restaurants.

Technomic also found that bakery-cafés are gaining in popularity as a breakfast destination, with nearly 18 percent of survey respondents indicating that they most recently visited a bakery-café for breakfast. Portable breakfast sandwiches, baked goods, and new smoothie options are among the breakfast menu offerings most appealing to consumers.

While officials at Corner Bakery and Au Bon Pain say sales have increased across all day parts, Frechette says a bakery-café is somewhat of a misnomer, with the bakery part becoming just one aspect in a slew of offerings.

“We are seeing tremendous growth in breakfast, and we are now offering sides [such as] asparagus and almonds, Brie with grapes and crackers, and chick pea salad that allow people to add onto meals,” he says. “There is a big upside to this trend. Whether you call it a bakery-café or restaurant, that’s where consumers are headed.”