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Grandma's Bakery
New Trend Toward Old Traditions
Giving bread away may not sound like the best way for a baker to make money, but that's exactly what John Lupo did while he developed his signature baguettes. More concerned with making them right than making a profit, he spent those first months fine-tuning his formula. He was just getting into artisan breads and wanted to make sure he could consistently achieve his quality standards before adding the new bread to his product line.
Quality has always been important to the owner of Grandma's Bakery, a $2.5 million operation in White Bear Lake, Minnesota. Now it's paramount. With new retail bakeries popping up all around him and a Sam's Club moving in down the street, Lupo sees a heightened focus on quality as his best bet for combating increased local competition. In an effort to reposition Grandma's Bakery, Lupo and his staff have begun to rethink everything they do from a quality standpoint.
"Over the last year or so, we've decided to upscale our image," Lupo said. "We feel we have to differentiate ourselves against the competition. We needed something to set us apart."
As more retail and instore bakeries turn to frozen and parbaked products (Sam's Club plans to eliminate all its mixers over the next few years), Lupo believes retail bakers who can carve a market niche with great-tasting signature items will find themselves capturing both loyal customers and profitable margins. He's certain higher quality is what customers really want.
"I've never had anyone ask me for a lower quality product at a cheaper price," Lupo said. "People always want something that tastes better."
Lupo sees a renaissance developing in the retail baking industry with a new group of people coming into the business who place a higher emphasis on quality ingredients and traditional techniques. Not only finding greater personal joy in their work, these bakers are realizing genuine financial rewards too. "Make it taste better, and people will pay for it," Lupo said.
Building a business from scratch
John Lupo and his employee regularly taste the shop's baked goods to see how they measure up to the quality standards Grandma's Bakery sets for itself. Below, Lupo and Steve Krietz sample baguettes.
Repositioning oneself can be a challenge, but then, Lupo is no stranger to challenge. He entered the business in 1978, investing in a Mister Donut franchise with his parents. With big dreams but little experience, Lupo ran the day-to-day business, while his mother kept books and his father helped on Saturdays.
They operated from a shop on a quiet street called Prosperity Avenue. But early on, the business failed to live up to the address's implied promise. Lupo soon realized the location didn't generate enough traffic for him to survive as a specialty baker, so he expanded his product offering into a full-line bakery.
Lupo loved the baking business, though he found it "more grueling and physically demanding than I ever anticipated." He struggled through several lean years, trying to generate the sales volume he needed to keep the doors open. Then he sold his first wholesale order.
"It was a small order, but I saw a big opportunity," Lupo said. "It proved to be the opportunity that would help Grandma's Bakery turn the corner to profitability. Today, the 53-employee business outputs three times the volume in one day what the original donut shop sold in one week, and wholesale customers account for about 809 percent of it. In 1989 Lupo became one of the first to pass the RBA's master Baker Certification program, a proud accomplishment for a self-taught baker. He served two years as president of the Minnesota Bakers Association. Grandma's Bakery moved to its 6000-square-foot White Bear Lake location in 1992, and will add another 4000 square feet to the facility this year.
Adapting to change
How has Lupo succeeded through the years? By constantly adapting his business in response to changing market forces. Today, he believes those forces include tighter competition and a growing demand for better quality. He also believes the current climate offers excellent opportunities for scratch bakers who can effectively position themselves to operate in today's conditions.
Lupo saw he had one of two options. "I could compete on price or compete on quality," he said. Convinced that playing the price game would take him "no where fast," he's taking the route many scratch bakers see as the way to rise above the crowd -- leveraging his baking skill to deliver a level of quality his competitors can't match. "When it comes to quality, we have an unfair advantage," he said.
On a quest for a better baguette
An artisan bread class at the National Baking Center last year opened Lupo's eyes to the importance of high quality -- at the same time affirming his conviction that an upscale position was the right direction for his bakery.
The class stressed high-quality European methods -- a focus that intrigued Lupo, sparking his interest to experiment with artisan breads. Predominantly a sweet goods shop, Grandma's never did a big bread business -- largely because Lupo didn't see how he could compete with the 39-cent grocery store loaf. But today's artisan breads truly rely on good baking skill, and Lupo now sees opportunity to make money in high-quality breads. "People love good bread," Lupo said. He predicts the artisan movement will continue to grow as Americans tire of bland, mass-produced bread.
Lupo began working on his artisan baguette formula last August. He knew if he could master the baguette -- the most unforgiving of bread forms -- other artisan breads he tackled would be a piece of cake by comparison. As part of his test-market strategy, he gave customers sample baguettes while he worked on perfecting the formula. In addition to baguettes, he also offers a signature Rustic Country Bread, both made from low-protein Progressive Baker Bread Flour®. Right now, he's concentrating on honing his bread formulas. He'll be happy if he succeeds in developing four or five very high-quality artisan breads by the end of the year.
Quality bread techniques make other products better too
In addition to good bread baking practices, the National Baking Center class taught Lupo to look at his entire business differently. European baking methods made Lupo want to take a closer look at his own baking practices. "It dawned on us that maybe the techniques we always use aren't necessarily the best ones -- that maybe we should rethink some of them."
How has he put that knowledge into action? "We've always had good quality, but the class motivated us to zero in on it," Lupo said. "Now we question everything we do, and look at every product to see if there's a way to make it better." Lupo recently invested in a new mixer and oven to get better results with his breads.
Lupo also found many of the principles he learned about bread would help raise the quality of his other baked goods.
"If fermentation builds complex flavor in breads, we thought it might help our donuts, too," he said. Now he combines low-protein Progressive Baker® Bread Flour with his donut bases to duplicate artisan flavor and appearance in those items. And he's experimenting with the flour in other pastry and cookie formulas.
Lupo is now tasting his way through his entire product line, training his palate to detect the flavor and nuance that mark exceptional quality. "I used to eat my baked goods," he said. "Now I've learned to really taste them."
He's teaching employees to sharpen their taste buds too. On a given day he might gather everyone from the general manager to the dishwasher into the back room to rate four Bismarck formulas he's testing -- each made from a different flour. Employees inspect, smell, taste and ultimately judge each one, casting votes on what they like or don't like. The next day, they might scrutinize several Danish rolls the same way.
Involving the whole staff this way makes all employees better aware of quality, Lupo said. And that's not only making Grandma's a better bakery -- it's also making it a fun place to work. "Employees are really getting into it, because every day we're figuring out new things together -- finding new ways to make our products look and taste better. That's what's fun."
Small changes, big improvements
Sometimes seemingly minor changes in procedure made a huge impact on quality. For example, they used to dump donut dough onto a table to ferment. Then one day someone suggested they try leaving it in the bowl and discovered it made an amazing difference. With less surface exposed to the air during proofing, the dough absorbed much less shortening in the fryer, resulting in a lighter, less greasy donut.
Another simple procedural change helped the bakery correct a nagging problem ruining the appearance of turnovers. They used to pinch the edges of the turnover shut with their fingertips, not realizing excessive handling destroyed the delicate pastry's ability to puff up properly. By laying a finger gently across the edge of the pastry without pressing into it, they now seal the dough without damaging it. The turnovers rise as they're supposed to, and best of all, they finally look as great as they taste.
For the most part, Lupo says, "the changes we're making haven't made the work any harder -- or any easier. It's just a different way of doing things." For this quality-minded baker, it's the way to a bright future